ANNUAL REPORT 2012 - listed companytathong.listedcompany.com/misc/ar2012.pdfANNUAL REPORT 2012 01. ... of predictable, recurring income. ... equipment maintenance and overhaul, steel

ANNUAL REPORT 2012

CONTENTSCORPORATE PROFILE 1 | OUR GLOBAL PRESENCE 8 | JOINT STATEMENT BY CHAIRMAN AND MANAGING DIRECTOR 10 | YEAR IN REVIEW 14 | FINANCIAL HIGHLIGHTS 18 | KEY MILESTONES 22 | BOARD OF DIRECTORS 24 | KEY MANAGEMENT 28 | INVESTOR RELATIONS 30 | GROUP STRUCTURE 31 | CORPORATE INFORMATION 32 | FINANCIAL CONTENTS 33

NO. 1in terms of fl eet size of

crawler cranes

TAT HONG

HOLDINGS LTD

(“TAT HONG”) IS ONE

OF THE WORLD’S

LARGEST CRANE

COMPANIES1:

In the Asia-Pacific region, we are the largest crane company1 with a fleet

size of almost 1,400 crawler, mobile and tower cranes ranging from under 50

tonnes to 1,600 tonnes.

We were established in Singapore in the 1970s as a supplier of cranes and heavy

equipment. In June 2000, we were listed on the Singapore Stock Exchange –

a historical milestone in our corporate history. Within three decades, we have

grown our presence to 26 cities across Australia, China and Asia, with 39 offices

in Australia alone.

Through our Australian subsidiary, Tutt Bryant Group Limited, we have a leading and

active position in three key business areas in the Australian market:

1. Crane hire and heavy haulage;

2. Equipment sale and distribution; and

3. General plant and equipment hire.

In China, Tat Hong has aggressively expanded its presence through various strategic

joint ventures with well-established Chinese companies. We will continue to lead as

the largest tower crane rental group in China2 through M&As and organic growth.

Asia remains as our second growth driver after the Australian market. In this region,

we have successfully branded ourselves as the leading name in the crane rental,

heavy lift and heavy haulage and equipment sales business. We aim to extend

our presence in the region’s offshore and marine industry through continuous

participation in notable infrastructural and resources projects.

Led by a visionary management team with rich experience in the cranes and heavy

equipment industry, Tat Hong has carved a niche for itself in the Asia-Pacific region

particularly in ASEAN countries, Australia and China.

1 Source: International Cranes, IC50 Ranking, June 20112 Source: International Cranes, IC50 Towers Ranking, June 2011

CORPORATE PROFILE

NO. 8in terms of aggregate tonne-metres

TAT HONG HOLDINGS LTD ANNUAL REPORT 2012 01

THERE ARE NO GREAT LIMITS TO GROWTH BECAUSE THERE ARE NO LIMITS OF HUMAN INTELLIGENCE, IMAGINATION, AND WONDER. RONALD REAGAN

GROWING OUR CAPABILITIES

A WISE MAN WILL MAKE MORE OPPORTUNITIES THAN HE FINDS. FRANCIS BACON

SEIZING NEW OPPORTUNITIES

SUCCESS IS NOT A MATTER OF DESIRE, BUT THE PRODUCT OF HARD WORK. JACK BARRINGER

DELIVERING GREATER RESULTS

USA

OUR GLOBAL PRESENCE

Fujian

Guizhou

Chongqing Sichuan

Gansu

Qinghai

Yunnan

Jiangxi Hunan

Hubei

Shaanxi

Shanghai

Zhejiang

Jiangsu

Beijing

Liaoning

Tianjin Hebei

Shandong

Guangdong Guangxi

Inner Mongolia

Ningxia Shanxi

CHINA

Xinjiang

Heilongjiang

Jilin

Henan

Anhui Tibet

Hainan

TAT HONG HOLDINGS LTD ANNUAL REPORT 201208

• Kuala Lumpur

• Jakarta

Bangkok •

AUSTRALIA

EUROPE

PAKISTAN

CHINA

RUSSIA

JAPAN

PHILIPPINES

• PAPUA NEW GUINEA

SOUTH AFRICA

MAURITIUS

• Ho Chi Minh

Beijing •

Guangzhou •

Shanghai •

SINGAPORE •

HONG KONG • TAIWAN

VIETNAMHanoi •

INDONESIA

GUAM

SEYCHELLES

MALDIVES

SRI LANKA

THAILAND

MALAYSIA

INDIA

SOUTH KOREA

BANGLADESH MYANMAR

MIDDLE EAST

• KwinanaPerth •• Redcliffe

Adelaide •Portland •

Karratha •• Port Hedland

• Darwin

• Cairns

• Townsville• Mackay

Dysart • • Gladstone

• Brisbane• Coffs Harbour • Muswellbrook• NewcastleSingleton •

• SydneyWollongong •• Goulburn

• Melbourne• Hallam

Doveton•

•Moolap •

Laverton

TAT HONG’S BUSINESS PRESENCETAT HONG’S BUSINESS ACTIVITIESTAT HONG’S OFFICES


JOINT STATEMENT BY CHAIRMAN AND MANAGING DIRECTOR

DEAR SHAREHOLDERS,

A year ago, in our joint statement on the performance

for the previous financial year FY2011, we had

shared that although we had a profitable FY2011,

the anticipated year-on-year growth in profitability

for that year was somewhat affected and delayed

by the natural disasters in Queensland, Australia

at the end of 2010 and also the tsunami that hit

Fukushima, Japan at the end of that financial

year. Notwithstanding these disruptions to the

physical operating environment and the further

natural disasters – another flood in New South

Wales, Australia and in Thailand in FY2012, the

Board of Directors of your Company is pleased

that the anticipated recovery back to growth in

profitability has materialised and has delivered a

commendable set of financial results for FY2012.

Tan Chok KianNon-Executive Chairman

Ng San Tiong RolandManaging Director

OUR BUSINESS IS MOVING IN THE RIGHT DIRECTION AND WE INTEND TO RIDE ON THE GROWTH MOMENTUM.


REVENUE GROWTH TO

S$225.0MILLION

CRANE RENTAL

OUR PERFORMANCE

Our focus on improving our fundamentals and business-building

investments in the recent years has generated strong momentum

across our businesses in FY2012 where we witnessed consistent

growth in revenue and operating profit over the last four quarters.

The strength of our FY2012 financial results demonstrates this

momentum:-

• Group revenue grew 23% to S$719.8 million compared to S$584.2

million a year ago.

• Net profit attributable to shareholders surged 63% to S$42.3

million compared to S$26.0 million in FY2011.

• Excluding one-off items, net profit attributable to shareholders

grew 33% to S$51.1 million, up from S$38.3 million a year ago.

• FY2012 EPS of 7.42 Singapore cents was 62.7% higher than

4.56 Singapore cents in FY2011.

• Return on equity in FY2012 was 7.6%, compared to 5.0% the

previous year.

• Cash position remained healthy at S$76.8 million and shareholders’

equity continued to grow, to S$556.4 million. Tat Hong witnessed

broad-based growth across all our business divisions – Distribution,

Crane Rental, General Equipment Rental and Tower Crane

Rental – in FY2012, registering both topline and bottomline growth.

Distribution was the largest contributor to revenue at S$339.2 million,

an increase of 25% from S$272.4 million previously. Growth was largely

driven by strong demand from infrastructural activities in Australia. Sales

of excavators in Indonesia also saw a significant growth.

Revenue contribution from Crane Rental grew 22% to S$225.0 million,

from S$184.9 million in FY2011. Revenue growth for this segment

was largely attributable to the robust rental markets in countries, such

as Singapore, Malaysia, Thailand, Hong Kong, Indonesia and Papua

New Guinea.

The General Equipment Rental division witnessed the largest surge

in revenue with a 39% increase to S$96.9 million, compared to S$69.7

million in the previous year. This resulted from the continued strong

demand in Australia from their rebuilding programmes following the

natural disasters that occurred in 2011.

TAT HONG HOLDINGS LTD ANNUAL REPORT 2012 11TAT HONG HOLDINGS LTD ANNUAL REPORT 2012 11

The Group’s Tower Crane Rental turned in a 3% increase

in revenue to S$58.7 million, due mainly to an increase in

rental contracts in second-tier cities in China and improved

utilisation rates achieved by Jiangsu ZhengHe Tat Hong

Equipment Rental Co., Ltd (“JZHTH”).

This growth in revenue was amidst a management and

operating environment of having to continue to manage the

China partners in 55% owned JZHTH and in 52.3% owned

Si Chuan Tat Hong Yuan Zheng Machinery Construction

Co., Ltd (“SCTH”). The Group resolved the situation in

4QFY2012 when, (a) it bought out the Chinese party’s

stake in JZHTH, and (b) SCTH disposed its crane assets

through a court-sanctioned public auction that resulted in

SCTH incurring a one-off accounting loss of S$14.8 million

at the Profit Before Tax level although those same operating

crane assets continue post-auction to belong to the Group

under a different China subsidiary.

The management has learnt a valuable lesson in doing

business in China.

Notwithstanding the one-off accounting loss incurred by

SCTH, the Group achieved a Net profit attributable to

shareholders of S$42.3 million compared to S$26.0 million

in the previous financial year.

Overall, we are particularly pleased with the robust revenue

and earnings growth, especially in the second half of FY2012.

The further details of the year’s financial performance and

corporate developments are found in the accompanying

report on the Year in Review.

With all four cylinders firing, we have reason to believe

that we are at the cusp of further growth as we see a

strong pipeline of projects across the Asia-Pacific region.

OUR YEARS OF GREAT OPPORTUNITIES

We believe that this will be a decade of growth for the

Asian economies, and Tat Hong is in the right markets,

at the right time. Over the last few quarters, the demand

for our services across Asia-Pacific countries has been

unprecedented.

In the course of FY2012, we saw the commencement of

large scale infrastructural projects across the Asia-Pacific

region. Australia, for instance, is seeing a barrage of projects

starting up and gathering momentum, most of which will

span the next few years. These include ongoing post-disaster

rebuilding programmes and growth opportunities from the

resource and infrastructural sectors in Western Australia

and Queensland. Additionally, we are also anticipating

more projects from the Northern Territory in the near future.

The Group is also seeing significant demand and excellent

opportunities for major infrastructure and construction

projects presented by Malaysia, Thailand, Indonesia

and Singapore, as these countries undertake transport

and infrastructure development to further build on their

mass rail transportation systems. In Hong Kong, we see

the commencement of projects such as the Hong Kong

Boundary Crossing Facilities, Central – Wan Chai Bypass

and the Guangzhou – Shenzhen – Hong Kong Rail Link,

as well as infrastructural works at Kai Tak Airport. In Papua

New Guinea, through Tat Hong (PNG) Limited, our 50%

joint venture which was formed in early FY2012, we see

firm demand from the many on-going and new oil and gas,

mining and infrastructure projects.

Our strategy in focusing on the second-tier cities in China

– Shenyang, Tianjin, Wuhan, Chongqing, Sichuan and

Guandong – has also paid off as we continue to be involved

in ongoing and new large building and infrastructure projects.

The revival of approval for new nuclear plants in China is

also expected to bode well for the Group.

OUR FUTURE

Looking ahead, we are heartened to say the pipeline of

infrastructure, oil and gas, nuclear and renewable energy,

as well as resource projects continue to be strong. These

are projects across the Asia-Pacific region which would

typically span a number of years, with the added benefit

of predictable, recurring income. Such a favourable

business environment presents us with good prospects

to further grow our business by increasing our fleet size

for our crane rental business.

We expect to maintain our current level of capital

investment to support fleet expansion, and ensure optimal

fleet utilisation to support our growth and achieve better

productivity. This intended fleet expansion is reminiscent

of the time when we capitalised on opportunities after the

JOINT STATEMENT BY CHAIRMAN AND MANAGING DIRECTOR


2007/2008 financial crisis to boost our asset base from

approximately S$840 million to S$1.38 billion, currently.

Our business is moving in the right direction and we intend

to ride on the growth momentum while remaining focused

on our rental business.

While the impact of economic trends and external factors

remain unpredictable, we expect to continue to improve

our performance for the coming year (“FY2013”) as

compared to FY2012. We will continue to place emphasis

on things that we can control. These include improving our

fundamentals, increasing the flexibility of our businesses

to meet ever-changing market conditions, and lowering

our risk profile.

In March 2012, the Group acquired the remaining 50%

interest in Indonesian company PT World Wide Equipment

South East Asia (“PTWWE”) that it did not own, making

it a wholly owned subsidiary. PTWWE operates on the

island of Batam, Indonesia, and is engaged in marine

equipment maintenance and overhaul, steel fabrication

for marine contractors, offshore lifting services, supply of

marine equipment and yard storage for the oil and gas

industry. This marine sector business, with its distinct

competitive advantage of being supported by the Group’s

14.0 hectare sea front land on Batam which the Group

was fortuitous to acquire and develop with a deep-sea

jetty facility in 2012, is expected to significantly add to Tat

Hong’s profitability in the future.

We thus approach FY2013 with optimism of growth

opportunities before us and a clear mission to capitalise

on what sets us apart – a focused, financially strong and

well-placed business.

OUR THANKS

Your Directors have proposed a final dividend of 1.5

Singapore cents per ordinary and convertible redeemable

preference share for FY2012, which, with the interim

dividend of 1.0 Singapore cents per share that was paid

during the financial year, in December 2011, adds up to a

total dividend of 2.5 Singapore cents per share for FY2012.

This is an increase of 67% compared to the total of 1.5

Singapore cents per share paid in respect of the previous

financial year, and represents a payout of approximately

34% of our FY2012 net profit attributable to shareholders.

We are confident in our strategy and people, and are poised

for growth. Our market opportunities are large and we

look optimistically towards seizing these opportunities.

We are driven towards creating a strong, focused

company that can consistently deliver long-term value

to our shareholders.

In concluding, we wish to take this opportunity to

thank all our stakeholders – you, our shareholders, our

business partners and associates, our bankers and last

but not least, our employees for the continued support

and contribution to Tat Hong.

Tan Chok Kian

Non-Executive Chairman

Ng San Tiong Roland

Managing Director


YEAR IN REVIEW

The financial year ended 31 March 2012 (“FY2012”) was

a very good year for Tat Hong, with the Group achieving

a 63% increase in net profit attributable to shareholders

to S$42.3 million on the back of a 23% growth in revenue

at S$719.8 million.

The strong performance was despite the challenging

global operating environment brought about by long drawn

economic issues in Europe and in the US, which had

widespread consequences on other regions.

All of the Group’s core business segments registered

double-digit revenue growth, with the exception of the

Tower Crane Rental division, whose revenue grew by 3%

mainly because it was somewhat affected by various local

shareholder issues in China that have since been resolved

in 4QFY2012.

Revenue in FY2012 rose to a record S$719.8 million, from

S$584.2 million in FY2011. The Group’s gross profit improved

26%, from S$208.5 million in the previous financial year

FY2011, to S$263.0 million in FY2012. Gross profit margin

also rose 0.8 percentage points to 36.5% in FY2012 mainly

due to the improved rental rates and higher utilisation from

the Crane Rental and General Equipment Rental divisions.

Due to the better performance by the Group’s major

associated companies, the Group’s FY2012 share of

associates’ profits increased by S$2.5 million to S$3.8

million as compared with FY2011.

However the Group’s share of losses in Joint Venture

companies increased by approximately S$1.9 million to

S$2.4 million in FY2012 as compared with FY2011 due

mainly to an impairment charge on oil-rigs and a provision

for doubtful debt.

With the significantly increased level of activities reflected

in the S$135.6 million and S$54.5 million increase in

Revenue and Gross Profit respectively in FY2012, total

operating expenses increased by 17% or S$28.2 million

to S$192.7 million as compared to FY2011. The increase

in operating expenses was represented mainly by a 53%

or S$7.0 million increase in total distribution expenses to

S$20.2 million and a 15% or S$20.4 million increase in

other operating expenses to S$157.9 million.

The rise in total distribution expenses resulted from increased

fuel and transport charges as well as motor vehicle lease

charges of S$2.9 million plus a S$3.6 million provision for

doubtful debts mainly for accounts receivables in China,

compared to a net write back of doubtful debt provision

of about S$744,000 in the previous year.

Included in the S$20.4 million increase in other operating

expenses was a S$14.8 million loss on disposal of tower

cranes through a public auction and a late payment penalty

charge of S$1.2 million incurred by 52.3% owned subsidiary,

Si Chuan Tat Hong Yuan Zheng Machinery Construction Co,

Ltd. Also, staff cost, from a larger headcount and annual

salary increases to cope with the increased level of activities

was higher by S$14.0 million. The higher level of activities

also resulted in S$5.6 million increase in the cost of upkeep

of machinery, vehicles, rental and insurance expenses.

The aforesaid rise in other operating expenses in FY2012

was however partially offset by a net foreign exchange

gain of S$4.7 million in FY2012 as compared to a loss

of S$1.7 million in FY2011, and the exclusion of a S$5.0

million impairment of goodwill by the Australian unit as well

as a one-off S$6.4 million charge for damages suffered as

a result of the floods in Australia in FY2011.

Equity attributable to Shareholders grew by S$37.5 million

to S$556.4 million as at 31 March 2012, from S$518.9

million a year earlier. The Group’s cash and cash equivalents

stood at a healthy S$76.8 million as at 31 March 2012.

Net gearing was 0.79 times, compared to 0.75 times

as at end March 2011 due to funding of investments in

freehold and leasehold properties - S$26.3 million, and

net purchases of plant and equipment - S$50.2 million

in FY2012, as the crane fleets continue to be expanded

to meet the strong demand.

Trade and other receivables increased by approximately

S$39.4 million in FY2012 as a result of increased revenues

and timing of sales. Trade and other payables increased

by approximately S$149.0 million in FY2012 due mainly to

purchases of inventories – S$132.3 million, which resulted

in a net increase of S$33.0 million in inventories for stocking

up to meet demand.


DISTRIBUTION ACHIEVES STRONG SALES IN KEY MARKETS

Revenue generated by the Distribution division in FY2012

increased by approximately 25% to S$339.2 million as

compared with FY2011. The biggest contributor to the

Group’s revenue continue to benefit from strong sales

achieved by the Group’s Australian Unit from recovery

activities to repair the damage wrought by natural disasters

in several Australian states in 2010/11. There were also

increased infrastructural activities in New South Wales and

Queensland as well as mining infrastructure in Western

Australia. Elsewhere in the Asia-Pacific, sales of excavators

rose as a result of strong demand in the logging, plantation

and mining industries in Vietnam and Indonesia.

Gross profit margin in FY2012 increased to 19.9% from

19.4% the previous financial year.

CRANE RENTAL BENEFITS FROM REGION’S GROWING INFRASTRUCTURAL NEEDS

The Group’s Crane Rental division generated S$225.0

million in revenue in FY2012 compared to S$185.0 million

in FY2011, with Gross Profit margin improving to 57.3%

from 56.0% in FY2011 as a result of higher rental and

utilisation rates.

All of the Group’s key rental markets experienced generally

higher rental rates and utilisation - in Singapore, from

construction activities on Jurong Island as well as MRT, LTA

and housing projects; in Malaysia, from increased activities

in iron ore mining as well as oil and gas and LNG projects;

in Hong Kong, the commencement of projects such as the

Hong Kong Boundary Crossing Facilities, Central – Wan

Chai Bypass and the Guangzhou – Shenzhen – Hong

Kong Express Rail Link contributed to higher revenues;

in Thailand, from the mass rail transportation system and

flood barrier project; in Australia, from ramping up activities

of the Gorgon LNG project in 4QFY2012 and improved

revenues recorded by its lift and shift arm.

AUSTRALIAN DEMAND DRIVES GENERAL EQUIPMENT RENTAL

The General Equipment Rental division registered the

highest percentage growth in revenue. Sales by this division

rose 39% to S$96.9 million in FY2012, mainly driven by

the continuing strong demand in Australia from recovery

efforts and re-building programmes following the natural

disasters that occurred in 2010 and 2011.

NEW TEAM AT TOWER CRANE RENTAL TO LEAD FUTURE GROWTH

Revenue generated by the Tower Crane Rental division

increased by 3% to S$58.7 million as compared to the

preceding year, due mainly to the overall increase in rental

contracts in second tier cities and the improved utilisation

rates achieved by Jiangsu ZhengHe Tat Hong Equipment

Rental Co., Ltd (“JZHTH”). However, 52.3% owned

subsidiary, Si Chuan Tat Hong Yuan Zheng Machinery

Construction Co., Ltd (“SCTH”) had to dispose its crane

assets through a court-sanctioned public auction that

resulted in it incurring a one-off accounting loss of S$14.8

million, and a late payment penalty charge of S$1.2 million

in settling its debts to a crane manufacturer. Although the

Group accounted for such one-off accounting loss, those

same operating crane assets continue post-auction to

belong to the Group under a different China subsidiary

which had won the public bid for the crane assets – and

in the process, preserving the unit and tonnage capacity

within the Group to meet future demand.

With the completion of the buy-over of the Chinese party’s

ownership in JZHTH in 4QFY2012 and a renewal of its

management team, the Tower Crane Rental Division is now

geared towards improving its performance.


YEAR IN REVIEW

CORPORATE DEVELOPMENTS TO ADD TO FUTURE GROWTH

In FY2012, the Group undertook various corporate and

M & A activities to increase the Group’s foot-print and to

strengthen its position to better benefit from the renewed

building and construction, and resource infrastructure

developments in the Asia-Pacific region. Some of these

activities, by the Group and its associated companies,

included:-

In June 2011 - Hup Hin Transport (M) Sdn Bhd, in which the

Group has an effective interest of 42%, was incorporated

in Malaysia to undertake the business of manufacturing

and repair of lifting gears, handling of heavy equipment as

well as crane towing and recovery services in Malaysia.

In July 2011 – 100% owned Tat Hong Crane Logistics Sdn

Bhd was incorporated in Malaysia, to provide reprocessing,

reconditioning and repair services and trading of heavy

machinery and equipment in Malaysia.

In September 2011 – a 50% joint venture Company - Tat

Hong (PNG) Limited (“THPNG”), was formed in Papua New

Guinea, with Curtain Bros Papua New Guinea Limited, a major

civil construction company which provides engineering, port

and transportation services and expertise to the resources

and construction industries in Papua New Guinea as the

other 50% partner. THPNG rents cranes, general plant

and equipment to various customers in O&G, mining and

infrastructure, and wholesales machinery, equipment and

supplies for the construction industry.

In January 2012 – Tat Hong (Thailand) Co., Ltd which was

previously a 49% owned associated company became a

wholly owned subsidiary with the Group’s acquisition of

the remaining 51% interest. It rents cranes and provides

spare parts and related services in Thailand.

In March 2012 – the Group acquired the remaining 50%

interest in PT World Wide Equipment South East Asia

(“PTWWE”) not owned by the Group to make it a wholly

owned subsidiary. PTWWE’s principal business activities

are those of marine equipment maintenance and overhaul,

steel fabrication for marine contractors, offshore lifting

services, supply of marine equipment and yard storage for

the oil and gas industry. It operates from the Indonesian

island of Batam.

Additionally, the Group, through wholly owned PT Tat Hong

(Batam) had acquired in late 2011, a 14.0 hectare plot of

land with deep sea frontage on the Indonesian island of

Batam and is in the midst of constructing a deep-sea jetty

facility to support its growing marine sector crane and

haulage business.

During FY2012, various equity injection and capital

restructuring transactions were undertaken in respect of

the operating entities in China to strengthen their capital

base and support capital expenditure in growing the tower

crane fleet size to 757 units as at 31 March 2012, from

684 units at the end of the previous financial year. Various

China shareholders’ issues, such as that in JZHTH, were

also resolved by the end of the financial year under review.


REGIONAL OPPORTUNITIES ABOUND

Having streamlined a number of areas of our business

operations in FY2012, and barring any unforeseen

circumstances and fallout from the Eurozone crisis, the

Group expects to continue to improve its performance in

FY2013 as compared to FY2012 as it seizes opportunities

in the growing infrastructural demands across the Asia-

Pacific region.

Our Australian operations are looking particularly strong with

encouraging demand for equipment and services arising

from on-going post-disaster rebuilding programmes and

growth opportunities from the resource and infrastructural

sectors in Western Australia and Queensland. More

projects are also expected from the Northern Territory

in the near future as the Territory Government alone has

committed a record A$1.5 billion of public spending on

infrastructure in its Budget 2011-121.

Divisionally, the outlook for the Group’s Equipment Distribution

unit remains favourable, especially in Australia where it should

benefit from newly awarded exclusive distribution rights for

a range of crushers and screens, as well as in Indonesia.

The Crane Rental division is also expected to continue its

growth momentum in FY2013, with a crane fleet of 627

units as at 31 March 2012 (573 units at 31 March 2011),

from the tremendous opportunities presented by major

infrastructure and construction projects in Singapore,

Hong Kong and across Southeast Asia, including Papua

New Guinea.

Now that various local shareholders’ issues in China have

been resolved, the management of the Tower Crane Rental

division expects to turn in a better performance in FY2013,

especially with a renewed focus to increase utilisation rates

and productivity in supporting the on-going and new large

building and infrastructure projects in Shenyang, Tianjin,

Wuhan, Chongqing, Sichuan and Guangdong. China is

also expected to resume the expansion of its nuclear

power sector in the second half of 2012 with many plans

reaching the final approval stage, and these are expected

to bring new opportunities for Tat Hong in terms of the

construction of these plants2.

Based on Tat Hong’s strong standing in the industry and

its high ranking among the world’s crane companies,

the Group is optimistic of its future as it continues to

invest in fleet expansion and renewal.

Sources:1 Northern Territory Government website: www.growingnt.nt.gov.au/ growing_territory/infrastructure_plan.html2 Chinadaily.com.cn: New nuclear projects ready to power ahead (18 May 2012)3 International Cranes, IC50 Rangkings, June 2011 ranked Tat Hong: • #1 crane company in Asia-Pacific, and #8 in the world, based on aggregate tonne-metres of mobile and crawler fleet • #1 in the world based on number of crawler cranes • #1 in China, and top 6 in the world, based on aggregate tonne-metres of tower crane fleet


FINANCIAL HIGHLIGHTS (ENDED 31 MARCH)

REVENUE (S$’M)

FY2008

FY2010

FY2009

FY2011

FY2012

584.2

719.8

PROFIT BEFORE TAX (S$’M)

FY2008

FY2010

FY2009

FY2011

FY2012 58.0

NET PROFIT ATTRIBUTABLE TO SHAREHOLDERS (S$’M)

FY2008

FY2010

FY2009

FY2011

FY2012

89.8

68.9

38.6

26.0

42.3

639.9

631.8

495.4

131.7

97.5

58.3

40.6


CRANE FLEET SIZE

123,900

136,547 140,000

60,000

120,000

100,000

80,000

40,000

20,000

0

216

262

@ March 2008 @ March 2009 @ March 2010 @ March 2011 @ March 2012

49,040

551

684

757

35,462

103,372

Tonnage-MetresUnits

TOWER CRANE FLEET GROWTH

Units Tonnage-Metres

GROWTH IN CRAWLER AND MOBILE CRANE FLEETTonnage-MetresUnits

400

500

420

440

460

480

600

520

540

560

580

620

640

Units Tonnage-Metres

@ March 2008 @ March 2009 @ March 2010 @ March 2011 @ March 2012

70,000

60,000

50,000

40,000

30,000

20,000

10,000

0

428

469481

573

627

42,52646,261

51,216

58,261

66,438660

0

200

400

600

800

100

300

700

500


5-YEARFINANCIAL SUMMARY

FY2012 FY2011 FY2010 FY2009 FY2008

Revenue 719.8 584.2 495.4 631.8 639.9

Gross Profit 263.0 208.5 190.9 241.1 244.2

Profit Before Tax 58.0 40.6 58.3 97.5 131.7

One-off items +18.1 +12.9 -5.1 +25.3 -6.0

Profit Before Tax (Excluding One-off Items)

76.1 53.5 53.2 122.8 125.7

Profit Attributable to Shareholders 42.3 26.0 38.6 68.9 89.8

FINANCIAL HIGHLIGHTS (S$’M)

FY2012 FY2011 FY2010 FY2009 FY2008

Property, plant and equipment 765.5 623.6 520.3 385.7 315.7

Inventories 234.2 200.8 201.0 217.7 207.5

Cash and cash equivalents 76.8 61.8 76.6 46.3 75.4

Debtors 184.8 145.4 112.7 97.7 113.3

Shareholders’ equity 556.4 518.9 498.6 389.0 373.1

BALANCE SHEET (S$’M)

FY2012 FY2011 FY2010 FY2009 FY2008Earnings per share (Singapore cents) 7.42 4.56 7.20 13.62 17.73

Net Asset Value per share (Singapore cents)

98 91 88 77 74

Return on Equity (%) 7.6 5.0 7.7 17.7 24.1

Net gearing 0.79 0.75 0.44 0.57 0.30

Interest cover 6.7 6.9 7.9 12.3 14.1

FINANCIAL RATIOS


GROSS PROFIT BY BUSINESS ACTIVITY (FY2012)

26%DISTRIBUTION*

49%CRANE RENTAL

20%GENERAL

EQUIPMENTRENTAL

5%TOWER CRANE RENTAL

REVENUE BY REGIONS (FY2012)

38%ASEAN

53%AUSTRALIA

8%CHINA

1%OTHERS

REVENUE BY BUSINESS ACTIVITY (FY2012)

47%DISTRIBUTION*

31%CRANE RENTAL

14%GENERAL

EQUIPMENTRENTAL

8%TOWER CRANE RENTAL


KEYMILESTONES

1997Listed on the

Australian Securities

Exchange (ASX)

2005APRIL: Conversion of

Secondary to Primary

Listing on the SGX

Mainboard

AUGUST: Established

a joint venture with

Fushun Yongmao to

enter tower crane rental

business in China

NOVEMBER: Delisted

Tat Hong from the ASX

DECEMBER: Listed

Australian subsidiary,

Tutt Bryant Group

Limited (TBG), on the

ASX

2001Established joint venture

company, BT Equipment,

with PSL Industries

2007FEBRUARY: Acquired Hunter

Valley-based Muswellbrook

Crane Services through TBG

APRIL: Carried out a private

placement of 40 million new

shares at S$1.46 per share

JUNE: Established a joint

venture with Jiangsu China

Nuclear Industry Huaxing

Construction Machinery, a

tower crane rental, heavy lifting

equipment and construction

services provider in China, with

a special focus on the Chinese

nuclear industry

JULY: Established a joint

venture company with China’s

largest tower crane rental

company, Beijing ZhongJian

Zhenghe Construction

Machinery

DECEMBER: Acquired

assets of Melbourne-based

Bradshaw Ultra Heavy

Haulage through TBG

2004FEBRUARY: Private

placement of 50 million new

shares at S$0.56 per share

DECEMBER: Acquired

Kingston Industries, a

leading Australian plant hire

and haulage company

2000Secondary listing

on the SGX

Mainboard

2006JUNE: Established a foreign-

sino equity joint venture

company, Shanghai Tat Hong

Equipment Rental

DECEMBER: Acquired

Queensland-based equipment

hire company, North Sheridan,

through TBG

2002AUGUST: Private

placement of 40 million

new shares at S$0.30

per share


2009APRIL: Established a joint

venture, Beijing Tat Hong

Zhaomao Equipment

Rental, to grow tower

crane rental business in

China

OCTOBER: Issued

65 million convertible

redeemable preference

shares at S$1.00 per

share to AIF Capital

DECEMBER: Established

a sino-foreign equity

joint venture, Si Chuan

Tat Hong Yuan Zheng

Machinery Construction

with Guangzhou Hailin

Resource, in China

2011MARCH: Acquired

remaining 51% in

ALCII-Tat Hong Joint

Venture Co., Ltd, in line

with expansion plans in

Vietnam. Name changed

to Tat Hong Equipment

Co. Ltd.

MARCH: Rebranded

TBG’s Crane Hire and

Heavy Haulage Division

across Australia under a

new name – Tutt Bryant

Heavy Lift & Shift

JUNE: Incorporated

42% held Hup Hin

Transport (M) Sdn Bhd to

undertake manufacturing

and repair of lifting

gears, handling of heavy

equipment as well crane

towing and recovery

services in Malaysia

JULY: Formed wholly

owned Tat Hong Crane

Logistics Sdn Bhd to

provide reprocessing,

reconditioning and repair

services and trading of

heavy machinery and

equipment in Malaysia

SEPTEMBER:

Established 50% JV

Company – Tat Hong

(PNG) Limited in Papua

New Guinea, with

Curtain Bros Papua New

Guinea Limited, to rent

cranes, general plant and

equipment, wholesale

machinery, equipment

and supplies

2008FEBRUARY: Listing of

Yongmao Holdings Limited

(24%-held associate)

APRIL: Acquired Townsville-

based Paramount Hire through

North Sheridan, a subsidiary

of TBG

MAY: Acquired Goulburn-

based Caradel Hire through

Kingston Industries, a

subsidiary of TBG

JUNE: Issued 50,662,673

bonus warrants

2010JUNE: Incorporated joint-

venture investment holding

company, Tat Hong Zhaomao

Investment, jointly held with

Fushun Yongmao, to hold

joint venture investments in

China

OCTOBER: Completed

privatisation and subsequent

delisting of TBG from the

ASX

NOVEMBER: Acquired 70%

in Hup Hin Transport Co

Pte Ltd, a heavy transport

service solution provider in

Singapore

2012JANUARY:Tat Hong (Thailand) Co Ltd

became a wholly owned subsidiary

MARCH: Acquired remaining 50% in PT

World Wide Equipment South East Asia

making it a wholly owned subsidiary

Acquired a further 45% interest in

Jiangsu Zhenghe Tat Hong Equipment

Rental Co., Ltd, for an effective interest

of 95.7%

MAY: Incorporated PT Tat Hong

HeavyEquipment Indonesia, to distribute

and wholesale machinery, equipment

and supplies to the constructionn and

mining industries in Indonesia


BOARD OF DIRECTORS

1

7

89

10

2

34

56

MR TAN CHOK KIAN1 | MR NG SAN TIONG ROLAND 2 | MR LEONG HORN KEE 3 | MR LOW SEOW JUAN 4 |MR MAK LYE MUN 5 | MR NG SUN HO TONY 6 | MR NG SANG KUEY MICHAEL 7 | MR NG SAN WEE DAVID 8 | MR ONG TIEW SIAM 9 | MR TSE PO SHING ANDY 10 |


MR TAN CHOK KIANNon-Executive Chairman

Mr Tan Chok Kian was appointed as the Non-

Executive Chairman of Tat Hong on 29 July 1997.

As Chairman of the Board, Mr Tan approves

our overall policies and strategic plans. In

addition, he is also Chairman of the Nominating

Committee. Mr Tan has served in various senior

appointments in the Singapore civil service from

1956 until his retirement in 1986 including the

positions of Permanent Secretary in the Ministry

of Finance and other Ministries. He also served

as Chairman of the Central Provident Fund

Board, Director-General, Nanyang University

and Chairman of the Post Office Savings Bank

of Singapore.

MR NG SAN TIONG ROLANDManaging Director

Mr Roland Ng joined our Group in 1979 and has

been Managing Director of our Company since

25 October 1991. He has more than 25 years

experience in the heavy equipment and plant

hiring business. He bears overall responsibility

for developing our Group’s strategy which

encompasses the review of new business

development and potential acquisitions in the

region. Mr Ng is also responsible for our corporate

planning and policy and strategy formulation. He

holds a Bachelor of Science (Honours) Degree

from the University of Technology Loughborough

(United Kingdom).

MR LEONG HORN KEENon-Executive Director

Mr Leong Horn Kee was appointed as an

Independent Director of Tat Hong on 19 January

2001. He is the Chairman/CEO of CapitalCorp

Partners Pte Ltd, a financial services and

consultancy company. Mr Leong has experience

in both the public sector in economic planning,

trade and investments, and in the private sector

in corporate finance, venture capital, merchant

banking, hotels, property development and

management. He served as a Member of

Parliament for 22 years from 1984 to 2006. Mr

Leong was appointed Singapore’s Non-Resident

Ambassador to Mexico in 2006 and a member

of the Securities Industry Council in 2008. Mr

Leong holds a degree (Honours) in Production

Engineering from Loughborough University,

UK; a degree (Honours) in Economics from the

University of London, UK; a degree in Chinese

Language and Literature from Beijing Normal

University, an MBA from INSEAD, France; and a

Master in Business Research from University of

Western Australia.


MR LOW SEOW JUANNon-Executive Director

Mr Low Seow Juan was appointed Non-Executive

Director on 25 January 2006. He is a Consultant

with the law firm Lee & Lee and Chairman of Pinetree

Capital Partners Pte Ltd, a Singapore venture capital

fund company.

Mr Low started his working career with the Singapore

Public Works Department, Morgan Grenfell (Asia)

Limited and the Singapore Economic Development

Board heading the Aerospace, Medical Optical

Division. Mr Low is a director of a number of public

and private companies including SHC Capital Limited

and Amtek Engineering Limited.

Mr Low holds a Master in Business Administration

from the National University of Singapore, a Bachelor

of Law degree from the University of London and a

Bachelor Degree in Electrical Engineering from Monash

University, Australia.

MR MAK LYE MUNNon-Executive Director

Mr Mak Lye Mun was appointed as our Non-Executive

Director on 1 June 2005. He is the Country Head

and CEO of CIMB Bank Singapore. He is also a Non-

Executive Director of CIMB Securities Pte Ltd and CIMB

Securities International Pte Ltd. In addition, Mr Mak is a

Non-Executive Director of Boardroom Limited. He has a

Bachelor of Civil Engineering (First Class Honours) degree

from the University of Malaya in Malaysia and a Master

of Business Administration degree from the University of

Texas at Austin in the United States. Mr Mak is a qualified

Chartered Financial Analyst.

MR NG SUN HO TONYDeputy Managing Director

Mr Tony Ng joined the Group in 1975 and was appointed

as an Executive Director of the Company on 2 November

1991. He is the Group’s Deputy Managing Director and

also holds the position of CEO – Singapore (Rental and

Heavy Lift), Indonesia, Indochina and Middle East. He

has more than 34 years of work experience in the heavy

equipment and plant hire business.

Besides managing the Group’s business portfolio in

Indonesia, Indochina, Papua New Guinea, Middle East

and the Singapore Rental and Heavy Lift division, Mr

Tony Ng is reponsible for identifying and exploring new

business opportunities and markets for the Group. He

has built up and maintains strong relationships with key

heavy equipment manufacturers.

MR NG SANG KUEY MICHAELExecutive Director

Mr Michael Ng joined the Group in 1977 and was

appointed as an Executive Director of the Company on

1st October 1996.

Together with our Deputy Managing Director, Mr

Michael Ng oversees the Group’s extensive Asia (ex-

China) business and operations portfolio with a focus

on the Malaysia, Thailand and Hong Kong markets. He

is responsible for Equipment Sales, the Logistics and

Transportation businesses for the Singapore market

and the Offshore and Marine business segments. He

is also responsible for Human Resource and the sales

and purchasing functions for the Singapore offices.

Mr Michael Ng has spent the majority of his working years

in the heavy equipment industry, especially in the cranes

sector, and has built strong relationships and network

with clients, major suppliers and crane manufacturers.

BOARD OF DIRECTORS


MR NG SAN WEE DAVIDExecutive Director

Mr David Ng has been an Executive Director of our

Company since 1 September 1999. He is the Head of our

Group’s Sales Division for our ASEAN operations and is

responsible for implementing our Group’s policies and the

conduct of businesses as well as co-ordinating activities

within our Group for our ASEAN operations. Mr Ng has

more than 13 years of experience in the heavy equipment

industry. He has an honours degree in Computer Science

from the University of Liverpool (United Kingdom).

MR ONG TIEW SIAMNon-Executive Director

Mr Ong Tiew Siam was appointed as our Director since

1999. He has more than 32 years of experience in finance

and administrations. He graduated with a Bachelor of

Commerce (Accountancy)(Honours) degree in 1975

from the Nanyang University of Singapore and is a fellow

member of the Institute of Certified Public Accountants of

Singapore and CPA Australia. He is also a member of the

Singapore Institute of Directors. Mr Ong sits on the board

of several listed companies.

MR TSE PO SHING ANDYNon-Executive Director

Mr Andy Tse was appointed to the Board as a Non-

Executive Director on 22 October 2009. He is a Managing

Director at AIF Capital Limited (“AIF Capital”) and has

accumulated more than 15 years of private equity

experience in Greater Asia, including Korea, Japan,

China, Hong Kong, Singapore, the Philippines, Indonesia,

Australia, Sri Lanka, India and Thailand. Having been with

AIF Capital since 1994, Mr Tse has led investments in

transportation, logistics and manufacturing. He represents

AIF Capital on the boards of various portfolio companies

including locally-listed Olam International Limited. Prior

to AIF Capital, Mr Tse worked with Hopewell Holdings

Limited and was involved in the investment, development,

financing, construction and operations of infrastructure

projects amongst others. He holds a Bachelor of Science

and MBA from the Chinese University of Hong Kong and

is also a CFA charterholder.


KEYMANAGEMENT

MR NG SAN TIONG ROLANDPresident/Group Chief Executive Officer

Mr Roland Ng joined our Group in 1979 and assumed his current capacity since 25 October 1991.

With more than 30 years of experience in the heavy equipment and plant hiring business, he bears

overall responsibility for developing our Group’s strategy. This includes the review of new business

developments and potential acquisitions in the region.

Mr Ng also spearheads our corporate planning policy and strategy formulation.

In addition, Mr Ng oversees Tat Hong’s tower crane rental subsidiaries in China as well as our

investment in our 24%-owned associated company, Singapore-listed Yongmao Holdings Limited.

He holds a Bachelor of Science (Honours) Degree from the University of Technology Loughborough

(United Kingdom).

MR NG SUN HO TONYCEO – Singapore (Rental & Heavy Lift),Indonesia, Indochina, Middle East

Mr Tony Ng is the CEO responsible for the Singapore (Rental & Heavy Lift) Division, and the operations

in Indonesia, Indochina, Papua New Guinea and Middle East.

Mr Tony Ng maintains strong relationships with key heavy equipment manufacturers, identifying and

exploring new businesses with them to expand our Group in the respective markets.

He has more than 34 years experience in the heavy equipment and plant hiring business.

MR NG SANG KUEY MICHAELCEO – Singapore (Distribution & Marine), Malaysia, Thailand, Hong Kong

Mr Michael Ng is the CEO overseeing the Singapore (Distribution & Marine), Malaysia, Thailand and

Hong Kong operations. In Singapore, he is also responsible for Equipment Sales and the logistics,

transportation and Offshore and Marine segments. He is also in charge of Human Resource and the

sales and purchasing functions for the Singapore office.

Mr Michael Ng has spent the majority of his working years in the heavy equipment industry,

especially in the cranes sector, and has built strong relationships and network with clients, major

suppliers and crane manufacturers.


MR DAVID HAYNESSenior Executive Vice PresidentCEO - Australia

Following Tat Hong’s purchase of Tutt Bryant Group in 1996, Mr Haynes was appointed as an

executive director, working alongside Tat Hong to expand its crane rental business in Australia. In

1999, he was appointed as Managing Director of Tutt Bryant Group.

Since leaving the British Army in 1987 and arriving in Australia, Mr Haynes has held various senior

management and executive director positions in diverse industries including construction, property

development and commercial property management, capital goods sales, franchising and hospitality.

He brings to the Group rich experience gained from working for Tutt Bryant Group with a mixed

portfolio of businesses.

MR LIONAL TSENGGroup Chief Financial Officer/Company SecretaryHead of Corporate

Lional Tseng, CPA, is our Group Chief Financial Officer, Company Secretary and Head of Corporate.

He has overall responsibility for the Group’s financial and other corporate functions, including

treasury, tax, risk management and investor relations.

He has more than 34 years of wide experience in finance, tax and treasury management in diverse

businesses including real estate development and construction, IT and architectural and engineering

consulting, and international trading. He has held senior executive positions and directorships in

large groups of companies and has undertaken major corporate financial and M & A transactions in

Singapore, various ASEAN countries, India, China and USA.

He sits on the boards of a number of Voluntary Welfare Organisations, chairs their audit committees

and had also served as a member of the audit committee of a statutory board.

MR YAU KOK SAN SEANSenior Vice PresidentHead of Corporate - China

Mr Sean Yau is currently the Senior Vice President, Head of Corporate - China. He has more than 10

years experience in corporate finance and venture capital in China.

Mr Yau started his working life in 1987 as an engineer with Singapore Technologies, moving on to

Vertex, the venture capital arm of Singapore Technologies, as an investment manager eventually.

Thereafter, he was the Finance Director in a technology start up. Prior to joining Tat Hong, Mr Yau

was a Consultant providing corporate finance advisory to Chinese companies.

He holds a Master of Business Administration from the National University of Singapore and a Bachelor

Degree in Engineering (First Class Honours) from Nanyang Technological University (Singapore).


INVESTORRELATIONS

Tat Hong’s Investor Relations efforts have always been guided by the principle of achieving best practices in corporate governance and disclosure. We endeavour to establish and maintain proactive, transparent and engaging long-term relationships with our stakeholders. Ultimately, we strive to understand the pressing issues at hand for our investing public, and effectively address them in a timely fashion.

We remain firm in our belief to have regular and open communications with analysts, fund managers, shareholders and the media. We have a deeply entrenched spirit of corporate governance and transparency.

This year, through constant updates on corporate developments and strategic business plans via various communication channels, we have worked hard to step up communications so as to provide balanced insights into the Group’s performance, key corporate developments as well as our strategies to further growth.

Timely DisclosureTo reach out to our stakeholders in an effective manner, information is shared in a timely, equitable and fair manner with all individuals and groups. Material information is immediately uploaded onto the SGX-ST website as well as the Investor Relations section on our corporate website. We are easily accessible via our website where shareholders are able to provide their feedback or have their queries answered.

Effective CommunicationWe continued to organise regular meetings and briefing meetings, which also included conference call-ins. Additionally, we remained an active participant in the regional equity conferences organised by leading brokerage firms and participated in a number of investor conferences held in Asia. These meetings allowed us to interact with institutional shareholders and meet with potential new ones.

Shareholder ReturnsWe strive to reward our shareholders with a reasonable dividend payout to thank them for their support. Tat Hong was ranked number 411 in terms of dividend yield out of 82 companies covered by OCBC Investment Research in its report titled “Beyond the Curve” issued on 20 June 2012. Moving forward, we will continue to strive to give our shareholders good returns for their investment.

FY2013 EVENT CALENDAR

EVENTS DATES (proposed)FY2013 First Quarter Results Announcement August 13, 2012

FY2013 Second Quarter Results Announcement November 12, 2012

FY2013 Third Quarter Results Announcement February 12, 2013

FY2013 Fourth Quarter Results Announcement May 28, 2013

1 Source: OCBC Investment Research: Beyond the Curve (20 June 2012)

RESEARCH COVERAGE

CIMB Securities

DBS Vickers

OCBC Investment ResearchCiti Investment Research and Analysis

1-year Historical Trading Chart

SEP 19MAY 16 JUN 13 JUL 18 AUG 15 OCT 17 NOV 14 DEC 19 2012 16 FEB 13 MAR 19 APR 16 30

S$1.10S$1.08

S$1.02

S$0.96S$0.98

S$1.12

S$1.06S$1.04

S$1.00

S$0.94

S$0.90S$0.88S$0.86S$0.84S$0.82S$0.80S$0.78S$0.76S$0.74S$0.72S$0.70S$0.68S$0.66S$0.64

S$0.92


SINGAPORE

Tat Hong Plant Leasing Pte Ltd

100%

Tat Hong

HeavyEquipment (Pte.) Ltd

100%

Tat Hong Machinery Pte Ltd

100%

Tat Hong Training Services

Pte Ltd

100%

Tat Hong United Logistics

Pte Ltd

100%

Tat Hong Heavylift Pte Ltd

100%

Load Controls Systems Pte Ltd

70%

Peng Koon

Heavy Machinery Pte Ltd

70%

Hup Hin Transport Co Pte Ltd

70%

Tat Hong Offshore and

Marine Services Pte Ltd

50%

THL Foundation

Equipment Pte Ltd

45%

Kian Ho Bearings Ltd

31%

Yongmao Holdings Limited

24%

AUSTRALIA

Tutt Bryant Group Limited

100%

BT Equipment Pty Ltd

100%

Muswellbrook

Crane Services Pty Ltd

100%

Kingston Industries WA Pty Ltd

100%

TBF Oceania Pty Ltd

50%

Kingston Industries Pty Ltd

100%

Office Cleaning Services Pty Ltd

100%

North Sheridan Pty Ltd

100%

Relsok Pty Ltd

100%

CHINA

Shanghai Tat Hong

Equipment Rental Co., Ltd.

91%*

China Nuclear Huaxing TatHong

Machinery Construction Co. Ltd

71%*

Tat Hong Zhaomao

Investment Co., Ltd

75%

Jiangsu Zheng He TatHong

Equipment Rental Co., Ltd

96%*

Beijing Tat Hong ZhaoMao

Equipment Rental Co., Ltd

61%*

Si Chuan Tat Hong Yuan Zheng

Machinery Construction Co. Ltd.

52%*

GROUP STRUCTUREKEY OPERATING ENTITIES AS AT MARCH 2012

TAT

HO

NG

HO

LDIN

GS

LTD

Distribution & Crane Rental

Subsidiaries

Associates

General Equipment Rental Tower Crane Rental

MALAYSIA VIETNAM

THAILAND

INDONESIA

HONG KONG

Tat Hong Plant Hire Sdn Bhd

100%

Tat Hong (Thailand) Co., Ltd

100%

Tat Hong HeavyEquipment

(Hong Kong) Limited

100%


(Macau) Limited

100%

PT Tatindo HeavyEquipment

95%

PT World Wide Equipment

South East Asia

100%

PT Tat Hong Batam

100%

PAPUA NEW GUINEA

Tat Hong (PNG) Limited

50%

* rounded to nearest percent

Tat Hong Equipment Co. Ltd

100%

Tat Hong Vietnam Co., Ltd

70%


CORPORATEINFORMATION

BOARD OF DIRECTORS

Mr Tan Chok Kian

(Chairman)

Mr Ng San Tiong Roland

(Managing Director)

Mr Ng Sun Ho Tony

(Deputy Managing Director)

Mr Ng Sang Kuey Michael

Mr Ng San Wee David

Mr Leong Horn Kee

Mr Low Seow Juan

Mr Mak Lye Mun

Mr Ong Tiew Siam

Mr Tse Po Shing Andy

AUDIT COMMITTEE

Mr Leong Horn Kee

(Chairman)

Mr Low Seow Juan

Mr Tan Chok Kian


REMUNERATION COMMITTEE

Mr Leong Horn Kee

(Chairman)

Mr Low Seow Juan

Mr Mak Lye Mun

Mr Tan Chok Kian

NOMINATING COMMITTEE

Mr Tan Chok Kian

(Chairman)


Mr Low Seow Juan

Mr Leong Horn Kee

SHARE OPTION /PERFORMANCE SHARES PLAN COMMITTEE

Mr Mak Lye Mun

(Chairman)


Mr Ng Sun Ho Tony

Mr Ong Tiew Siam

RISK MANAGEMENT COMMITTEE

Mr Mak Lye Mun

(Chairman)

Mr Ong Tiew Siam

Mr Tan Chok Kian


COMPANY SECRETARIES

Mr Lional Tseng

Ms Ong Beng Hong

(Joint Company Secretaries)

SINGAPORE REGISTERED OFFICE

18 Sungei Kadut Avenue

Singapore 729489

Tel: (65) 6269 0022

SINGAPORE SHARE REGISTRAR & SHARE TRANSFER OFFICE

M & C Services Private Limited

138 Robinson Road

The Corporate Office #17-00

Singapore 068906

Tel: (65) 6227 6660

AUDITOR

KPMG LLP

Certified Public

Accountants

16 Raffles Quay #22-00

Hong Leong Building

Singapore 048581

Partner-in-Charge:

Mr Tan Huay Lim

(Appointed in FY2012)


FINANCIAL CONTENTSCORPORATE GOVERNANCE 34 | DIRECTORS’ REPORT 45 | STATEMENT BY DIRECTORS 52 | INDEPENDENT AUDITORS’ REPORT 53 | STATEMENTS OF FINANCIAL POSITION 54 | CONSOLIDATED INCOME STATEMENT 55 | CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME 56 | CONSOLIDATED STATEMENT OF CHANGES IN EQUITY 57 | CONSOLIDATED STATEMENT OF CASH FLOWS 59 | NOTES TO THE FINANCIAL STATEMENTS 61 | ANALYSIS OF SHAREHOLDINGS 129 | ANALYSIS OF WARRANTHOLDINGS 131 | NOTICE OF ANNUAL GENERAL MEETING 132 | PROXY FORM

CORPORATEGOVERNANCE

INTRODUCTION

The Board of Directors (the “Board”) of Tat Hong Holdings Ltd (the “Company”) is committed to a high standard

of corporate governance and has always recognised the importance of good governance to enhance corporate

performance, accountability and protection of key stakeholders’ interests. This report describes the Company’s

corporate governance practices with specific reference to the Code of Corporate Governance 2005 (the “Code”),

pursuant to Rule 710 (1) of the Listing Manual of Singapore Exchange Securities Trading Limited (“SGX-ST”).

BOARD MATTERS

Board’s Conduct of its Affairs

The Board’s primary role is to protect and enhance long-term shareholders’ value. The Board meets at least quarterly

each year to oversee the business affairs of the Group, reviews and approves the financial objectives and the strategies

to be implemented by Management including significant acquisitions and divestments; reviews management’s

performance and sets the Company’s standards on major policies; establishes a framework of prudent and effective

controls which enables the identification, assessment and management of risks; and approves the release of the

quarterly and full year financial results. The Board also establishes controls over capital expenditure, investments and

divestments, funding decisions and bank borrowings.

Board meetings are scheduled in advance on a yearly basis. This enables the Board to meet on a regular basis

without interfering with the Company’s operation. The Board may request for further clarification and information from

Management on all matters within its purview. Ad-hoc meetings are convened as and when circumstances require.

To assist the Board in the execution of its responsibilities, Board Committees, namely Audit, Nominating, Remuneration,

Risk Management and Share Options/Performance Shares Plan Committees have been established and delegated

certain functions. All Board Committees are chaired by Independent Directors. The various Committees have written

terms of references which are reviewed from time to time.

The Company’s Articles of Association provides for meetings of the Board to be conducted by way of telephone

conference or video conference or other methods of simultaneous communication by electronic means.

Directors’ Training

Management conducts briefings and orientation programmes to familiarise newly appointed Directors with the various

businesses, operations and processes of the Group. The Board is also updated regularly on any changes in policies,

laws and regulations that are relevant and apply to the Group and its businesses. Relevant courses for directors

conducted by various professional institutions are attended by Directors when possible as part of their continuous

training. The Company organises seminars in-house on various topics such as the Code of Corporate Governance

and other relevant legislations conducted by legal and other professionals for Directors and Management.

Board Composition and Guidance

The composition and size of the Board are reviewed from time to time by the Nominating Committee to ensure that the

Board has an appropriate number of independent Directors and a balance of expertise, skills and core competencies

in areas including finance, legal, business or management experience.

Factors that are considered in evaluating a Director as independent include where a Director has no relationship with

the Company or Group, with any shareholder with 10% or more interest in the Company, or its officers that could

interfere, or be reasonably perceived to interfere, with the exercise of his independent business judgement in the

interest of the Company.


CORPORATEGOVERNANCE

The Board comprises ten members consisting of four Executive Directors, two Non-Executive Non-Independent

Directors and four Independent Directors. The Board members are:

Mr Tan Chok Kian (Non-Executive and Independent Chairman)

Mr Ng San Tiong Roland (Managing Director)

Mr Leong Horn Kee (Non-Executive Independent Director)

Mr Low Seow Juan (Non-Executive Independent Director)

Mr Mak Lye Mun (Non-Executive Independent Director)

Mr Ng Sun Ho Tony (Deputy Managing Director)

Mr Ng Sang Kuey Michael (Executive Director)

Mr Ng San Wee David (Executive Director)

Mr Ong Tiew Siam (Non-Executive Non-Independent Director)

Mr Tse Po Shing Andy (Non-Executive Non-Independent Director)

The Board believes that there is a strong and independent element on the Board, with a majority of non-executive

Directors, which allows the Board to exercise its objective and independent judgement on all affairs. No individual

or small group of individuals dominate the Board’s decision-making process. The Directors consider the Board

an appropriate size and possesses the right mix of skills and experience. This composition of the Board enables

Management to benefit from its diverse and objective perspective on issues brought before the Board.

The Chairman & the Group Chief Executive Officer

The Chairman and the Group CEO are not related. There is a clear separation of the roles and responsibilities of the

Chairman and the Group CEO. The Chairman is an independent Director who leads the Board and is responsible for

the Board’s workings and proceedings. The Chairman, together with other non-executive directors, ensures that the

Board engages in constructive debate with Management on various matters, including strategic issues and business

plans. The Group CEO is responsible for implementing the Group’s strategies and policies, and for conducting the

Group’s businesses.

The following table shows the appointment of Directors on Board committees for FY2012:

Board MemberAudit

CommitteeNominating Committee

Remuneration Committee

Risk Management Committee

Share Options / Performance Shares Plan Committee

Tan Chok Kian Member Chairman Member Member

Ng San Tiong Roland Member Member

Ng Sun Ho Tony Member

Tse Po Shing Andy Member Member

Leong Horn Kee Chairman Member Chairman

Ong Tiew Siam Member Member

Low Seow Juan Member Member Member

Mak Lye Mun Member Chairman Chairman


CORPORATEGOVERNANCE

The following table shows Directors’ attendance at Board and Board Committee Meetings for FY2012:-

Board MemberBoard

Meeting

Audit Committee

Meeting

Nominating Committee

Meeting

RemunerationCommitteeMeetings

Risk Management Committee

Meeting

Share Options /Performance Shares Plan Committee

Meeting

Tan Chok Kian 4/4 4/4 1/1 1/1 2/2 –

Ng San Tiong Roland 4/4 – 1/1 – – 2/2

Ng Sun Ho Tony 4/4 – – – – 2/2

Ng Sang Kuey Michael 3/4 – – – – –

Ng San Wee David 4/4 – – – – –

Tse Po Shing Andy 4/4 4/4 – – 2/2 –

Leong Horn Kee 4/4 4/4 1/1 1/1 – –

Ong Tiew Siam 4/4 – – – 2/2 2/2

Low Seow Juan 4/4 4/4 1/1 1/1 – –

Mak Lye Mun 4/4 – – 1/1 2/2 2/2

Board Membership and Performance

The Nominating Committee (the “NC”) comprises four members of whom three are Non-Executive Independent

Directors:-

Mr Tan Chok Kian (Chairman)

Mr Leong Horn Kee

Mr Low Seow Juan


The NC is responsible for the following:

• Assessing the necessary and desirable competencies of Board members and Board composition;

• Reviewing Board succession plans and recommending the appointment, re-appointment and/or removal of

Directors;

• Evaluating the Board’s performance and effectiveness as a whole;

• Reviewing the independence of Directors in accordance with the Code’s definition of “Independent Director”;

and

• Identifying, reviewing and recommending candidates for Senior Management positions in the Group.

The Chairman of the NC is not associated with the substantial shareholder.


CORPORATEGOVERNANCE

The NC applies the following principles in making recommendations to the Board:

• Ensuring a formal and transparent procedure for the appointment and re-appointment of Directors to the Board

and of Senior Management or, if in the case of a new Director or senior manager, consider the recommendations

of the Board members as well as candidates from external executive search consultants;

• Ensuring that multiple board representations held by any Board member does not impede that Director’s

performance in carrying out his duties to the Company; and

• Ensuring the Board comprises Directors who, as a group, have the necessary range of expertise, skills and core

competencies.

The NC has reviewed the independence of each Independent Non-Executive Director in accordance with the Code’s

definition of independence and considered the independence in character and judgement of such Director.

The NC has also considered the multiple board representations held by some Directors and has satisfied itself that

they do not impede such Director’s performance in carrying out his duties to the Company.

The NC adopts a formal board evaluation process, including using evaluation questionnaires covering areas which

include Board composition, information management, Board processes, CEO performance and succession planning,

and standards of conduct, in assessing the effectiveness of the Board as a whole and the contribution of each Director

to the effectiveness of the Board. The results of such appraisals were presented to the Board with recommendations

for improvement to the overall standard of governance.

Access to information

All Directors are provided with complete, adequate and timely information prior to meetings and upon request to enable

them to fulfil their duties properly. Management provides financial reports and other relevant and material information

with adequate explanations to all Directors on a regular and monthly basis outside the specific requirements for Board

and Board Committees’ meetings.

In exercising their duties, the Directors have access to the advice of Senior Management and the Company Secretary

who is responsible to the Board for ensuring that Board procedures are followed and that applicable laws and

regulations are complied with. If necessary, the Directors can seek professional advice and service in areas which

they deem necessary, at the expense of the Company. The Company Secretary and/or his representative is present

at all Board and Board Committees’ meetings. All Board members have separate and independent access to the

Company Secretary at all times.

REMUNERATION MATTERS

The policies on remuneration - salaries, benefits and incentives of the Group’s Executive Directors and Senior

Management are reviewed and set by the Remuneration Committee (the “RC”) of the Board of Directors. The RC

comprises four Non-Executive and Independent members. They are:

Mr Leong Horn Kee (Chairman)

Mr Low Seow Juan

Mr Mak Lye Mun

Mr Tan Chok Kian


CORPORATEGOVERNANCE

The RC meets at least once a year and performs the following principal functions:

• Reviews and approves recommendations on remuneration policies and the remuneration for the Group’s Senior

Management;

• Approves the annual increment and bonuses of key executives as recommended by Management;

• Reviews all matters concerning Non-Executive Directors’ fees to ascertain that such fees commensurate with

the contribution and responsibility of the Director; and

• Reviews and approves any executive related to the controlling shareholders whose remuneration is above

$150,000 per annum.

The RC ensures that none of the Directors is involved in deciding his own remuneration. Each member of the RC

refrains from voting on any resolutions in respect of the assessment of his remuneration.

In setting the remuneration packages of the Executive Directors and other senior managers, the Company makes a

comparative study of the packages of executives in comparable industries or companies of a similar market size and

takes into account the performance of the company.

There are no service agreements with any Non-Executive Director whose terms of appointment are in accordance

with the Articles of Association of the Company.

Where the need arises, the RC engages external professional human resource consultants for advice on matters

relating to remuneration.

The Share Options/Performance Shares Plan Committee (the “SOC”) comprises of four Directors –

Mr Mak Lye Mun (Chairman)

Mr Ong Tiew Siam


Mr Ng Sun Ho Tony

The SOC is responsible for and has absolute discretion, provided that no member of the SOC shall participate in

any deliberation or decision in respect share options to be granted to him or held by him, for the administration of

the Company’s Employee Share Options Scheme 2006 and the Performance Shares Plan and includes the following

functions:

• Review share options scheme and performance shares plan to ensure that they are effective in rewarding

deserving employees;

• Determine the eligibility of employees to participate in the share options scheme and performance shares plan;

• Offer and grant share options and / or performance shares in accordance with the provisions of the Employee

Share Options Scheme 2006 and the Performance Shares Plan.


CORPORATEGOVERNANCE

As a safeguard against abuse, where share options are proposed to be granted to or held by Executive Directors,

controlling shareholders or associates of controlling shareholders, all members of the Board who are not executive

directors, controlling shareholders or associates of controlling shareholders will be involved in the deliberations of

the same.

Non-executive Directors are not eligible to participate in the Performance Shares Plan. A grant of award of performance

shares to any controlling shareholder or associates of controlling shareholders require the specific approval of

shareholders to be obtained at a general meeting.

No share options or performance shares were granted during the financial year in review.

Remuneration of Directors and Senior Management

The compensation of Non-Executive Directors is based on a framework comprising a basic retainer fee, fee for

chairmanship of the Board or a Committee of the Board and service on a Committee. Executive Directors of the

Company do not receive Directors’ fees from the Company. The details of remuneration paid to or accrued to the

Directors of the Company for the financial year ended 31 March 2012 are set out in the table below:

Name of DirectorRemuneration Band ($’000)

Total %

Fees %

Salaries * %

Bonus ** %

1 Tan Chok Kian ® 1 to 200 100 100 0 0

2 Leong Horn Kee ® 1 to 200 100 100 0 0

3 Mak Lye Mun ® 1 to 200 100 100 0 0

4 Low Seow Juan ® 1 to 200 100 100 0 0

5 Ong Tiew Siam ^ 1 to 200 100 100 0 0

6 Tse Po Shing Andy ^ 1 to 200 100 100 0 0

7 Ng San Tiong Roland 1401 to 1600 100 5 43 52

8 Ng Sang Kuey Michael © 1001 to 1200 100 0 38 62

9 Ng Sun Ho Tony © 801 to 1000 100 8 46 46

10 Ng San Wee David © 401 to 600 100 0 54 46

The aggregate remuneration of the Group’s 5 top-earning Senior Executives for the financial year ended

31 March 2012 is set out below:

Name of ExecutiveRemuneration Band ($’000)

Total %

Fees %

Salaries * %

Bonus ** %

1 D.J. Haynes 1001 to 1200 100 0 92 8

2 Jim Blaker 401 to 600 100 0 79 21

3 Yen Sze Hwa 401 to 600 100 50 46 4

4 Chia Hai Kwang Roy 401 to 600 100 68 30 2

5 Kelvin Woon 201 to 400 100 0 73 27


CORPORATEGOVERNANCE

Family members related to Group CEO

Remuneration Band ($’000)

Total %

Fees %

Salaries * %

Bonus ** %

1 Ng Sun Hoe Patrick © 401 to 600 100 0 52 48

2 Ng Chen Wei n 401 to 600 100 0 90 10

3 Ng San Guan William © 201 to 400 100 0 70 30

4 Ng Sun Oh Lewis © 201 to 400 100 0 54 46

© Mr Ng Sun Ho Tony, Mr Ng Sang Kuey Michael, Mr Ng San Wee David, Mr Ng San Hoe Patrick, Mr Ng San Guan William and Mr Ng Sun Oh Lewis

are the brothers of Mr Ng San Tiong Roland, Group Managing Director. n Mr Ng Chen Wei is the son of Mr Ng San Tiong Roland, Group Managing Director.® Non-Executive and Independent Director^ Non-Executive and Non-Independent Director

* Salaries included Allowance, Central Provident Fund contribution, Transport Allowance, Superannuation Fund, Long Service Leave and Benefits-

in-kind.

** Bonuses and fees are paid in accordance with service agreements.

Accountability

It is the Board’s aim to present the Company’s stakeholders with a fair, balanced and clear assessment of the

Company’s financial performance, position and prospects. To facilitate the Board’s regular oversight of the Group,

Management provides the Board with appropriate detailed management accounts and report of the Group’s financial

performance and position on a monthly basis. The Group CEO and Group CFO have provided written confirmation

to the Board on the integrity of the Company’s and the Group’s financial statements and the internal control systems

and compliance for the financial year ended 31 March 2012.

Internal Controls, Audit Committee and Internal Audit

The Board acknowledges that it is responsible for the overall internal control framework adopted by the Group but

also notes that no cost-effective system of internal controls can preclude and provide absolute assurance against

errors, irregularities or loss as a system is designed to manage rather than eliminate the risk of failure to achieve

business objectives. The Company maintains a sound internal control system to safeguard the Company’s assets.

The Audit Committee, through the assistance of the internal auditors and external auditors, reviews and reports to the

Board on the adequacy of the Company’s system of internal controls, including financial, operational and compliance

controls. In assessing the effectiveness of internal controls, the Audit Committee ensures that the key objectives are

met, material assets are safeguarded, fraud or errors in the accounting records are prevented or detected, accounting

records are accurate and complete, and reliable financial information is prepared in compliance with applicable internal

policies, laws and regulations.

The Board is satisfied that the Company’s framework on internal controls is adequate to provide reasonable assurance

on the effectiveness of the internal control systems put in place by the management. The Board, with the concurrence

of the Audit Committee, is of the opinion that the system of internal controls put in place by the management is

adequate to address financial, operational and compliance risks of the Group.

The Audit Committee (the “AC”) comprises the following four members, three of whom are Non-Executive Independent

Directors and one a Non-Executive Non-Independent Director:

Mr Leong Horn Kee (Chairman)

Mr Low Seow Juan

Mr Tan Chok Kian



CORPORATEGOVERNANCE

The AC meets four times a year and performs the following functions:

• Assessment of performance and independence of external Auditor and recommendations for the appointment

or removal of external Auditor;

• Assessment of the performance and objectivity of the internal audit function;

• Review the reports on internal audit undertaken by third party audit practitioners and in-house audit staff;

• Review the Company’s quarterly financial statements and the audited annual financial statements and related

notes, and external auditors’ report, and the formal announcements relating thereto, and recommend the same

for approval to the Board;

• Review material Interested Persons Transactions;

• Review the adequacy of the Company’s and Group’s internal financial controls as well as operational and

compliance controls and systems;

• Consider any whistle-blower reports;

• Review and approve the annual internal audit plan.

The AC would commission and review the findings of internal investigations into matters where there is any suspected

fraud or irregularity, or failure of internal controls or infringement of any applicable law, rule or regulation which has,

or is likely to, have a material impact on the Group’s operating results and/or financial position.

The AC has full access to Management and also full discretion to invite any Director or key management to attend

meetings of the AC, and has been given reasonable resources to discharge its functions. The AC meets with the external

and internal Auditors, without the presence of Management, at least once a year, and has obtained assurances that

Management has co-operated fully in providing the auditors with such information as they required in the conduct

of their audits.

During the year, the AC, on behalf of the Board, has reviewed the effectiveness of the Group’s material internal controls,

including financial, operational and compliance controls.

The Company’s internal audit function is outsourced to professional accounting firms. The Internal Auditor (the “IA”)

reports directly to the Chairman of the AC and administratively to the Group CFO. The IA has appropriate standing

within the Company and meets the standards of the Professional Practice of Internal Auditing set by the Institute of

the Internal Auditors.

The Company has put in place a whistle-blowing policy and procedures, endorsed by the AC, where employees

of the Company may, in confidence, raise concerns about possible corporate improprieties in matters of financial

reporting or other matters and to ensure that arrangements are in place for the independent investigations of such

matters and for appropriate follow-up action.


CORPORATEGOVERNANCE

External Auditors

The Board is responsible for the initial appointment of external Auditors and Shareholders then approve the appointment

at the Annual General Meeting. The Audit Committee evaluates the external Auditors’ performance, quality of their

audit and their independence and recommends their appointment to the Board. The Company’s external Auditors

are KPMG Singapore and the Company complies with Rules 712 and 715 of the Listing Manual of the SGX-ST.

KPMG rotated the audit engagement partner for the audit of the financial statements for FY2012 to enhance the

independence of the audit.

The amount of fees for audit services for the financial year ended 31 March 2012 provided by KPMG Singapore

and its overseas member firms totalled approximately $724,000 whilst fees for non-audit services amounted to

approximately $66,000. The AC has satisfied itself with the independence and objectivity of the external Auditors in

carrying out their audit of the financial statements for the financial year ended 31 March 2012, having reviewed the

volume of non-audit services provided by the external Auditors and also having received written confirmation from

the Auditors of their independence.

Risk Management

The Board has overall responsibility for the oversight of material risks in the Group’s business. The Board is assisted

by a Risk Management Committee (“RMC”) which comprises four Non-Executive Directors, two of whom are

Independent Directors:

Mr Mak Lye Mun (Chairman)

Mr Ong Tiew Siam

Mr Tan Chok Kian


The RMC identifies and reviews significant risks to the Group, and oversees the Group’s risk management practices

and procedures to ensure the overall effectiveness of risk identification, management, monitoring, and compliance

with internal guidelines and/or external requirements. The RMC meets at least twice a year, and had met twice in

FY2012, and as it deems necessary in discharging its duties and carrying out its functions of:

• Overseeing the development and improvement of the group-wide risk management processes and approving

risk policies and the Enterprise Risk Management framework;

• Reviewing at high level the major types of risk faced by the Group and the current and future strategies necessary

to manage them. The various matters and high-level enterprise risk that the Committee would review from

time to time include, inter alia, capital allocation risks; key business, project management and operational risks

including, risk relating to inventory, loss of key customers, suppliers, key staff, reputation, health and safety

issue, country of operations, etc, and financial risks including interest rate, foreign exchange, liquidity, tax and

market risk; and

• Monitoring a portfolio view of risks and the adequacy of management’s responses for managing risk, including

the mitigating actions being taken to reduce the key risks.

Management regularly reviews the Group’s businesses and operational activities to identify areas of significant business

risks as well as appropriate measures to control and mitigates these risks within the Group’s policies and strategies.


CORPORATEGOVERNANCE

Communication with Shareholders

The Company is committed to regular and proactive communications with its shareholders in line with continuous

disclosure obligations of the Company according to the Listing Manual of the SGX-ST. Pertinent information will be

disclosed to shareholders in a timely and equitable manner.

The announcement of results is published through the SGXNET and news releases. Information on the Company’s

new initiatives is first disseminated via SGXNET and may be followed by a news release. The quarterly financial results

and annual report are announced or issued within the relevant mandatory periods. All announcements and news

releases can also be found on the Company’s website at www.tathong.com.sg.

The Company holds formal and informal media and analysts briefings for the Company’s half-year and full-year

financial results or as and when the need arises.

All shareholders of the Company receive the annual report, circulars and notices of Annual General Meeting (the

“AGM”). The notices are also advertised in a local newspaper. The Directors including the respective Chairman of the

AC, NC and the RC, and Senior Management, are in attendance at AGMs to address queries and concerns relating

to the Company’s affairs and the work of the various committees. The external Auditors are in attendance to assist

the Directors in addressing shareholders’ queries that are related to the conduct of the audit or the Auditors’ reports.

DEALINGS IN SECURITIES

The Group has adopted an internal code of conduct on dealings in securities of the Company by Directors, Management

staff and employees in possession of confidential information. The Group’s Directors and affected employees are

prohibited from dealing in securities of the Company while in possession of price-sensitive information or during an

embargo period surrounding the issue of the Company’s financial results, including during the period commencing

two weeks before the announcement of the Company’s financial statements for each of the first three quarters of the

financial year and during the period commencing one month before the announcement of the financial statements

for the financial year, and ending on the date of the announcement of the relevant results. The Company’s internal

compliance code requires that the officer should not deal in his company’s securities on short term considerations.

This internal code is modelled on the Best Practices Guide and has been disseminated to Directors and affected

employees. A copy of the code on dealings in securities is also issued to new affected employees when they join

the Company.

POLICY ON INTERESTED PERSONS TRANSACTIONS

The Company has adopted a policy in respect of any transaction with Interested Persons and has procedures

established for the review and approval of the Company’s Interested Persons Transactions to ensure that they are

carried out on normal commercial terms or entered into on an arm’s length basis.

The Company also adopts the materiality thresholds imposed under Chapter 9 of the Listing Manual of SGX-ST

to announce such transactions, or to announce and convene separate General Meetings as and when potential

transactions with the Interested Persons arise, to seek shareholders’ prior approval for these transactions.

Save as disclosed below, there are no Interested Persons Transactions between the Company or its subsidiaries and

any of its interested persons during the financial year under review.


CORPORATEGOVERNANCE

Name of Interested Person

Aggregate value of all Interested Person Transactions during

the financial year under review (excluding transactions

less than S$100,000 and transactions conducted

under shareholders’ mandate pursuant to Rule 920)

Aggregate value of all Interested Person Transactions conducted

under the shareholders’ mandate pursuant to Rule 920

(excluding transactions less than S$100,000)

Group 12 months ended

Group 12 months ended

31March 2012

S$’000

31 March 2011

S$’000

31 March 2012

S$’000

31 March 2011

S$’000

(A) Sales

CS Construction & Geotechnic Pte Ltd – – 832 –

CS Bored Pile System Pte Ltd – – 6,747 1500

THL Foundation Equipment Pte Ltd – – 260 429

L&M Foundation Specialist Pte Ltd – – – 4,144

Double Wong Foundation Pte Ltd – – – 2,130

CMC Construction Pte Ltd – – 1,250 –

(B) Purchases

L&M Foundation Specialist Pte Ltd – – 720 –

CS Bored Pile System Pte Ltd – – 415 –

CS Construction & Geotechnic Pte Ltd – – 100 –

CMC Construction Pte Ptd – – 460 –

MATERIAL CONTRACTS

There are no material contracts of the Group or its subsidiaries involving the interests of any Director or controlling

shareholder subsisting at the end of the financial year ended 31 March 2012 other than those that have been

announced via SGXNET.


DIRECTORS’REPORT Year ended 31 March 2012

We are pleased to submit this annual report to the members of the Company together with the audited financial

statements for the financial year ended 31 March 2012.

DIRECTORS

The directors in office at the date of this report are as follows:

Tan Chok Kian

Ng San Tiong Roland

Ng Sun Ho Tony

Ng Sang Kuey Michael

Ong Tiew Siam

Ng San Wee David

Leong Horn Kee

Mak Lye Mun

Low Seow Juan

Tse Po Shing Andy

DIRECTORS’ INTERESTS

According to the register kept by the Company for the purposes of Section 164 of the Companies Act, Chapter 50,

particulars of interests of directors who held office at the end of the financial year (including those held by their spouses

and infant children) in shares, share options and warrants in the Company and related corporations are as follows:

Name of director and corporationin which interests are held

Number of shares held at beginning of

the year

Number of shares held at end of

the year

Tan Chok Kian

The Company

- ordinary shares

- interests held 784,000 784,000

- warrants


- share options


Ng San Tiong Roland

The Company

- ordinary shares

- interests held 8,959,345 9,540,345

- deemed interests 247,573,160 253,511,160

- warrants




DIRECTORS’REPORT Year ended 31 March 2012

DIRECTORS’ INTERESTS (CONT’D)


Number of shares held at beginning of

the year

Number of shares held at end of

the year

Chwee Cheng & Sons Pte Ltd *

- ordinary shares

- interests held 1,583,022 1,583,022


Ng Sun Ho Tony

The Company

- ordinary shares

- interests held 6,138,630 6,138,630


- warrants




- ordinary shares

- interests held 1,376,230 1,376,230


Ng Sang Kuey Michael

The Company

- ordinary shares

- interests held 4,345,350 4,345,350

- warrants



- ordinary shares


Ong Tiew Siam

The Company

- ordinary shares

- interests held 2,617,000 2,617,000

- warrants


- share options


* Immediate and ultimate holding company




Number of sharesheld at beginning of

the year

Number of sharesheld at end of

the year

Ng San Wee David

The Company

- ordinary shares

- interests held 2,961,250 2,961,250


- warrants




- ordinary shares



Leong Horn Kee

The Company

- ordinary shares


- warrants


- share options


Mak Lye Mun

The Company

- share options


Low Seow Juan

The Company

- ordinary shares


- share options


* Immediate and ultimate holding company

Year ended 31 March 2012

DIRECTORS’REPORT



Except as disclosed in this report, no director who held office at the end of the financial year had interests in shares

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.

There were no changes in any of the above mentioned interests in the Company between the end of the financial

year and 21 April 2012.

Except as disclosed in this report, neither at the end of, nor at any time during the financial year, was the Company a

party to any arrangements whose objects are, or one of whose objects is, to enable the directors of the Company to

acquire benefits by means of the acquisition of shares in or debentures of the Company or any other body corporate.

In the normal course of business, the Company and its related corporations entered into transactions with companies

in which directors have substantial interests as disclosed in note 29 to the financial statements. However, the directors

have neither received nor become entitled to receive any benefit arising out of these transactions other than those

to which they are ordinarily entitled to as shareholders of these companies.

Except as disclosed above and in the notes to the financial statements, since the end of the last financial year, no

director has received or become entitled to receive, a benefit by reason of a contract made by the Company or a

related corporation with the director or with a firm of which he is a member or with a company in which he has a

substantial financial interest.

SHARE OPTIONS

Tat Hong Employee Share Option Scheme 2006 and Performance Share Plan

The Tat Hong Employee Share Option Scheme 2006 (“ESOS 2006”) and Performance Share Plan (“PSP”) were

approved by the Company at its Extraordinary General Meeting on 8 December 2006. The ESOS 2006 and PSP are

administered by the Shares Option/Performance Shares Plan Committee, comprising four directors, Mak Lye Mun

(Chairman), Ng San Tiong, Ng Sun Ho and Ong Tiew Siam.

Other information regarding the ESOS 2006 and PSP are set out as follows:

- the Board of the Company may specify the vesting conditions which must be satisfied or waived by the Board

before options and awards allocated under the ESOS 2006 and PSP may be dealt with;

- the exercise price for each share in respect of which an option is exercisable shall be a price equal to the

market price;

- the options can be exercised 1 year after the grant; and

- the options granted expire after 5 years for non-executive directors and 10 years for the employees of the

Company and its subsidiaries.


DIRECTORS’REPORT


SHARE OPTIONS (CONT’D)

Tat Hong Employee Share Option Scheme 2006 and Performance Share Plan (cont’d)

At the end of the financial year, details of the options granted under the Scheme on the unissued ordinary shares of

the Company, are as follows:

Date ofgrant ofoptions

Exerciseprice

per share

Optionsoutstanding at

1 April 2011

Optionsexercised/ forfeited

Optionsoutstandingat 31 March

2012

Numberof optionholders at

31 March 2012Exerciseperiod

30 September 2009 1.08 3,920,000 (405,000) 3,515,000 73 1 October 2010 –

30 September 2020

30 September 2009 1.08 400,000 – 400,000 4 1 October 2010 –

30 September 2015

4,320,000 (405,000) 3,915,000

Details of options granted to directors of the Company under the Scheme are as follows:

Name of director

Options grantedfor financialyear ended

31 March 2012

Aggregateoptions

granted sincecommencement

of Scheme to31 March 2012

Aggregateoptions

exercised sincecommencement


Aggregateoptions

outstandingas at

31 March 2012

Ong Tiew Siam – 200,000 – 200,000

Tan Chok Kian – 100,000 – 100,000

Leong Horn Kee – 100,000 – 100,000

Low Seow Juan – 100,000 – 100,000

Mak Lye Mun – 100,000 – 100,000

Since the commencement of the Scheme, no options have been granted to the controlling shareholders of the

Company or their associates and no participant under the Scheme has been granted 5% or more of the total options

available under the Scheme.

The options granted by the Company do not entitle the holders of the options, by virtue of such holdings, to any rights

to participate in any share issue of any other company.

No award of shares have been granted under the PSP since its commencement to 31 March 2012.

WARRANTS

On 8 August 2008, the Company issued 50,662,672 warrants to be traded separately on the Singapore Exchange

Securities Trading Limited for no consideration. Each warrant can be converted into 1 new ordinary share in the share

capital of the Company at $2.50 each for cash, to be exercised at any time after the 6 months upon the listing of the

warrants, i.e. commencing 8 February 2009. The warrants expire on 2 August 2013.

Except as disclosed above, there were no other unissued shares of the Company or its subsidiaries under options

granted by the Company or its subsidiaries as at the end of the financial year.


DIRECTORS’REPORT


AUDIT COMMITTEE

The members of the Audit Committee during the year and at the date of this report are as follows:

• Leong Horn Kee (Chairman)

• Tan Chok Kian

• Low Seow Juan

• Tse Po Shing Andy

The Audit Committee performs the functions specified by section 201B of the Companies Act, Chapter 50, the SGX

Listing Manual and the Code of Corporate Governance.

The Audit Committee held four meetings during the year. In performing its functions, the Audit Committee met with

the Company’s external and internal auditors to discuss the scope of their work and the results of their examination

and evaluation of the Company’s system of internal accounting controls.

The Audit Committee also reviewed the following:

• assistance provided by the Company’s officers to the internal and external auditors;

• quarterly financial information and annual financial statements of the Group and of the Company prior to their

submission to the directors of the Company for adoption; and

• interested person transactions (as defined in Chapter 9 of the SGX Listing Manual).

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

It has full authority and discretion to invite any director or executive officer to attend its meetings.

The Audit Committee also recommends the appointment of the external auditors and reviews the level of audit and

non-audit fees.

The Audit Committee has reviewed the independence of the external auditors and determined that the external

auditors were independent in carrying out the audit of the financial statements.

The Audit Committee has recommended to the Board of Directors that the auditors, KPMG LLP, be nominated for

re-appointment as auditors at the forthcoming Annual General Meeting of the Company.


DIRECTORS’REPORT


AUDITORS

The auditors, KPMG LLP, have indicated their willingness to accept re-appointment.

On behalf of the Board of Directors

Tan Chok Kian

Chairman

Ng San Tiong

Director

28 May 2012


DIRECTORS’REPORT


STATEMENT BY DIRECTORS

In our opinion:

(a) the financial statements set out on pages 54 to 128 are drawn up so as to give a true and fair view of the state of

affairs of the Group and of the Company as at 31 March 2012 and the results, changes in equity and cash flows

of the Group for the year ended on that date in accordance with the provisions of the Singapore Companies

Act, Chapter 50 and Singapore Financial Reporting Standards; and

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

debts as and when they fall due.

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

On behalf of the Board of Directors

Tan Chok Kian

Chairman

Ng San Tiong

Director

28 May 2012



INDEPENDENT AUDITORS’ REPORT

We have audited the accompanying financial statements of Tat Hong Holdings Ltd (the “Company”) and its subsidiaries (the “Group”), which comprise the statements of financial position of the Group and the Company as at 31 March 2012, the income statement, statement of comprehensive income, statement of changes in equity and statement of cash flows of the Group for the year then ended, and a summary of significant accounting policies and other explanatory information, as set out on pages 54 to 128.

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.

AUDITORS’ 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 judgement, 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.

OPINION

In our opinion, the consolidated financial statements of the Group and the statement of financial position of the Company are properly drawn up in accordance with the provisions of the Act and Singapore Financial Reporting Standards to give a true and fair view of the state of affairs of the Group and of the Company as at 31 March 2012 and the results, changes in equity and cash flows of the Group 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.

KPMG LLPPublic Accountants andCertified Public Accountants

Singapore28 May 2012

Members of the Company Tat Hong Holdings Ltd


Group CompanyNote 2012 2011 2012 2011

$’000 $’000 $’000 $’000

Assets

Property, plant and equipment 4 765,487 623,625 11 13

Subsidiaries 5 – – 230,073 182,756

Associates 6 63,385 60,549 27,451 27,392

Joint ventures 7 2,279 6,176 2,309 5,324

Other financial assets 8 115 201 – –

Deferred tax assets 9 6,319 6,581 – –

Intangible assets 10 49,704 49,044 – –

Non-current assets 887,289 746,176 259,844 215,485

Inventories 11 234,191 200,821 – –

Trade and other receivables 12 184,818 145,445 76,043 119,964

Cash and cash equivalents 13 76,770 61,813 309 418

Current assets 495,779 408,079 76,352 120,382

Total assets 1,383,068 1,154,255 336,196 335,867

Equity

Share capital 14 252,860 252,860 252,860 252,860

Reserves 15 303,537 265,995 40,205 35,688

Equity attributable to owners

of the Company 556,397 518,855 293,065 288,548

Non-controlling interests 41,792 53,024 – –

Total equity 598,189 571,879 293,065 288,548

Liabilities

Trade and other payables 16 1,719 1,517 – –

Financial liabilities 17 282,440 244,532 31,110 28,386

Deferred tax liabilities 9 18,113 14,275 – –

Non-current liabilities 302,272 260,324 31,110 28,386

Trade and other payables 16 298,070 149,252 3,422 2,682

Financial liabilities 17 173,515 164,898 8,500 16,000

Current tax payable 11,022 7,902 99 251

Current liabilities 482,607 322,052 12,021 18,933

Total liabilities 784,879 582,376 43,131 47,319

Total equity and liabilities 1,383,068 1,154,255 336,196 335,867

The accompanying notes form an integral part of these financial statements.

STATEMENTS OF FINANCIAL POSITION As at 31 March 2012


CONSOLIDATED INCOME STATEMENT

Note 2012 2011$’000 $’000

Revenue 19 719,758 584,188

Cost of sales (456,739) (375,676)

Gross profit 263,019 208,512

Other operating income 21 8,729 14,833

Distribution expenses (20,212) (13,203)

Administrative expenses (14,579) (13,692)

Other operating expenses (157,914) (137,561)

Results from operating activities 79,043 58,889

Finance expense 20 (22,464) (19,111)

56,579 39,778

Share of profits of associates (net of tax) 3,832 1,347

Share of losses of joint ventures (net of tax) (2,427) (568)

Profit before income tax 21 57,984 40,557

Income tax expense 22 (21,538) (8,896)

Profit for the year 36,446 31,661

Attributable to:

Owners of the Company 42,257 25,957

Non-controlling interests (5,811) 5,704


Earnings per share

Basic earnings per share (cents) 23(a) 7.42 4.56

Diluted earnings per share (cents) 23(b) 7.42 4.56




CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

2012 2011$’000 $’000


Other comprehensive income

Net gain/(loss) on translation of net investment in foreign entities 6,656 (7,373)

Other comprehensive income for the year, net of income tax 6,656 (7,373)

Total comprehensive income for the year 43,102 24,288

Attributable to:

Owners of the Company 45,802 20,793

Non-controlling interests (2,700) 3,495

Total comprehensive income for the year 43,102 24,288




CONSOLIDATED STATEMENTOF CHANGES IN EQUITY

NoteSharecapital

Reserve for ownshares

Share optionreserve

Capital reserves

Currency translation

reserveAccumulated

profits

Total attributable to owners

of the Company

Non-controlling interests

Total equity

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

At 1 April 2010 252,860 (1,780) 711 12,856 4,735 229,184 498,566 94,777 593,343

Total comprehensive

income for the year

Profit for the year – – – – – 25,957 25,957 5,704 31,661

Other comprehensive

income

Net loss on translation

of net investment in

foreign entities – – – (101) (5,063) – (5,164) (2,209) (7,373)

Total other

comprehensive income – – – (101) (5,063) – (5,164) (2,209) (7,373)

Total comprehensive

income for the year – – – (101) (5,063) 25,957 20,793 3,495 24,288

Transactions with

owners of the

Company, recognised

directly in equity

Contributions by

and distributions

to owners of the

Company

Value of employee

services received for

issue of share options – – 646 – – – 646 – 646

Capital injection by non-

controlling interest – – – – – – – 13,273 13,273

Dividends 25 – – – – – (14,241) (14,241) (1,214) (15,455)

Total contributions by and

distributions to owners

of the Company – – 646 – – (14,241) (13,595) 12,059 (1,536)

Changes in ownership

interests in

subsidiaries

Acquisition of non-

controlling interests

without changes

in control – – – 10,769 2,610 – 13,379 (61,546) (48,167)

Dilution of interest in

subsidiary – – – (288) – – (288) 341 53

Acquisition of controlling

interests – – – – – – – 3,898 3,898

Total changes in

ownership interests in

subsidiaries – – – 10,481 2,610 – 13,091 (57,307) (44,216)

Transfer to reserves – – – 563 – (563) – – –

At 31 March 2011 252,860 (1,780) 1,357 23,799 2,282 240,337 518,855 53,024 571,879




CONSOLIDATED STATEMENTOF CHANGES IN EQUITY

NoteSharecapital

Reserve for ownshares

Share optionreserve

Capital reserves

Currency translation

reserveAccumulated

profits

Total attributable to owners of the Company

Non-controlling interests

Total equity

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

At 1 April 2011 252,860 (1,780) 1,357 23,799 2,282 240,337 518,855 53,024 571,879

Total comprehensive

income for the year

Profit/(Loss) for the year – – – – – 42,257 42,257 (5,811) 36,446

Other comprehensive

income

Net gain on translation

of net investment in

foreign entities – – – 76 3,469 – 3,545 3,111 6,656

Total other

comprehensive income – – – 76 3,469 – 3,545 3,111 6,656

Total comprehensive

income for the year – – – 76 3,469 42,257 45,802 (2,700) 43,102

Transactions with

owners of the

Company, recognised

directly in equity

Contributions by

and distributions

to owners of the

Company

Capital injection by non-

controlling interest – – – – – – – 6,957 6,957

Dividends 25 – – – – – (8,546) (8,546) (90) (8,636)

Total contributions by and

distributions to owners

of the Company – – – – – (8,546) (8,546) 6,867 (1,679)

Changes in ownership

interests in

subsidiaries

Acquisition of non-

controlling interests

without changes in

control – – – (263) 781 – 518 (15,631) (15,113)

Dilution of interest in

subsidiaries – – – (232) – – (232) 232 –

Total changes in

ownership interests in

subsidiaries – – – (495) 781 – 286 (15,399) (15,113)

Transfer to reserves – – – 409 – (409) – – –

At 31 March 2012 252,860 (1,780) 1,357 23,789 6,532 273,639 556,397 41,792 598,189




Note 2012 2011$’000 $’000

Operating activities


Adjustments for:

Inventory written off 65 2,021

Impairment loss on property, plant and equipment – 4,053

Impairment loss on intangible assets 160 4,916

Bargain purchase gain arising from acquisition of a subsidiary (760) (1,395)

Depreciation of property, plant and equipment 68,955 58,422

Loss/(Gain) on disposal of property, plant and equipment 11,759 (3,243)

Loss on disposal of intangible asset 14 –

Property, plant and equipment written off 96 137

Amortisation of intangible assets 632 885

Cost of long service and annual leave 4,472 4,416

Insurance claim recovered (2,857) (5,385)

Share of profits of associates (3,832) (1,347)

Share of losses of joint ventures 2,427 568

Loss on fair value adjustment on derivatives 274 70

Provisions made/(reversed) net 563 (265)

Value of employee services received for issue of share options – 646

Interest income (1,396) (1,654)

Finance expense 22,464 19,111

Income tax expense 21,538 8,896

Operating profit before working capital changes 161,020 122,513

Changes in working capital:

Inventories (132,262) (54,592)

Trade and other receivables (33,364) (23,221)

Trade and other payables 124,216 (19,872)

Cash generated from operations 119,610 24,828

Income taxes paid (11,954) (8,500)

Payment for long service and annual leave and others (3,823) (3,524)

Net cash from operating activities 103,833 12,804


CONSOLIDATEDSTATEMENT OF CASH FLOWS



Note 2012 2011$’000 $’000

Investing activities

Purchase of property, plant and equipment (125,919) (79,289)

Purchase of intangible assets (1,003) (640)

Proceeds from disposal of property, plant and equipment 43,639 27,224

Investments in associates (195) (143)

Acquisition of subsidiaries 24 3,477 (5,520)

Interest received 1,390 1,649

Dividends received from associates 439 990

Dividends received from joint ventures 1,925 1,367

Non-trade amounts due from related parties (2,547) (2,820)

Net cash used in investing activities (78,794) (57,182)

Financing activities

Proceeds from/(Repayment of) trust receipts 17,139 (11,782)

Purchase of non-controlling interest in subsidiaries (15,113) (48,167)

Proceeds from bank loans 68,542 211,049

Repayment of bank loans (71,316) (39,806)

Capital injection by non-controlling interests 6,957 5,188

Loan to an associate – (750)

Repayment of loans by associates 29 570

Repayment of loans by joint ventures 305 250

Proceeds from finance lease obligations 80,197 29,780

Repayment of finance lease obligations (66,001) (81,145)

Interest paid (22,316) (19,125)

Dividends paid to non-controlling interests (90) (1,214)

Dividends paid (8,546) (14,241)

Fixed deposit earmarked for certain banking facilities (2,212) (374)

Net cash (used in)/from financing activities (12,425) 30,233

Net increase/(decrease) in cash and cash equivalents 12,614 (14,145)

Cash and cash equivalents at beginning of the year 53,975 69,334

Effect of exchange rate fluctuations on cash held 227 (1,214)

Cash and cash equivalents at end of the year 13 66,816 53,975

During the year ended 31 March 2012, the Group acquired property, plant and equipment with an aggregate cost of

$158,175,000 (2011: $118,985,000) of which $32,256,000 (2011: $31,611,000) was acquired by means of finance

leases. In addition, property, plant and equipment of $99,237,000 (2011: $52,616,000) was reclassified from inventories

during the financial year, of which $80,197,000 (2011: $29,780,000) was financed by means of finance leases.

During the year ended 31 March 2011, non-controlling interests of a subsidiary injected capital into that subsidiary

in the form of property, plant and equipment at a fair value of $8,085,000.


CONSOLIDATEDSTATEMENT OF CASH FLOWS




NOTESTO THE FINANCIAL STATEMENTS

These notes form an integral part of the financial statements.

The financial statements were authorised for issue by the Board of Directors on 28 May 2012.

1 DOMICILE AND ACTIVITIES

Tat Hong Holdings Ltd (the Company) is incorporated in the Republic of Singapore and has its registered office

at 18 Sungei Kadut Avenue, Singapore 729489.

The principal activities of the Company are those relating to investment holding. The principal activities of the

subsidiaries are set out in note 5 below.

The immediate and ultimate holding company is Chwee Cheng & Sons Pte Ltd, a company incorporated in the

Republic of Singapore.

The consolidated financial statements relate to the Company and its subsidiaries (together referred to as the

Group) and the Group’s interest in associates and joint ventures.

2 BASIS OF PREPARATION

2.1 Statement of compliance

The financial statements have been prepared in accordance with the Singapore Financial Reporting

Standards (FRS).

2.2 Basis of measurement

The financial statements have been prepared on the historical cost basis except for the following material items

in the statement of financial position:

• derivative financial instruments are measured at fair value; and

• financial instruments at fair value through profit or loss are measured at fair value.

2.3 Functional and presentation currency

The financial statements are presented in Singapore dollars which is the Company’s functional currency. All financial

information presented in Singapore dollars has been rounded to the nearest thousand, unless otherwise stated.

2.4 Use of estimates and judgements

The preparation of the financial statements in conformity with FRSs requires management to make judgements,

estimates and assumptions that affect the application of accounting policies and the reported amounts of assets,

liabilities, income and expenses. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates

are recognised in the period in which the estimates are revised and in any future periods affected.




2 BASIS OF PREPARATION (CONT’D)

2.4 Use of estimates and judgements

Information about assumptions and estimation uncertainties that have a significant risk of resulting in a material

adjustment within the next financial year are included in the following notes:

• Note 4 – useful life and residual values of property, plant and equipment;

• Note 6 – impairment losses on investment in associates;

• Note 7 – impairment losses on investment in joint ventures;

• Note 10 – assumptions of recoverable amounts relating to goodwill impairment;

• Note 22 – income taxes;

• Note 24 – valuation of assets, liabilities and contingent liabilities acquired in business combinations;

and

• Note 26 – valuation of financial instruments.

2.5 Changes in accounting policies

(i) Measurements of non-controlling interests in business combinations

From 1 April 2011, the Group has applied the improvements to FRS 103 Business Combinations resulting

from the Improvements to FRSs 2010 in measuring at the acquisition date, non-controlling interests

that do not present ownership interests and do not entitle their holders to a proportionate share of the

acquiree’s net assets in the event of liquidation. Such non-controlling interests are now measured at fair

value (see note 3.1).

Previously, the Group has elected on a transaction-by-transaction basis whether to measure non-controlling

interests that are not present ownership interests and do not entitle holders to proportionate shares of the

acquirees’ net assets on liquidation at fair value, or at the non-controlling interests’ proportionate share of

the recognised amounts of the acquiree’s identifiable net assets, at the acquisition date.

This change in accounting policy has been applied prospectively to new business combinations occurring

on or after 1 April 2011 and has no material impact on earnings per share.

(ii) Identification of related party relationships and related party disclosures

From 1 April 2011, the Group has applied the revised FRS 24 Related Party Disclosures (2010) to identify

parties that are related to the Group and to determine the disclosures to be made on transactions and

outstanding balances, including commitments, between the Group and its related parties. FRS 24 (2010)

improved the definition of a related party in order to eliminate inconsistencies and ensure symmetrical

identification of relationships between two parties.

The adoption of FRS 24 (2010) affects only the disclosures made in the financial statements. There is no

financial effect on the results and financial position of the Group for the current and previous financial

years. Accordingly, the adoption of FRS 24 (2010) has no impact on earnings per share.




3 SIGNIFICANT ACCOUNTING POLICIES

The accounting policies set out below have been applied consistently to all periods presented in these financial

statements, and have been applied consistently by Group entities, except as explained in note 2.5 which

addresses changes in accounting policies.

3.1 Basis of consolidation

Business combinations

Business combinations are accounted for using the acquisition method at the acquisition date, which is the date

on which control is transferred to the Group. Control is the power to govern the financial and operating policies

of an entity so as to obtain benefits from its activities. In assessing control, the Group takes into consideration

potential voting rights that are currently exercisable.

The consideration transferred does not include amounts related to the settlement of pre-existing relationships.

Such amounts are generally recognised in profit or loss.

Costs related to the acquisition, other than those associated with the issue of debt or equity securities, that the

Group incurs in connection with a business combination are expensed as incurred.

Any contingent consideration payable is recognised at fair value at the acquisition date. If the contingent

consideration is classified as equity, it is not remeasured and settlement is accounted for within equity. Otherwise,

subsequent changes to the fair value of the contingent consideration are recognised in profit or loss.

For non-controlling interests that are present ownership interests and entitle their holders to a proportionate

share of the acquiree’s net assets in the event of liquidation, the Group elects on a transaction-by-transaction

basis whether to measure them at fair value, or at the non-controlling interests’ proportionate share of the

recognised amounts of the acquiree’s identifiable net assets, at the acquisition date. All non-controlling interests

are measured at acquisition-date at fair value or, when applicable, on the basis specified in another standard.

When share-based payment awards (replacement awards) are required to be exchanged for awards held by

the acquiree’s employees (acquiree’s awards) and relate to past services, then all or a portion of the amount

of the acquirer’s replacement awards is included in measuring the consideration transferred in the business

combination. This determination is based on the market-based value of the replacement awards compared

with the market-based value of the acquiree’s awards and the extent to which the replacement awards relate

to past and/or future service.

Subsidiaries

Subsidiaries are entities controlled by the Group. Control exists when the Group has the power to govern the

financial and operating policies of an entity so as to obtain benefits from its activities. In assessing control,

potential voting rights presently exercisable are taken into account. The financial statements of subsidiaries

are included in the consolidated financial statements from the date that control commences until the date that

control ceases. The accounting policies of subsidiaries have been changed where necessary to align them with

the policies adopted by the Group.




3 SIGNIFICANT ACCOUNTING POLICIES (CONT’D)

3.1 Basis of consolidation (cont’d)

Associates and jointly controlled entities

Associates are those entities in which the Group has significant influence, but not control, over their financial

and operating policies. Significant influence is presumed to exist when the Group holds between 20% and

50% of the voting power of another entity. Joint ventures are those entities over whose activities the Group

has joint control, established by contractual agreement and requiring unanimous consent for strategic financial

and operating decisions.

Investments in associates and joint ventures (collectively referred to as “equity-accounted investees”) are accounted

for using the equity method. The consolidated financial statements include the Group’s share of profit or loss

and other comprehensive income of the equity-accounted investees, after adjustments to align the accounting

policies with those of the Group, from the date that significant influence or joint control commences until the

date that significant influence or joint control ceases. When the Group’s share of losses exceeds its interest

in an equity-accounted investee, the carrying amount of that interest, including any long-term investments, is

reduced to zero, and the recognition of further losses is discontinued except to the extent that the Group has

an obligation or has made payments on behalf of the investee.

Acquisitions of non-controlling interests

Acquisitions of non-controlling interests are accounted for as transactions with owners in their capacity as owners

and therefore the carrying amounts of assets and liabilities are not changed and goodwill is not recognised as a

result of such transactions. The adjustments to non-controlling interests are based on a proportionate amount

of the net assets of the subsidiary. Any difference between the adjustment to non-controlling interests and the

fair value of consideration paid is recognised directly in equity and presented as part of equity attributable to

owners of the Company.

Transactions eliminated on consolidation

Intra-group balances and transactions, and any unrealised income or expenses arising from intra-group

transactions, are eliminated in preparing the consolidated financial statements. Unrealised gains arising from

transactions with associates and joint ventures are eliminated against the investment to the extent of the Group’s

interest in the investee. Unrealised losses are eliminated in the same way as unrealised gains, but only to the

extent that there is no evidence of impairment.

Accounting for subsidiaries, and associates and jointly controlled ventures

Investments in subsidiaries, associates and joint ventures are stated in the Company’s statement of financial

position at cost less accumulated impairment losses.





3.2 Foreign currency

Foreign currency transactions

Transactions in foreign currencies are translated at the respective functional currencies of Group entities at

exchange rates at the date of the transactions. Monetary assets and liabilities denominated in foreign currencies

at the reporting date are retranslated to the functional currency at the exchange rate at the reporting date. The

foreign currency gain or loss on monetary items is the difference between amortised cost in the functional

currency at the beginning of the year, adjusted for effective interest and payments during the year, and the

amortised cost in foreign currency translated at the exchange rate at the end of the year.

Non-monetary assets and liabilities denominated in foreign currencies that are measured at fair value are

retranslated to the functional currency at the exchange rate at the date that the fair value was determined.

Non-monetary items in a foreign currency that are measured in terms of historical cost are translated using the

exchange rate at the date of the transaction. Foreign currency differences arising on retranslation are recognised

in profit or loss, except for differences arising on the retranslation of available-for-sale equity instruments, a

financial liability designated as a hedge of the net investment in a foreign operation that is effective, or qualifying

cash flow hedges, which are recognised in other comprehensive income.

Foreign operations

The assets and liabilities of foreign operations, excluding goodwill and fair value adjustments arising on

acquisition, are translated to Singapore dollars at exchange rates at the end of the reporting period. The income

and expenses of foreign operations, excluding foreign operations in hyperinflationary economies, are translated

to Singapore dollars at exchange rates at the dates of the transactions. Goodwill and fair value adjustments

arising on the acquisition of a foreign operation on or after 1 April 2005 are treated as assets and liabilities of

the foreign operation and translated at the closing rate. For acquisitions prior to 1 April 2005, the exchange

rates at the date of acquisition were used.

Foreign currency differences are recognised in other comprehensive income, and presented in the foreign

currency translation reserve (translation reserve) in equity. However, if the foreign operation is a non-wholly-

owned subsidiary, then the relevant proportionate share of the translation difference is allocated to the non-

controlling interests. When a foreign operation is disposed of such that control, significant influence or joint

control is lost, the cumulative amount in the translation reserve related to that foreign operation is reclassified

to profit or loss as part of the gain or loss on disposal. When the Group disposes of only part of its interest in

a subsidiary that includes a foreign operation while retaining control, the relevant proportion of the cumulative

amount is reattributed to non-controlling interests. When the Group disposes of only part of its investment in

an associate that includes a foreign operation while retaining significant influence, the relevant proportion of

the cumulative amount is reclassified to profit or loss.

When the settlement of a monetary item receivable from or payable to a foreign operation is neither planned

nor likely in the foreseeable future, foreign exchange gains and losses arising from such a monetary item are

considered to form part of a net investment in a foreign operation and are recognised in other comprehensive

income, and are presented in the translation reserve in equity.





3.3 Financial instruments

Non-derivative financial assets

The Group initially recognises loans and receivables and deposits on the date that they are originated. All other

financial assets (including assets designated at fair value through profit or loss) are recognised initially on the

trade date, which is the date that the Group becomes a party to the contractual provisions of the instrument.

The Group derecognises a financial asset when the contractual rights to the cash flows from the asset expire,

or it transfers the rights to receive the contractual cash flows on the financial asset in a transaction in which

substantially all the risks and rewards of ownership of the financial asset are transferred. Any interest in transferred

financial assets that is created or retained by the Group is recognised as a separate asset or liability.

Financial assets and liabilities are offset and the net amount presented in the statement of financial position

when, and only when, the Group has a legal right to offset the amounts and intends either to settle on a net

basis or to realise the asset and settle the liability simultaneously.

The Group classifies non-derivative financial assets into the following categories: loans and receivables and

available-for-sale financial assets.

Loans and receivables

Loans and receivables are financial assets with fixed or determinable payments that are not quoted in an

active market. Such assets are recognised initially at fair value plus any directly attributable transaction costs.

Subsequent to initial recognition, loans and receivables are measured at amortised cost using the effective

interest method, less any impairment losses.

Loans and receivables comprise trade and other receivables and cash and cash equivalents.

Cash and cash equivalents comprise cash balances and bank deposits. Bank overdrafts that are repayable on

demand and form an integral part of the Group’s cash management are included as a component of cash and

cash equivalents for the purpose of the statement of cash flows.

Available-for-sale financial assets

Available-for-sale financial assets are non-derivative financial assets that are designated as available-for-sale

and that are not classified in any of the previous categories. The Group’s investments in equity securities and

certain debt securities are classified as available-for-sale financial assets. Available-for-sale financial assets are

recognised initially at fair value plus directly attributable transaction costs. Subsequent to initial recognition,

they are measured at fair value and changes therein, other than impairment losses (see note 3.7) and foreign

exchange differences on available-for-sale monetary items, are recognised in other comprehensive income and

presented in the fair value reserve in equity. When an investment is derecognised, the cumulative gain or loss

in other comprehensive income is transferred to profit or loss.

For those financial assets where there is no active market and where fair value cannot be measured reliably,

they are measured at cost.





3.3 Financial instruments (cont’d)

Non-derivative financial liabilities

The Group initially recognises debt securities issued and subordinated liabilities on the date that they are

originated. All other financial liabilities (including liabilities designated at fair value through profit or loss) are

recognised initially on the trade date, which is the date that the Group becomes a party to the contractual

provisions of the instrument.

The Group derecognises a financial liability when its contractual obligations are discharged, cancelled or expired.

Financial assets and liabilities are offset and the net amount presented in the statement of financial position

when, and only when, the Group has a legal right to offset the amounts and intends either to settle on a net

basis or to realise the asset and settle the liability simultaneously.

The Company classifies non-derivative financial liabilities into the other financial liabilities category. Such financial

liabilities are recognised initially at fair value plus any directly attributable transaction costs. Subsequent to

initial recognition, these financial liabilities are measured at amortised cost using the effective interest method.

Other financial liabilities comprise financial liabilities, and trade and other payables.

Financial guarantees

Financial guarantees are financial instruments issued by the Group that require the issuer to make specified

payments to reimburse the holder for the loss it incurs because a specified debtor fails to meet payment when

due in accordance with the original or modified terms of a debt instrument.

Financial guarantees are recognised initially at fair value. Subsequent to initial measurement, the financial

guarantees are stated at the higher of the initial fair value less cumulative amortisation and the amount that would

be recognised if they were accounted for as contingent liabilities. When the financial guarantees are terminated

before their original expiry date, the carrying amount of the financial guarantees is transferred to the profit or loss.

Share capital

Ordinary shares

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary shares

and share options are recognised as a deduction from equity, net of any tax effects.

Convertible redeemable preference share

Convertible redeemable preference share is classified as equity if it is non-redeemable, or redeemable only at

the Company’s option, and any dividends are discretionary. Dividends thereon are recognised as distributions

within equity upon approval by the Company’s shareholders.

Convertible redeemable preference share capital is classified as a financial liability if it is redeemable on a specific

date or at the option of the shareholders, or if dividend payments are not discretionary. Dividends thereon are

recognised as interest expense in profit or loss as accrued.





3.3 Financial instruments (cont’d)

Share capital (cont’d)

Repurchase of share capital (treasury shares)

When share capital recognised as equity is repurchased, the amount of the consideration paid, which includes

directly attributable costs, net of any tax effects, is recognised as a deduction from equity. Repurchased shares

are classified as treasury shares and are presented as a deduction from total equity. When treasury shares are

sold or reissued subsequently, the amount received is recognised as an increase in equity, and the resulting

surplus or deficit on the transaction is transferred to/from accumulated profits.

Distribution of non-cash assets to owners of the Company

The Group measures a liability to distribute non-cash assets as a dividend to the owners of the Company at the

fair value of the assets to be distributed. The carrying amount of the dividend is remeasured at each reporting

date and at the settlement dates with any changes recognised directly in equity as adjustments to the amount

of the distribution. On settlement of the transactions, the Group recognises the difference, if any, between the

carrying amount of the assets distributed and the carrying amount of the liability in profit or loss.

Derivative financial instruments, including hedge accounting

The Group holds derivative financial instruments to hedge its foreign currency and interest rate risk exposures.

Embedded derivatives are separated from the host contract and accounted for separately if the economic

characteristics and risks of the host contract and the embedded derivative are not closely related, a separate

instrument with the same terms as the embedded derivative would meet the definition of a derivative, and the

combined instrument is not measured at fair value through profit or loss.

Derivatives are recognised initially at fair value; attributable transaction costs are recognised in profit or loss

as incurred. Subsequent to initial recognition, derivatives are measured at fair value, and all changes in its fair

value are recognised immediately in profit or loss.

3.4 Property, plant and equipment

Recognition and measurement

Items of property, plant and equipment are measured at cost less accumulated depreciation and accumulated

impairment losses.

Cost includes expenditure that is directly attributable to the acquisition of the asset. The cost of self-constructed

assets includes the cost of materials and direct labour, any other costs directly attributable to bringing the asset

to a working condition for their intended use, the cost of dismantling and removing the items and restoring

the site on which they are located and capitalised borrowing costs. Purchased software that is integral to the

functionality of the related equipment is capitalised as part of that equipment.

When parts of an item of property, plant and equipment have different useful lives, they are accounted for as

separate items (major components) of property, plant and equipment.

The gain or loss on disposal of an item of property, plant and equipment is determined by comparing the proceeds

from disposal with the carrying amount of property, plant and equipment, and is recognised net within other

operating income/other operating expenses in profit or loss.





3.4 Property, plant and equipment (cont’d)

Subsequent costs

The cost of replacing a component of an item of property, plant and equipment is recognised in the carrying

amount of the item if it is probable that the future economic benefits embodied within the component will

flow to the Group, and its cost can be measured reliably. The carrying amount of the replaced component is

derecognised. The costs of the day-to-day servicing of property, plant and equipment are recognised in profit

or loss as incurred.

Depreciation

Depreciation is calculated over the depreciable amount, which is the cost of an asset, or other amount substituted

for cost, less its residual value.

Depreciation is recognised in profit or loss on a straight-line basis over the estimated useful lives of property,

plant and equipment, since this most closely reflects the expected pattern of consumption of the future economic

benefits embodied in the asset. Leased assets are depreciated over the shorter of the lease term and their

useful lives unless it is reasonably certain that the Group will obtain ownership by the end of the lease term.

Freehold land is not depreciated.

The estimated useful lives for the current and comparative periods are as follows:

• Leasehold properties Over the terms of the leases between 25 to 43 years

• Freehold properties 50 years

• Plant and machinery 10 to 20 years

• Furniture, fittings, office and

workshop equipments 3 to 5 years

• Motor vehicles 5 years

• Vessels 12 years

No depreciation is provided on assets under construction.

Depreciation methods, useful lives and residual values are reviewed at the end of each reporting period and

adjusted if appropriate.





3.5 Intangible assets

Goodwill

Goodwill that arises upon the acquisition of subsidiaries is included in intangible assets and represents the

excess of:

• the fair value of the consideration transferred; plus

• the recognised amount of any non-controlling interests in the acquiree; plus

• if the business combination is achieved in stages, the fair value of the existing equity interest in the acquiree,

over the net recognised amount (generally fair value) of the identifiable assets acquired and liabilities assumed.

When the excess is negative, a bargain purchase gain is recognised immediately in profit or loss.

Goodwill arising on the acquisition of subsidiaries is presented in intangible assets. Goodwill arising on the

acquisition of associates and joint ventures is presented together with investments in associates and joint ventures.

Goodwill is measured at cost less accumulated impairment losses, and tested for impairment.

Other intangible assets

Other intangible assets that are acquired by the Group and have finite useful lives are measured at cost less

accumulated amortisation and accumulated impairment losses.

Subsequent expenditure

Subsequent expenditure is capitalised only when it increases the future economic benefits embodied in the

specific asset to which it relates. All other expenditure, including expenditure on internally generated goodwill

and brands, is recognised in profit or loss as incurred.

Amortisation

Amortisation calculated over the cost of the asset, less its residual value.

Amortisation is recognised in profit or loss on a straight-line basis over the estimated useful lives of intangible

assets, other than goodwill, from the date that they are available for use, since this closely reflects the expected

pattern of consumption of the future economic benefits embodied in the assets.

The estimated useful lives for the current and comparative periods are as follows:

• Customer relationships 1 to 7 years

• Computer software 3 years

Amortisation methods, useful lives and residual values are reviewed at the end of each reporting period and

adjusted if appropriate.





3.6 Inventories

Heavy machinery, equipment and spare parts

Inventories held for resale are stated at the lower of cost (principally specific identification and weighted average

cost method) and net realisable value. Net realisable value is the estimated selling price in the ordinary course

of business less the estimated costs of completion and selling expenses.

Cost of machinery and equipment is determined on specific identification cost basis. Cost of spare parts is

calculated using weighted average cost basis.

Cost comprises all costs of purchase, costs of conversion and other costs incurred in bringing the inventories

to their present location and condition. In the case of work in progress, cost includes an appropriate share of

overheads based on normal operating capacity.

3.7 Impairment

Non-derivative financial assets

A financial asset not carried at fair value through profit or loss is assessed at each reporting date to determine

whether there is any objective evidence that it is impaired. A financial asset is impaired if objective evidence

indicates that a loss event has occurred after the initial recognition of the asset, and that the loss event had a

negative effect on the estimated future cash flows of that asset that can be estimated reliably.

Objective evidence that financial assets (including equity securities) are impaired can include default or delinquency

by a debtor, restructuring of an amount due to the Group on terms that the Group would not consider otherwise,

indications that a debtor or issuer will enter bankruptcy and the disappearance of an active market for a security.

In addition, for an investment in an equity security, a significant or prolonged decline in its fair value below its

cost is objective evidence of impairment.


The Group considers evidence of impairment for loans and receivables at both a specific asset and collective level.

All individually significant loans and receivables are assessed for specific impairment. All individually significant

loans and receivables found not to be specifically impaired are then collectively assessed for any impairment

that has been incurred but not yet identified. Loans and receivables that are not individually significant are

collectively assessed for impairment by grouping together loans and receivables with similar risk characteristics.

In assessing collective impairment, the Group uses historical trends of the probability of default, timing of

recoveries and the amount of loss incurred, adjusted for management’s judgement as to whether current

economic and credit conditions are such that the actual losses are likely to be greater or less than suggested

by historical trends.





3.7 Impairment (cont’d)

Non-derivative financial assets (cont’d)

Loans and receivables (cont’d)

An impairment loss in respect of a financial asset measured at amortised cost is calculated as the difference

between its carrying amount, and the present value of the estimated future cash flows discounted at the asset’s

original effective interest rate. Losses are recognised in profit or loss and reflected in an allowance account against

receivables. Interest on the impaired asset continues to be recognised through the unwinding of the discount.

When a subsequent event causes the amount of the impairment losses to decrease, the decrease in impairment

loss is reversed through profit or loss. Impairment losses on unquoted equity instruments, that are not carried

at fair value because the fair value cannot be reliably measured, are measured as the difference between the

equity instruments carrying amount and the present value of the estimated future cash flows discounted at the

current market rate of return for a similar financial asset. The loss recognised is not reversed in future periods.

Available-for-sale financial assets

Impairment losses on available-for-sale equity financial assets are recognised by reclassifying the losses

accumulated in the fair value reserve in equity to profit or loss. The cumulative loss that is reclassified from equity

to profit or loss is the difference between the acquisition cost, net of any principal repayment and amortisation,

and the current fair value, less any impairment loss previously recognised in profit or loss. Changes in impairment

provisions attributable to application of the effective interest method are reflected as a component of interest

income.

If, in a subsequent period, the fair value of an impaired available-for-sale debt security increases and the

increase can be related objectively to an event occurring after the impairment loss was recognised in profit or

loss, then the impairment loss is reversed. The amount of the reversal is recognised in profit or loss. However,

any subsequent recovery in the fair value of an impaired available-for-sale equity security is recognised in other

comprehensive income.

Non-financial assets

The carrying amounts of the Group’s non-financial assets, other than inventories and deferred tax assets, are

reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication

exists, then the asset’s recoverable amount is estimated. For goodwill and intangible assets that have indefinite

useful lives or that are not yet available for use, the recoverable amount is estimated each year at the same time.

An impairment loss is recognised if the carrying amount of an asset of its related cash-generating unit (CGU)

exceeds its estimated recoverable amount.

The recoverable amount of an asset or CGU is the greater of its value in use and its fair value less costs to sell.

In assessing value in use, the estimated future cash flows 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 or CGU. For the purpose of impairment testing, assets that cannot be tested individually are grouped

together into the smallest group of assets that generates cash inflows from continuing use that are largely

independent of the cash inflows of other assets or CGU. Subject to an operating segment ceiling test, for the

purposes of goodwill impairment testing, CGUs to which goodwill has been allocated are aggregated so that the

level at which impairment is tested reflects the lowest level at which goodwill is monitored for internal reporting

purposes. Goodwill acquired in a business combination is allocated to groups of CGUs that are expected to

benefit from the synergies of the combination.





3.7 Impairment (cont’d)

Non-financial assets (cont’d)

The Group’s corporate assets do not generate separate cash inflows and are utilised by more than one CGU.

If there is an indication that a corporate asset may be impaired, then the recoverable amount is determined for

the CGU to which the corporate asset belongs.

Impairment losses are recognised in profit or loss. Impairment losses recognised in respect of CGUs are allocated

first to reduce the carrying amount of any goodwill allocated to the units, and then to reduce the carrying amount

of the other assets in the unit (group of units) on a pro rata basis.

An impairment loss in respect of goodwill is not reversed. In respect of other assets, impairment losses recognised

in prior periods are assessed at each reporting date for any indications that the loss has decreased or no

longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the

recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying amount does

not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no

impairment loss had been recognised.

Goodwill that forms part of the carrying amount of an investment in an associate is not recognised separately,

and therefore is not tested for impairment separately. Instead, the entire amount of the investment in an associate

is tested for impairment as a single asset when there is objective evidence that the investment in an associate

may be impaired.

3.8 Employee benefits

Defined contribution plans

A defined contribution plan is a post-employment benefit plan under which an entity pays fixed contributions

into a separate entity and will have no legal or constructive obligation to pay further amounts. Obligations for

contributions to defined contribution pension plans are recognised as an employee benefit expense in profit or

loss in the periods during which services are rendered by employees.

Short-term employee benefits

Short-term employee benefit obligations are measured on an undiscounted basis and are expensed as the

related service is provided. A liability is recognised for the amount expected to be paid under short-term cash

bonus or profit-sharing plans if the Group has a present legal or constructive obligation to pay this amount as

a result of past service provided by the employee and the obligation can be estimated reliably.

Long service leave

The liability for employee benefits for long service leave represents the present value of the estimated future

cash outflows to be made by the employer resulting from employee’s services provided up to the reporting date.

In determining the provision for long service leave, consideration has been given to future increases in wage

and salary rates, expired settlement dates and experience with staff departures. Related on-costs, as described

above, have also been included in the liability.





3.8 Employee benefits (cont’d)

Long service leave (cont’d)

Provision for employee entitlements which are not expected to be settled within twelve months are discounted

using the rates attached to certain government securities at the reporting date, which most closely match the

terms of maturity of the related liabilities.

Share-based payment transactions

The grant date fair value of share-based payment awards granted to employees is recognised as an employee

expense, with a corresponding increase in equity, over the period that the employees unconditionally become

entitled to the awards. The amount recognised as an expense is adjusted to reflect the number of awards for

which the related service and non-market vesting conditions are expected to be met, such that the amount

ultimately recognised as an expense is based on the number of awards that do meet the related service and

non-market performance conditions at the vesting date. For share-based payment awards with non-vesting

conditions, the grant date fair value of the share-based payment is measured to reflect such conditions and

there is no true-up for differences between expected and actual outcomes.

The fair value of the amount payable to employees in respect of share appreciation rights, which are settled in

cash, is recognised as an expense with a corresponding increase in liabilities, over the period that the employees

unconditionally become entitled to payment. The liability is remeasured at each reporting date and at settlement

date. Any changes in the fair value of the liability are recognised as personnel expense in profit or loss.

Share-based payment arrangements in which the Group receives goods or services as consideration for its

own equity instruments are accounted for as equity-settled share-based payment transactions, regardless of

how the equity instruments are obtained by the Group.

3.9 Provisions

A provision is recognised if, as a result of a past event, the Group has a present legal or constructive obligation

that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle

the obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax rate

that reflects current market assessments of the time value of money and the risks specific to the liability. The

unwinding of the discount is recognised as finance cost.

Warranties

A provision for warranties is recognised when the underlying products are sold. The provision is based on

historical warranty data and a weighting of all possible outcomes against their associated probabilities.

Reinstatement costs for leased property

A provision for reinstatement costs for leased property is recognised when an underlying make good obligation

clause exists in property lease contracts.

The provision is the best estimate of the present value of the expenditure required to settle the make good

obligation at the reporting date, based on current legal requirements and technology. Future make good costs

are reviewed annually and any changes are reflected in the present value of the make good provision at the

end of the reporting period.

The unwinding of the discount is recognised as finance cost.





3.10 Revenue recognition

Rental income

Rental income receivable under operating leases is recognised in profit or loss on a straight-line basis over

the term of the lease. Lease incentives granted are recognised as an integral part of the total rental income to

be received. Contingent rentals are recognised as income in the accounting period in which they are earned.

Sale of equipment, machinery and spare parts

Revenue from sale of equipment, machinery and spare parts are recognised upon the delivery to the customer

which is taken to be the point in time when the significant risks and rewards of ownership have been transferred

to the customer. Revenue excludes goods and services taxes and is arrived at after deduction of trade discounts.

No revenue is recognised if there are significant uncertainties regarding recovery of the consideration due,

associated costs or the possible return of goods.

Dividend

Dividend income is recognised in profit or loss when the shareholder’s right to receive payment is established.

3.11 Lease payments

Payments made under operating leases are recognised in profit or loss on a straight-line basis over the term

of the lease. Lease incentives received are recognised as an integral part of the total lease expense, over the

term of the lease.

Minimum lease payments made under finance leases are apportioned between the finance expense and the

reduction of the outstanding liability. The finance expense is allocated to each period during the lease term so

as to produce a constant periodic rate of interest on the remaining balance of the liability.

Contingent lease payments are accounted for by revising the minimum lease payments over the remaining term

of the lease when the lease adjustment is confirmed.

3.12 Finance expense

Finance expense comprise interest expense on borrowings, changes in the fair value of financial assets at fair

value through profit or loss, and losses on hedging instruments that are recognised in profit or loss. Borrowing

costs that are not directly attributable to the acquisition, construction or production of a qualifying asset are

recognised in profit or loss using the effective interest method.

Foreign currency gains and losses are reported on a net basis.





3.13 Income tax expense

Income tax expense comprises current and deferred tax. Current tax and deferred tax are recognised in profit

or loss except to the extent that it relates to a business combination, or items recognised directly in equity or

in other comprehensive income.

Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax

rates enacted or substantively enacted at the reporting date, and any adjustment to tax payable in respect of

previous years.

Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and

liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not

recognised for:

• temporary differences on the initial recognition of assets or liabilities in a transaction that is not a business

combination and that affects neither accounting nor taxable profit or loss;

• temporary differences related to investments in subsidiaries and jointly controlled entities to the extent

that it is probable that they will not reverse in the foreseeable future; and

• taxable temporary differences arising on the initial recognition of goodwill.

Deferred tax is measured at the tax rates that are expected to be applied to the temporary differences when

they reverse, based on the laws that have been enacted or substantively enacted by the reporting date.

Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities

and assets, and they relate to income taxes levied by the same tax authority on the same taxable entity, or on

different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets

and liabilities will be realised simultaneously.

A deferred tax asset is recognised for unused tax losses, tax credits and deductible temporary differences, to the

extent that it is probable that future taxable profits will be available against which they can be utilised. Deferred

tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that

the related tax benefit will be realised.

3.14 Earnings per share

The Group presents basic and diluted earnings per share (“EPS”) data for its ordinary and convertible

redeemable preference shares. Basic EPS is calculated by dividing the profit or loss attributable to ordinary and

convertible redeemable preference shareholders of the Company by the weighted average number of ordinary

and convertible redeemable preference shares outstanding during the year, adjusted for its own shares held.

Diluted EPS is determined by adjusting the profit or loss attributable to ordinary and convertible redeemable

preference shareholders and weighted average number of ordinary shares outstanding, adjusted for its own

shares held, for the effects of all dilutive potential ordinary shares, which comprise warrants issued and share

options granted to employees.





3.15 Segment reporting

An operating segment is a component of the Group that engages in business activities from which it may earn

revenues and incur expenses, including revenues and expenses that relate to transactions with any of the

Group’s other components. All operating segments’ operating results are reviewed regularly by the Group’s

chief operating decision maker to make decisions about resources to be allocated to the segment and assess

its performance, and for which discrete financial information is available.

Segment results that are reported to the Group’s chief operating decision maker include items directly attributable

to a segment as well as those that can be allocated on a reasonable basis. Unallocated items comprise mainly

corporate assets, head office expenses, and income tax assets and liabilities.

Segment capital expenditure is the total cost incurred during the period to acquire property, plant and equipment,

and intangible assets other than goodwill.

3.16 New standards and interpretations not yet adopted

A number of new standards, amendments to standards and interpretations are effective for annual periods

beginning after 1 April 2011, and have not been applied in preparing these financial statements. None of these

are expected to have a significant effect on the financial statements of the Group.




4 PROPERTY, PLANT AND EQUIPMENT

Group NoteFreehold

landFreehold

propertiesLeaseholdproperties

Assets under construction

Plant and machinery

Motor vehicles

Furniture, fittings,

office and workshop equipment Vessels Total

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

Cost

At 1 April 2010 10,101 13,337 30,586 – 574,823 39,007 12,619 30,351 710,824

Additions 246 598 961 – 108,018 5,611 2,488 1,063 118,985

Disposals/Write offs – – (55) – (31,948) (1,062) (853) (95) (34,013)

Reclassification from

inventories – – – – 52,616 – – – 52,616

Acquisition of

subsidiaries/

businesses 24 – – 3,535 – 22,348 – 251 – 26,134

Translation difference

on consolidation 37 138 (107) – (7,020) 825 (1,326) (537) (7,990)

At 31 March 2011 10,384 14,073 34,920 – 718,837 44,381 13,179 30,782 866,556

Additions 3,592 3,489 19,231 2,682 120,590 2,804 2,710 3,077 158,175

Disposals/Write offs – – (252) – (70,401) (1,826) (421) (9,860) (82,760)

Reclassification from

inventories – – – – 87,859 – – 11,378 99,237

Acquisition of

subsidiaries 24 – – – – 2,824 33 42 – 2,899


on consolidation (6) (1,186) (211) (84) 4,507 745 299 (18) 4,046

At 31 March 2012 13,970 16,376 53,688 2,598 864,216 46,137 15,809 35,359 1,048,153

Accumulated

depreciation and

impairment losses

At 1 April 2010 781 4,495 10,824 – 147,148 15,074 7,835 4,332 190,489

Depreciation charge

for the year – 303 1,632 – 48,070 3,975 2,096 2,346 58,422

Disposals/Write offs – – (52) – (8,248) (890) (703) (2) (9,895)

Impairment loss – 1,182 – – 2,871 – – – 4,053


on consolidation – 100 (49) – 94 600 (606) (277) (138)

At 31 March 2011 781 6,080 12,355 – 189,935 18,759 8,622 6,399 242,931

Depreciation charge

for the year – 416 1,949 – 58,338 4,130 1,859 2,263 68,955

Disposals/Write offs – – (227) – (22,970) (1,577) (297) (2,195) (27,266)


on consolidation – (1,199) 21 – (1,702) 627 307 (8) (1,954)

At 31 March 2012 781 5,297 14,098 – 223,601 21,939 10,491 6,459 282,666

Carrying amounts

At 1 April 2010 9,320 8,842 19,762 – 427,675 23,933 4,784 26,019 520,335

At 31 March 2011 9,603 7,993 22,565 – 528,902 25,622 4,557 24,383 623,625

At 31 March 2012 13,189 11,079 39,590 2,598 640,615 24,198 5,318 28,900 765,487

Property, plant and equipment with carrying amount of $279,980,000 (2011: $238,662,000) were acquired under

finance lease arrangements.




4 PROPERTY, PLANT AND EQUIPMENT (CONT’D)

Impairment losses

No impairment loss was recognised on property, plant and equipment during the year ended 31 March 2012.

As a result of a major flood that occurred in Australia in January 2011, the Group tested the affected property,

plant and equipment for impairment and recognised an impairment loss of $4,053,000 as the recoverable amount

was determined to be lower than the carrying amount. The recoverable amount was determined by reference

to the fair value less costs to sell of the affected property, plant and equipment.

Furniture, fittings, office and workshop

equipmentCompany $’000

Cost

At 1 April 2010 23

Additions 7

At 31 March 2011 30

Additions 3

At 31 March 2012 33

Accumulated depreciation

At 1 April 2010 11

Depreciation charge for the year 6

At 31 March 2011 17

Depreciation charge for the year 5

At 31 March 2012 22

Carrying amount

At 1 April 2010 12

At 31 March 2011 13

At 31 March 2012 11

The carrying amount of the property, plant and equipment is depreciated on a straight-line basis over the

remaining useful life of each property, plant and equipment. Management reviews and revises the estimates of

the remaining useful life and residual values of the property, plant and equipment at the end of each financial

year based on their age and condition at that time. Changes in the way the property, plant and equipment are

used and other factors (such as market or technological factors) could impact the useful life and residual values

of the property, plant and equipment, therefore future depreciation charges could be revised. Any changes in

the useful life and residual values of the property, plant and equipment would impact the depreciation charges

and consequently affect the Group’s and the Company’s results.




5 SUBSIDIARIES – COMPANY

2012 2011$’000 $’000

Unquoted shares in subsidiaries, at cost 42,116 40,864

Loans to subsidiaries 187,957 141,892

230,073 182,756

Loans to subsidiaries which form part of the Company’s net investments in subsidiaries, are interest-free,

unsecured and settlement is neither planned nor likely to occur in the foreseeable future. As the amounts are,

in substance, a part of the Company’s net investment in subsidiaries, they are stated at cost.

Details of the subsidiaries are as follows:

Name of subsidiaries Principal activitiesPlace of

incorporation

Effective equity interest held by

the Group2012 2011

% %

Tat Hong HeavyEquipment (Pte.)

Ltd.1 and its subsidiaries:

Trading, reconditioning, repairing

and supply of heavy machinery

and equipment

Singapore 100 100

Tat Hong Machinery Pte Ltd1 and its

subsidiary:

Supply of spare parts Singapore 100 100

Tat Hong Flo-Line Pte Ltd1 Remanufacturing, repair

and testing services of hydraulic

pumps and motors

Singapore 60 60

Hup Hin Transport Co Pte Ltd1 and

its subsidiaries:

Provision of lorry transport and

crane service

Singapore 70 70

Chip Eng Engineering Works

Pte Ltd1

Provision of rental of leasehold

property and machinery, servicing

and trading of machinery

Singapore 70 70

Hup Hin Transport (M) Sdn Bhd2 Manufacturing and repair of

lifting gears, handling of heavy

equipment, crane towing and

recovery services

Malaysia 42* –

Load Controls Systems Pte Ltd1 Supply of scientific and precision

equipment

Singapore 70 70

Tat Hong Crane Logistics Sdn Bhd2 Reprocessing, reconditioning,

repair and trading of heavy

machinery and equipment

Malaysia 100 –

Tat Hong (Thailand) Co., Ltd3# Rental of construction equipment

and provision of parts and related

services

Thailand 100 –




5 SUBSIDIARIES – COMPANY (CONT’D)


incorporation


the Group2012 2011

% %

Tat Hong Plant Leasing Pte Ltd1

and its subsidiaries:

Rental of heavy machinery

and equipment and holding of

investments

Singapore 100 100

Tat Hong United Logistics

Pte Ltd1

Provision of transportation and

logistics services

Singapore 100 100

TH Heavylift Pte Ltd4 In the process of voluntary

liquidation

Singapore 95 95

Tat Hong Heavylift Pte Ltd1 Crane rental, heavy lifting, haulage

and erection service

Singapore 100 100

Peng Koon Heavy Machinery

Pte Ltd1

Supply of heavy machinery and

equipment, motor trucks and

motor lorries

Singapore 70 70

Tat Hong Offshore and Marine

Services Pte Ltd1

Provision of offshore and marine

services

Singapore 50* 50*

PT Tat Hong Batam5 Rental of property Indonesia 100 100

PT World Wide Equipment

South East Asia5

Repair and maintenance services

of machinery and heavy equipment

Indonesia 100 50*

Tat Hong Crane Hire Pte Ltd1 Rental and trading of heavy

equipment and the provision of

related services

Singapore 100 100

Tat Hong Training Services

Pte Ltd1

Provision of training courses and

management consultancy work

Singapore 100 100

Leadpoint Pte Ltd1 and its

subsidiary:

Investment holding Singapore 70 70

Dyno Engineering Pte Ltd1 Manufacturer and trading of

construction equipment

Singapore 70 70

Tat Hong International Pte Ltd1

and its subsidiaries:


Tat Hong Plant Hire Sdn Bhd6 Rental of heavy machinery,

industrial equipment and cranes

Malaysia 100 100

KP Equipment Services Inc.4 In the process of voluntary

liquidation

Philippines 100 100






incorporation


the Group2012 2011

% %

PT Tatindo HeavyEquipment7 Distribution of heavy equipment

and spare parts

Indonesia 95 95


Middle East FZE8

In the process of voluntary

liquidation

United Arab

Emirates

100 100

Tat Hong Heavy Equipment

Middle East LLC8


liquidation

United Arab

Emirates

49* 49*

Tat Hong Equipment Co. Ltd9 Import, export, trade and lease

industrial and construction

machinery and equipment; repair

and maintain industrial machine

and equipment of construction and

lease warehouses

Vietnam 100 100


(Hong Kong) Limited10 and

its subsidiary:

Rental of heavy equipment and

related services

Hong Kong 100 100


(Macau) Limited10

Rental of heavy equipment and

related services

Macau 100 100

Tat Hong (V.N.) Pte Ltd1 and its

subsidiary:


Tat Hong Vietnam Co., Ltd11 Rental of heavy equipment and

machineries and provision of

related services

Vietnam 70 70

Tat Hong Equipment (China) Pte.

Ltd.1 and its subsidiaries:


Shanghai Tat Hong Equipment

Rental Co., Ltd.12

Rental of tower cranes and other

construction machineries

People’s Republic

of China

90 98

Tat Hong Zhaomao Investment

Co., Ltd12

Investment holding People’s Republic

of China

75 75

China Nuclear Huaxing TatHong

Machinery Construction Co., Ltd13

Rental of construction machinery

and heavy lifting equipment,

installation and related engineering

services and supplies

People’s Republic

of China

71 73






incorporation


the Group2012 2011

% %

Jiangsu Zheng He TatHong

Equipment Rental Co., Ltd14

Rental, maintenance and repair

of construction machines and

equipment, sale of construction

equipment and, technology

consultancy and related technical

services

People’s Republic

of China

96 55

Beijing Tat Hong ZhaoMao

Equipment Rental Co., Ltd15




services & supplies

People’s Republic

of China

61 54

Si Chuan Tat Hong Yuan Zheng

Machinery Construction Co., Ltd.16




services and supplies

People’s Republic

of China

52 36*

Tutt Bryant Group Limited17 and

its subsidiaries:

Supply of construction equipment

and related services

Australia 100 100

Tat Hong Equipment Finance Pty

Ltd17


liquidation

Australia 100 100

BT Equipment Pty Ltd17 Supply of heavy machinery,

equipment and related services

Australia 100 100

EQR Investments Pty Ltd17 and its

subsidiaries:

Investment holding Australia 100 100

Office Cleaning Services Pty Ltd17

(EQ Hire Vic)

Rental of equipment Australia 100 100

North Sheridan Pty Ltd17 General hire operations Australia 100 100

Kingston Industries Pty Ltd17 and

its subsidiaries:

Plant hire services and contracting

for heavy haulage, compaction

services, civil engineering, rail

maintenance and excavation

Australia 100 100

Kingston Industries (WA) Pty Ltd17 Heavy haulage Australia 100 100

Relsok Pty Ltd17 Property holding Australia 100 100






incorporation


the Group2012 2011

% %

Falconer Administration Trust17 Provision of trust administration

services

Australia 100 100

Muswellbrook Crane Services

Pty Ltd17

Provision of crane rental

and related services

Australia 100 100

* Although the Group owns 50% or less than half of the voting power of these companies, it is able to govern the financial and operating

policies of the companies by virtue of agreement with the other investors. Consequently, the Group consolidates its investments in the

companies as subsidiaries of the Group.

# During the year, the Group acquired the remaining 51% interest in Tat Hong (Thailand) Co., Ltd and accordingly, the associate became a

wholly-owned subsidiary as at 31 March 2012 (refer to note 24).

1 Audited by KPMG Singapore.

2 Not audited as it was recently incorporated.

3 Audited by KPMG Bangkok.

4 Not required to be audited as the company is in the process of voluntary liquidation.

5 Audited by Jamaludin, Aria, Sukimto & Rekan Registered Public Accountants.

6 Audited by KPMG Petaling Jaya.

7 Audited by Yuwono, H & Rekan Registered Public Accountant.

8 Audited by HLB Hamt Chartered Accountants.

9 Audited by DNP Auditing-Financial Consulting Co. Ltd.

10 Audited by Baker Tilly Hong Kong.

11 Audited by Moore Stephens International Limited, Vietnam.

12 Audited by for local statutory reporting purpose and Audit Alliance for group reporting purpose.





17 Audited by KPMG Sydney.




6 ASSOCIATES

Group2012 2011$’000 $’000

Investments in associates 63,347 60,485

Loans to associates – interest free 38 64

63,385 60,549

Company2012 2011$’000 $’000

Quoted equity shares 34,037 34,037

Unquoted equity shares 264 205

34,301 34,242

Loans to associates – interest free 38 38

34,339 34,280

Less: Impairment loss (6,888) (6,888)

27,451 27,392

Market value of quoted equity shares 27,862 31,641

Loans to associates which form part of the Group’s net investments in associates are interest-free, unsecured

and settlement is neither planned nor likely to occur in the foreseeable future. As the amounts are, in substance,

a part of the Group’s net investment in the associates, they are stated at cost.

Movements in allowance for impairment losses are as follows:

Group Company2012 2011 2012 2011$’000 $’000 $’000 $’000

At 1 April 6,888 – 6,888 –

Impairment losses recognised

during the year – 6,888 – 6,888

At 31 March 6,888 6,888 6,888 6,888

In view of a decline in the market price of a listed associate in 2011, the Group tested the investment in that

associate for impairment and recognised an impairment loss of $6,888,000 as the recoverable amount was

determined to be lower than the carrying amount. The recoverable amount was determined based on value-

in-use calculations using discounted cash flow projections of estimated future dividends to be received from

that associate. The pre-tax discount rate applied was 8% (2011: 8%). No impairment loss was recognised on

investments in associates in 2012.




6 ASSOCIATES (CONT’D)

The summarised information is as follows:

Group2012 2011$’000 $’000

Revenue 324,667 318,663

Expenses (309,857) (288,818)

Profit before income tax 14,810 29,845

Income tax expense (4,949) (5,888)


Non-current assets 137,345 99,942

Current assets 386,766 302,812

Current liabilities (230,336) (163,146)

156,430 139,666

Non-current liabilities (59,503) (25,300)

Net assets 234,272 214,308

The summarised financial information relating to the associates is not adjusted for the percentage of ownership

held by the Group.

The Group’s share of the capital commitments of the associates is $Nil (2011: $498,000).

Details of associates are as follows:

Name of associates Principal activitiesPlace of

incorporation


the Group2012 2011

% %

Kian Ho Bearings Ltd Stockists, distributors and retailers in bearings and seal products

Singapore 31 31

Global Heavyequipment Sdn Bhd Rental of construction equipment and provision of parts and related services

Malaysia 49 –

KT Lion Oilfield Services Limited Dormant British Virgin Islands

30 30

EMC Cranes (KL) Sdn. Bhd. Dormant Malaysia 22 22

Tat Hong (Thailand) Co., Ltd# Rental of construction equipment and provision of parts and related services

Thailand – 49

THL Foundation Equipment Pte Ltd and its subsidiaries

Trading and rental of construction equipment and related parts

Singapore 45 45

Tat Hong Properties Sdn Bhd Dormant Malaysia 30 30

Yongmao Holdings Limited and its subsidiaries

Manufacture and sale of towercranes

Singapore 24 24

R&D Holdings Pte Ltd and its subsidiary

Precision engineering and mould making

Singapore 21 21

# During the year, the Group acquired the remaining 51% interest in Tat Hong (Thailand) Co., Ltd and accordingly, the associate became a

wholly-owned subsidiary of the Group as at 31 March 2012 (refer to note 24).




7 JOINT VENTURES

Group Company2012 2011 2012 2011$’000 $’000 $’000 $’000

Investments in joint ventures 2,166 5,758 7,968 7,968

Loans to joint ventures 113 418 113 418

2,279 6,176 8,081 8,386

Less: Impairment loss – – (5,772) (3,062)

2,279 6,176 2,309 5,324

Loans to joint ventures which form part of the Group’s net investments in joint ventures are interest-free,

unsecured and settlement is neither planned nor likely to occur in the foreseeable future. As the amounts are,

in substance, a part of the Group’s net investment in the joint ventures, they are stated at cost.

Movement in allowance for impairment losses is as follows:

Company2012 2011$’000 $’000

At 1 April 3,062 2,188

Impairment losses recognised during the year 2,710 874

At 31 March 5,772 3,062

Two of the joint ventures have been making losses for the past few years and accordingly an impairment

assessment was carried out by the management. The recoverable amount of these joint ventures’ assets is

estimated based on their fair value less costs to sell. Accordingly, the Company recognised an impairment loss

of $2,710,000 (2011: $874,000) during the financial year.

Particulars of the joint ventures are as follows:

Name of company Principal activitiesPlace of

incorporation


the Group2012 2011

% %

Girdnal Oilfield Services Inc. Dormant United States of

America

50 50

Global Oilfield Services Pte Ltd In the process of liquidation Singapore 50 50

Tat Hong Energy Pte Ltd and its

subsidiary:

Dormant Singapore 50 50

PT Tat Hong Energy Indonesia Dormant Indonesia 50 50




7 JOINT VENTURES (CONT’D)

Name of company Principal activitiesPlace of

incorporation


the Group2012 2011

% %

T.B.F. Oceania Pty Ltd Provide lifting, logistic and

transport service

Australia 50 50

Tat Hong (PNG) Limited Crane hire, general plant and

equipment hire, and wholesale

of machinery, equipment and

suppliers

Papua New

Guinea

50 –

The Group’s share of the joint ventures’ results, assets and liabilities is as follows:

2012 2011$’000 $’000

Revenue 2,295 292

Expenses (4,622) (708)

Loss before income tax (2,327) (416)

Income tax expense (100) (152)

Loss for the year (2,427) (568)

Non-current assets 3,994 5,714

Current assets 2,163 4,090

Current liabilities (3,802) (3,095)

(1,639) 995

Non-current liabilities (189) (951)

Net assets 2,166 5,758

8 OTHER FINANCIAL ASSETS

Group2012 2011$’000 $’000

Available-for-sale

Unquoted equity shares – at cost 115 201




9 DEFERRED TAX ASSETS AND LIABILITIES – GROUP

Movements in deferred tax assets and liabilities (prior to offsetting of balances) during the year are as follows:

At 1 April 2010

Recognised in profit or loss

(note 22)

Acquisition of a

subsidiary (note 24)


on consolidation

At 31 March

2011

Recognised in profit or loss

(note 22)

Acquisition of a

subsidiary (note 24)


on consolidation

At 31 March

2012

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

Deferred tax assets

Property, plant and

equipment 144 224 − (13) 355 (181) − (1) 173

Unabsorbed wear and

tear allowances and

unutilised tax losses 332 (241) − (9) 82 2,080 − (6) 2,156

Allowances 3,451 2,080 − 124 5,655 (406) − 29 5,278

Other items 926 (265) − (8) 653 (603) − − 50

4,853 1,798 − 94 6,745 890 − 22 7,657

Deferred tax

liabilities

Property, plant and

equipment (13,956) 211 (779) 304 (14,220) (3,991) (63) (41) (18,315)

Other items (557) 358 (20) − (219) (1,058) − 141 (1,136)

(14,513) 569 (799) 304 (14,439) (5,049) (63) 100 (19,451)

Deferred tax liabilities and assets are offset when there is a legally enforceable right to set off current tax assets

against current tax liabilities and when the deferred taxes relate to the same taxation authority. The following

amounts, determined after appropriate offsetting, are included in the statement of financial position as follows:

2012 2011$’000 $’000

Deferred tax liabilities (18,113) (14,275)

Deferred tax assets 6,319 6,581

(11,794) (7,694)

Utilised tax losses of the Group amounting to $3,331,000 (2011: $Nil) expire between 2016 and 2017. The

remaining unutilised tax losses and deductible temporary differences do not expire under current tax legislation.

Deferred tax assets of $116,000 (2011: $103,000) have not been recognised in respect of the following temporary

differences:

2012 2011$’000 $’000

Deductible temporary differences 283 180

Unutilised tax losses and capital allowances 402 427

Deferred tax assets have not been recognised in respect of these items because it is not probable that future

taxable profit will be available against which the Group can utilise these benefits.




10 INTANGIBLE ASSETS – GROUP

Note 2012 2011$’000 $’000

Goodwill arising on consolidation

At 1 April 55,441 54,925

Goodwill arising on acquisition of a subsidiary 24 160 –

Translation difference on consolidation 327 516

At 31 March 55,928 55,441

Less:

Accumulated amortisation and impairment loss

At 1 April 7,456 2,342

Impairment loss 160 4,916


At 31 March 7,655 7,456

Carrying amount 48,273 47,985

Customer relationships

At 1 April 6,686 6,648


At 31 March 6,705 6,686

Less:

Accumulated amortisation

At 1 April 6,686 6,175

Amortisation charge for the year − 461


At 31 March 6,705 6,686

Carrying amount − −

Computer software

At 1 April 2,969 2,307

Additions 1,003 640

Disposal (122) −


At 31 March 3,878 2,969

Less:

Accumulated amortisation

At 1 April 1,910 1,460

Amortisation charge for the year 632 424

Disposal (108) −


At 31 March 2,447 1,910

Carrying amounts 1,431 1,059

Total carrying amounts 49,704 49,044

The amortisation and impairment loss is recognised in other operating expenses in profit or loss.




10 INTANGIBLE ASSETS – GROUP (CONT’D)

Impairment testing for cash-generating units containing goodwill

For the purpose of impairment testing, goodwill is allocated to the Group’s operating divisions or cash-generating

units (“CGU”), which represents the lowest level within the Group at which the goodwill is monitored for internal

management purposes and is not higher than the Group’s operating segments as reported in note 27.

The carrying amounts of goodwill are allocated as follows:

Group2012 2011

$’000 $’000

Tutt Bryant Group Limited and its subsidiaries (“Tutt Bryant Group”) 47,138 46,889

Multiple units without significant goodwill 1,135 1,096

48,273 47,985

The recoverable amount of Tutt Bryant Group CGU is determined based on value-in-use calculation, using cash

flow projections derived from financial budgets derived from management’s forecast results for the year ending

31 March 2013. Cash flows are projected using growth rates ranging from 0% to 3% (2011: 0% to 3%), based

on management’s knowledge and past experience of the businesses. Cash flows beyond the five-year period

are extrapolated using the estimated terminal growth rate of 3% (2011: 3%). A pre-tax discount rate of 12.5%

(2011: 15%) was used in discounting the projected cash flows.

For the financial year ended 31 March 2012, based on the impairment assessment performed by management,

the carrying amount of the Tutt Bryant Group CGU was determined to be lower than its recoverable amount

and no impairment loss was recognised. In 2011, impairment loss amounting to $4,916,000 was recognised

as the carrying amount was higher than its recoverable amount. The impairment loss recognised in 2011 was

allocated fully to goodwill, and was included in other operating expenses.

11 INVENTORIES - GROUP

2012 2011$’000 $’000

Inventories for resale 211,266 191,306

Inventories in transit 22,587 12,721

Work-in-progress 3,636 1,680

237,489 205,707

Allowance for inventory:

At 1 April 4,886 6,979

Allowance made during the year 250 453

Inventory written off against allowance (1,802) (2,551)

Acquisition of subsidiaries 17 –

Translation difference on consolidation (53) 5

At 31 March 3,298 4,886

234,191 200,821

During the year, inventories recognised as cost of sales amounted to $260,913,000 (2011: $214,650,000). The

allowance made during the year of $250,000 (2011: $453,000) are included in cost of sales.




12 TRADE AND OTHER RECEIVABLES

Group Company2012 2011 2012 2011$’000 $’000 $’000 $’000

Trade receivables 149,358 92,487 – –

Allowance for receivables (5,716) (3,024) – –

143,642 89,463 – –

Non-trade receivables 4,045 9,262 – –

Deposits:

- for purchase of inventories 230 2,983 – –

- for purchase of property, plant

and equipment 2,999 3,135 – –

- others 2,221 2,615 4 –

Staff loans and advances 337 292 – –

Expenses recoverable 1,812 396 1 2

Interest receivable 11 5 – –

Non-trade amounts due from:

- related parties 4,120 2,820 – –

- subsidiaries − − 75,811 119,884

- an associate 750 750 – –

- a joint venture 1,247 − – –

Trade amounts due from:

- related corporations 2,730 7,345 – –

- associates 8,018 13,513 – –

- a joint venture 1,567 − − −

Loans and receivables 173,729 132,579 75,816 119,886

Advance payments 1,869 881 – –

Prepayments 7,344 7,594 227 78

Tax recoverable 1,876 4,391 – –

184,818 145,445 76,043 119,964

Included in trade receivables as at 31 March 2012 is an amount of $503,000 (2011: $496,000) relating to bills

receivable which are interest-free.

The non-trade amounts due from related parties, subsidiaries and an associate are unsecured, and interest-free

and repayable on demand. The non-trade amount due from a joint venture is unsecured, bears interest at rate

of 7% per annum and is repayable on demand.

The Group’s primary exposure to credit risk arises through its trade receivables. Concentration of credit

risk relating to trade receivables is limited due to the Group’s many varied customers. These customers are

internationally dispersed, engage in a wide spectrum of manufacturing and distribution activities, and sell in a

variety of end markets. The Group’s historical experience in the collection of accounts receivable falls within

the recorded allowances. Due to these factors, management believes that no additional credit risk beyond the

amounts provided for collection losses is inherent in the Group’s trade receivables.




12 TRADE AND OTHER RECEIVABLES (CONT’D)

Impairment losses

The ageing of trade receivables and related parties balances at the reporting date is:

GrossImpairment

losses GrossImpairment

losses2012 2012 2011 2011$’000 $’000 $’000 $’000

Group

Not past due 119,746 (451) 81,791 (13)

Past due 0 – 90 days 28,146 (238) 22,142 (242)

Past due 91 – 180 days 5,694 (290) 5,793 (788)

Past due 181 – 365 days 6,000 (3,004) 2,943 (1,345)

Past due more than one year 2,087 (1,733) 676 (636)

161,673 (5,716) 113,345 (3,024)

The change in impairment loss in respect of trade receivables balances during the year is as follows:

Group2012 2011$’000 $’000

At 1 April 3,024 5,838

Impairment loss recognised 4,801 2,835

Amount reversed (1,180) (3,579)

Amount utilised (989) (1,871)

Translation difference 60 (199)

At 31 March 5,716 3,024

Based on historical default rates, the Group believes that no impairment allowance is necessary in respect of

trade receivables not past due or past due up to 90 days, unless specifically provided for due to uncertainties

in the collection of debts. These receivables are mainly arising by customers that have good payment records

with the Group.




13 CASH AND CASH EQUIVALENTS

Group CompanyNote 2012 2011 2012 2011

$’000 $’000 $’000 $’000

Cash at banks and in hand 66,806 54,481 309 418

Fixed deposits with banks 9,964 7,332 – –

76,770 61,813 309 418

Fixed deposit earmarked for certain

banking facilities (9,492) (7,280)

Bank overdrafts (unsecured) 17 (462) (558)

Cash and cash equivalents in the

consolidated statement of cash flows 66,816 53,975

The effective interest rates per annum relating to cash and cash equivalents, excluding bank overdrafts, at the

reporting date for the Group are between 0.20% - 13% (2011: between 0.24% – 2.75%). Interest rates reprice

within one year.

Cash and cash equivalents totalling the equivalent of $12,468,000 (2011: $11,207,000) are held in countries

which operate foreign exchange controls.

The bank overdrafts of a subsidiary are guaranteed by the Company. The effective interest rate of the bank

overdrafts at the reporting date for the Group is 5.25% (2011: 5.25%) per annum. Interest rates reprice within

one year.

14 SHARE CAPITAL – COMPANY

Ordinary sharesConvertible redeemable

preference shares2012 2011 2012 2011

No. ofshares

No. ofshares

No. ofshares

No. ofshares

’000 ’000 ’000 ’000

Issued and fully-paid with no par value:

At 1 April and 31 March 506,627 506,627 65,000 65,000

Convertible redeemable preference shares

Convertible redeemable preferences shares (“CRPS”) do not carry the right to vote unless it is a resolution

proposed at a General Meeting to:

1. vary the rights attached to the CRPS;

2. wind-up the Company; or

3. appoint, re-appoint or remove any Director nominated by the Preference Shareholders (or any

majority thereof).




14 SHARE CAPITAL – COMPANY (CONT’D)

The holders of the CRPS are entitled to receive annual dividend based on the following amounts:

- in respect of the first five financial years commencing from 1 April 2009, the dividend on each CRPS will

carry similar dividend rights as declared from time to time to the ordinary shareholders of the Company; and

- For the financial year ending after 31 March 2014, unless and until the redemption of all the issued CRPS

in full in accordance with the terms and conditions of the CRPS, and provided that the Company at its

discretion has declared a dividend to ordinary shareholders at the same time or earlier, a dividend equal

to 25% of the issue price of the CRPS will be paid on each CRPS.

Each CRPS shall be convertible into one ordinary share in the share capital of the Company. After the first

anniversary of the date of issuance, the outstanding CRPS will be automatically converted into ordinary shares in

the event the volume weighted average price of the ordinary shares of the Company as computed over a period

of 30 trading days on the Singapore Stock Exchange was over 50% of the issue price (“mandatory conversion

condition”). The conversion ratio will be subject to the usual anti-dilution adjustments and shall be mandatorily

converted into ordinary share based on the above mandatory conversion condition:

- for the period commencing on the first anniversary and ending on the third anniversary of the date of

issuance of CRPS, one-third of the outstanding CRPS shall be converted into ordinary shares;

- for the period commencing on the third anniversary and ending on the fourth anniversary of the date of

issuance of CRPS, one-third of the outstanding CRPS plus a further half of the remaining and outstanding

CRPS shall be converted into ordinary shares; and

- for the period commencing on the fourth anniversary and ending on the fifth anniversary of the date of

issuance of CRPS, all remaining CRPS shall be converted.

Ordinary shares

The holders of ordinary shares (excluding treasury shares) are entitled to receive dividends as declared from

time to time and are entitled to one vote per share at meetings of the Company. All shares (excluding treasury

shares) rank equally with regard to the Company’s residual assets.

Capital management

The Board’s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence

and to sustain future development of the business.

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 payments to shareholders, return

capital to shareholders or issues new shares.

From time to time, the Group purchases its own shares on the market; the timing of these purchases depends

on market prices. Primarily, the shares purchased are intended to be used for issuing shares under the Group’s

share option programme. Buy and sell decisions are made on a specific transaction basis by the Board; the

Group does not have a defined share buy-back plan.

There were no changes in the Group’s approach to capital management during the year.




14 SHARE CAPITAL – COMPANY (CONT’D)

Capital management (cont’d)

The Group monitors capital using a gearing ratio, which is net debt divided by total capital. The Group includes

within net debt, financial liabilities and trust receipts, less cash and cash equivalents. Capital includes equity

attributable to the owners of the Company.

Group2012 2011$’000 $’000

Trust receipts 58,918 41,573

Financial liabilities 455,955 409,430

Less: Cash and cash equivalents (76,770) (61,813)

Net debt 438,103 389,190

Total equity attributable to the owners of the Company 556,397 518,855

Gearing ratio 79% 75%

15 RESERVES

Group Company2012 2011 2012 2011$’000 $’000 $’000 $’000

Reserve for own shares (1,780) (1,780) (1,780) (1,780)

Share option reserve 1,357 1,357 1,357 1,357

Currency translation reserve 6,532 2,282 – –

Capital reserves 23,789 23,799 – –

Accumulated profits 273,639 240,337 40,628 36,111

303,537 265,995 40,205 35,688

Reserve for own shares comprises the cost of the Company’s 1,961,000 (2011: 1,961,000) ordinary shares

held by the Company.

The share option reserve comprises the cumulative value of employee services rendered for the issue of share

options.

The currency translation reserve comprises all foreign exchange differences arising from the translation of the

financial statements of foreign entities as well as the translation of loans which form part of the Company’s net

investment in subsidiaries, associates and joint ventures.

Capital reserves represent the amount capitalised from accumulated profits upon bonus issue by subsidiaries

and effects arising from dilution and acquisition of interest in subsidiaries and associates. Capital reserves

include statutory reserve funds of $2,358,000 (2011: $1,873,000) as at 31 March 2012.

Subsidiaries in the People’s Republic of China (“PRC”) follow the accounting principles and relevant financial

regulations of the PRC (“PRC GAAP”) relating to the appropriation of profit to a statutory reserve fund, which

is not distributable.




16 TRADE AND OTHER PAYABLES

Group Company2012 2011 2012 2011$’000 $’000 $’000 $’000

Trade payables 205,389 87,842 366 483

Non-trade payables 21,443 11,361 – 8

Interest payable 862 669 – –

Deposits received 4,389 2,512 – –

Unclaimed dividends 7 7 7 7

Accrued operating expenses 27,514 15,948 1,564 854

Amounts due to:

- related corporations 358 546 – 53

- associates 18,528 13,383 – –

- shareholder of a subsidiary 2,507 1,642 – –

- a joint venture 750 750 750 750

Derivative financial instruments 2,285 2,036 571 367

Classified as financial liabilities 284,032 136,696 3,258 2,522

Liability for long service and annual leave 12,163 11,214 164 160

Provisions 1,242 934 – –

Advance billings and advance receipts 2,352 1,925 – –

299,789 150,769 3,422 2,682

Classified as :

Current 298,070 149,252 3,422 2,682

Non-current 1,719 1,517 – –

299,789 150,769 3,422 2,682

The amounts due to related corporations, associates, a shareholder of a subsidiary, directors of a subsidiary

and a joint venture are non-trade in nature, unsecured, interest-free and repayable on demand.

Trade payables of the Group included trust receipts of certain subsidiaries amounting to $58,712,000 (2011:

$41,573,000) which are guaranteed by the Company. The following table indicates the effective interest rates

at the reporting date and the period in which they reprice:

EffectiveFixed interest

rates maturinginterest within

Group rate Total 1 year% $’000 $’000

2012

Trust receipts 1.19 – 2.55 58,712 58,712

2011

Trust receipts 1.35 – 2.48 41,573 41,573




16 TRADE AND OTHER PAYABLES (CONT’D)

Movements in provisions are as follows:

Provision for

warranty

Provision for leased property

reinstatement costs Total

Group $’000 $’000 $’000

At 1 April 2010 1,254 270 1,524

Provision made during the year 133 – 133

Payments made during the year (321) – (321)

Provision reversed during the year (398) – (398)

Translation difference on consolidation (7) 3 (4)

At 31 March 2011 661 273 934

Provision made during the year 497 66 563

Payments made during the year (258) – (258)

Translation difference on consolidation 2 1 3

At 31 March 2012 902 340 1,242

Provision for warranty claims are made by a subsidiary for claims received and claims expected to be received

in relation to sales made prior to the reporting date, based on historical claims rates, adjusted for specific

information arising from internal quality assurance processes.

The Group provides an amount to reinstate the premises upon termination of leases when this is a requirement

specified in the terms of the leases. The amount provided is based on an estimate of likely costs to be incurred.

Movements in liability for long service and annual leave are as follows:

Group Company2012 2011 2012 2011$’000 $’000 $’000 $’000

At 1 April 11,214 9,910 160 132

Provision made during the year 4,472 4,446 15 30

Provision reversed during the year – (30) – –

Payments made during the year (3,565) (3,203) (11) (2)

Translation difference on

consolidation 42 91 – –

At 31 March 12,163 11,214 164 160




17 FINANCIAL LIABILITIES

Group Company2012 2011 2012 2011$’000 $’000 $’000 $’000

Non-current liabilities

Secured bank loans 45,640 12,593 – –

Unsecured bank loans 106,558 147,672 26,500 24,000

Finance lease liabilities 130,242 84,267 – –

Intra-group financial guarantees – – 4,610 4,386

282,440 244,532 31,110 28,386

Current liabilities

Secured bank loans 24,412 12,442 – –

Unsecured bank overdrafts 462 558 – –

Unsecured bank loans 81,903 86,268 8,500 16,000

Finance lease liabilities 66,738 65,630 – –

173,515 164,898 8,500 16,000

455,955 409,430 39,610 44,386

Total loans and borrowings 455,955 409,430 35,000 40,000

Intra-group financial guarantees – – 4,610 4,386

Total financial liabilities 455,955 409,430 39,610 44,386

The secured bank loans are secured on property, plant and equipment with a carrying amount of $103,642,000

(2011: $37,602,000) and fixed deposits of $9,492,000 (2011: $7,280,000) (see note 13).

At 31 March 2012, the Group had obligations under finance leases that are repayable as follows:

Payments Interest Principal Payments Interest Principal2012 2012 2012 2011 2011 2011$’000 $’000 $’000 $’000 $’000 $’000

Repayable:

Within 1 year 76,485 (9,747) 66,738 74,960 (9,330) 65,630

After 1 year but within 5 years 140,195 (9,953) 130,242 92,823 (8,556) 84,267

Total 216,680 (19,700) 196,980 167,783 (17,886) 149,897

Under the terms of the finance lease arrangements, no contingent rents are payable.




17 FINANCIAL LIABILITIES (CONT’D)

Terms and debt repayment schedule

Terms and conditions of outstanding loans and borrowings are as follows:

Nominalinterest

rate

2012 2011Year of

maturityFacevalue

Carryingamount

Facevalue

Carryingamount

Group $’000 $’000 $’000 $’000

S$ fixed rate loans 2.91% to 6.25% 2013 - 2015 10,325 10,325 4,407 4,407

S$ floating rate loans SOR + 1.15% to 1.75% 2013 - 2019 179,204 179,204 182,801 182,801

A$ fixed rate loans 5.08% to 7.69% 2012 - 2014 1,504 1,504 1,336 1,336

RMB floating rate loans PBOC*1.00% to 1.25% 2013 - 2017 66,720 66,720 68,839 68,839

MYR fixed rate loans 5.25% 2014 477 477 646 646

HKD floating rate loans 1.5% below prime

lending rate

2012 283 283 946 946

Bank overdrafts Prime lending rate + 1% 2012 462 462 558 558

Finance lease liabilities –

fixed rate

1.18% to 8.51% 2012 - 2017 189,780 189,780 147,228 147,228

Finance lease liabilities –

floating rate

Prime lending rate -

0.5% to Prime lending

rate - 1.5%

2014 - 2015 7,200 7,200 2,669 2,669

455,955 455,955 409,430 409,430

Nominalinterest

rate

2012 2011Year of

maturityFacevalue

Carryingamount

Facevalue

Carryingamount

Company $’000 $’000 $’000 $’000

S$ floating rate loans SOR + 1.5% 2016 35,000 35,000 30,000 30,000

S$ floating rate loans SGD cost of funds

+ 1.5%

2012 – – 10,000 10,000

35,000 35,000 40,000 40,000

* PBOC denotes People’s Bank of China interest rates





The following indicates the effective interest rates at the reporting date and the period in which they reprice:

Effective Floating Fixed interest rates maturinginterest interest within within

rate Total rate 1 year 1 to 5 yearsGroup $’000 $’000 $’000 $’000

2012

Secured loans

- S$ floating rate 1.47% to 3.8% 22,152 22,152 – –

- MYR fixed rate 5.22% 477 – 167 310

- RMB floating rate 6.90% to 8.31% 47,423 47,423 – –

Unsecured loans

- A$ fixed rate 5.08% to 7.69% 1,504 – 1,218 286


- HKD floating rate 3.75% 283 283 – –

- S$ fixed rate 2.91% to 6.25% 10,325 – 4,196 6,129


Finance lease liabilities 2.22% to 14.41% 196,980 7,200 63,460 126,320

Bank overdrafts 5.25% 462 462 – –

455,955 253,869 69,041 133,045

2011

Secured loans

- A$ fixed rate 6.87% 416 – 416 –


- MYR fixed rate 5.25% 646 – – 646


Unsecured loans

- A$ fixed rate 5.96% 920 – 920 –


- HKD floating rate 4.31% 946 946 – –

- S$ fixed rate 2.58% to 6.25% 4,407 – 3,177 1,230


Finance lease liabilities 2.80% to 12.82% 149,897 2,669 6,140 141,088

Bank overdrafts 5.25% 558 558 – –

409,430 255,813 10,653 142,964





Effective Floating Fixed interest rates maturinginterest interest within within

rate Total rate 1 year 1 to 5 yearsCompany $’000 $’000 $’000 $’000

2012

Financial liabilities

Unsecured loans


2011

Financial liabilities

Unsecured loans


The following are the expected contractual undiscounted cash outflows of financial liabilities, including interest payments and excluding the impact of netting agreements:

Carrying amount Cash flows

GroupContractualcash flows

Within1 year

Within1 to 5 years

More than5 years

$’000 $’000 $’000 $’000 $’000

2012


Variable interest rate loans 246,207 (261,184) (107,957) (150,058) (3,169)

Fixed interest rate loans 12,306 (12,795) (5,853) (6,942) –

Finance lease liabilities 196,980 (216,680) (76,485) (140,195) –

Bank overdrafts 462 (486) (486) – –

Trade and other payables 281,747 (281,747) (280,028) (1,719) –

751,107 (772,892) (470,809) (298,914) (3,169)

Derivative financial liabilities

Interest rate swap 765 (693) (416) (277) –

Forward contracts

- inflow 1,520 61,637 61,637 – –

- outflow – (62,812) (62,812) – –

2,285 (1,868) (1,591) (277) –

2011


Variable interest rate loans 252,586 (268,918) (100,654) (168,264) –

Fixed interest rate loans 6,389 (6,789) (5,334) (1,455) –

Finance lease liabilities 149,897 (167,783) (74,960) (92,823) –

Bank overdrafts 558 (588) (588) – –

Trade and other payables 134,660 (134,660) (133,143) (1,517) –

556,238 (578,738) (314,679) (264,059) –



Forward contracts –

- inflow 1,243 37,099 37,099 − –

- outflow − (38,387) (38,387) − –

2,036 (2,109) (1,988) (121) –





Carrying amount Cash flows

CompanyContractualcash flows

Within1 year

Within1 to 5 years

More than5 years

$’000 $’000 $’000 $’000 $’000

2012


Variable interest rate loans 35,000 36,356 9,084 27,272 –

Trade and other payables 2,687 2,686 2,686 − –

37,687 39,042 11,770 27,272 –


Interest rate swap 571 (284) (284) − –

2011


Variable interest rate loans 40,000 (41,421) (16,580) (24,841) –

Trade and other payables 2,155 (2,155) (2,155) – –

42,315 (43,576) (18,735) (24,841) –



Intra-group guarantees

Intra-group financial guarantees comprise guarantees granted by the Company to banks in respect of banking facilities amounting to $350,078,000 (2011: $316,963,000). The periods in which the financial guarantees expire are as follows:

Company2012 2011$’000 $’000

Less than 1 year 139,336 115,073

Between 1 and 5 years 210,742 201,890

350,078 316,963




18 SHARE-BASED PAYMENT

Equity compensation benefits

Tat Hong Employee Share Option Scheme 2006 and Performance Share Plan

The Tat Hong Employee Share Option Scheme 2006 (“ESOS 2006”) and Performance Share Plan (“PSP”) were approved by the Company at its Extraordinary General Meeting on 8 December 2006. The ESOS 2006 and PSP are administered by the Option Shares/Performance Shares Plan Committee, comprising four directors, Mak Lye Mun (Chairman), Ng San Tiong, Ng Sun Ho and Ong Tiew Siam.

Other information regarding the ESOS 2006 and PSP are set out as follows:

- the Board of the Company may specify the vesting conditions which must be satisfied or waived by the Board before options and awards allocated under the ESOS 2006 and PSP may be dealt with;

- the exercise price for each share in respect of which an option is exercisable shall be a price equal to the market price;

- the options can be exercised 1 year after the grant; and

- the options granted expire after 5 years for non-executive directors and 10 years for the employees of the Company and its subsidiaries.

At the end of the financial year, details of the options granted under the Scheme on the unissued ordinary shares of the Company are as follows:

Date ofgrant ofoptions

Exerciseprice per

share

Optionsoutstanding at

1 April 2011Options

cancelled

Optionsoutstandingat 31 March

2012

Numberof optionholders at

31 March 2012Exerciseperiod

30 September 2009 1.08 3,920,000 (405,000) 3,515,000 73 1 October 2010 –

30 September 2020

30 September 2009 1.08 400,000 – 400,000 4 1 October 2010 –

30 September 2015

4,320,000 (405,000) 3,915,000

Details of options granted to directors of the Company under the Scheme are as follows:

Name of director

Options grantedfor financialyear ended

31 March 2012

Aggregateoptions

granted sincecommencement


Aggregateoptions

exercised sincecommencement


Aggregateoptions

outstandingas at

31 March 2012

Ong Tiew Siam – 200,000 – 200,000

Tan Chok Kian – 100,000 – 100,000

Leong Horn Kee – 100,000 – 100,000

Low Seow Juan – 100,000 – 100,000

Mak Lye Mun – 100,000 – 100,000

Since the commencement of the Scheme, no options have been granted to the controlling shareholders of the Company or their associates and no participant under the Scheme has been granted 5% or more of the total options available under the Scheme.




18 SHARE-BASED PAYMENT (CONT’D)

Disclosure of the Scheme

The number and weighted average exercise prices of share options is as follows:

Weighted average exercise

priceNumber of

options

Weighted average exercise

priceNumber of

options2012 2012 2011 2011

$ ’000 $ ’000

Outstanding at 1 April 1.08 4,320 1.08 4,541

Cancelled during the year 1.08 (405) 1.08 (221)

Outstanding at 31 March 1.08 3,915 1.08 4,320

Exercisable at 31 March 1.08 3,915 1.08 4,320

The options outstanding at 31 March 2012 have an exercise price of $1.08 (2011: $1.08) and a weighted average

contractual life of 5 years for non-executive directors and 10 years for executive directors and employees from

the date of grant respectively, in accordance with the terms of the scheme.

Inputs for measurement of grant date fair values

The grant date fair value of the rights granted through the employee share purchase plan was measured based

on Trinomial Option Model Pricing (“TOPM”). The grant date fair value of all other share-based payment plans

was measured based on TOPM. Expected volatility is estimated by considering historic average share price

volatility. The inputs used in the measurement of the fair values at grant date of the share-based payment plans

are the following:

Fair value of share options and assumptionsAs at

30 September 2009

Fair value at grant date $0.313

Share price at grant date $1.05

Exercise price $1.08

Expected volatility (weighted average volatility) 50%

Option life (expected weighted average life) 3 years

Expected dividends $0.01 - $0.015

Risk-free interest rate (based on government bonds) 0.7%

19 REVENUE – GROUP

Revenue comprises income from rental of equipment and machinery, material and related labour charges to

customers and invoiced trading sales (refer to note 27).

All inter-company transactions have been eliminated in arriving at the Group’s revenue.




20 FINANCE EXPENSE – GROUP

2012 2011$’000 $’000

Interest paid and payable to:

- banks 9,861 6,643

- finance lease payable 11,958 11,302

Cost of borrowing 629 846

Loss on fair value adjustment on derivatives 16 320

Finance expense 22,464 19,111

21 PROFIT BEFORE INCOME TAX – GROUP

The following items have been included in arriving at profit before income tax:

Note 2012 2011$’000 $’000

Other operating income

Bargain purchase gain arising from acquisition of a subsidiary 760 1,395

Gain on disposal of property, plant and equipment – 3,243

Insurance claims recovered 2,857 5,385

Interest income 1,396 1,654

Rental income 1,086 804

Trade receivable recovered 39 175

Others 2,591 2,177

8,729 14,833

Staff costs

Wages and salaries 103,207 81,623

Contributions to defined contribution plans 8,700 7,403

Cost of long service leave and annual leave 4,472 4,416


116,379 94,088

Key management personnel compensation:

Compensation payable to key management personnel comprises:

Short-term employee benefits 9,313 7,844

Post employment benefits 129 196


9,442 8,310




21 PROFIT BEFORE INCOME TAX – GROUP (CONT’D)

Note 2012 2011$’000 $’000

Other expenses

Allowance for inventories made 11 250 453

Allowance for trade receivables made/(reversed) 12 3,621 (744)

Amortisation of intangible assets 10 632 885

Audit fees paid to:

- auditors of the Company 348 314

- other auditors 466 546

Trade receivables written off 10 116

Depreciation of property, plant and equipment 4 68,955 58,422

Directors’ fees:

- directors of the Company:

- payable by the Company 380 378

- payable by subsidiary 144 129

- directors of the subsidiaries 472 669

Exchange (gain)/loss (4,934) 1,594

Inventory written off 65 2,021

Loss on fair value adjustment on derivatives, net 274 70

Loss on disposal of property, plant and equipment 11,759 –

Non-audit fees paid to:

- auditors of the Company 66 88

- auditors of subsidiaries 23 220

Operating lease expenses 9,192 7,313

Property, plant and equipment written off 96 137

Provisions made/(reversed) (net) 16 563 (265)

Impairment loss on intangible assets 10 160 4,916

Impairment loss on property, plant and equipment 4 – 4,053

No ofdirectors

No of directors

2012 2011

Directors’ remuneration bands

Company’s directors receiving remuneration from the Group:

Number of directors in remuneration band:

- $500,000 and above 3 3

- $250,000 to $499,999 1 1

- below $250,000 6 6

10 10




22 INCOME TAX EXPENSE – GROUP

2012 2011Recognised in profit or loss $’000 $’000

Current tax expense

Current year 18,154 12,586

Over provision in respect of prior years (1,749) (2,246)

Foreign taxes suffered 974 923

17,379 11,263

Deferred tax expense

Movement in temporary differences 2,938 (2,011)

Under/(Over) provision in respect of prior years 1,221 (356)

4,159 (2,367)

Income tax expense 21,538 8,896

2012 2011

$’000 $’000

Reconciliation of effective tax rate

Profit before income tax 57,984 40,557

Tax calculated using Singapore tax rate of 17% (2011: 17%) 9,857 6,895

Effect of tax rates in foreign jurisdictions 3,830 2,561

Effect of utilisation of capital allowances and tax losses previously not recognised (420) –

Effect of concessionary tax rate (209) (94)

Foreign taxes suffered 974 923

Net non-deductible expenses 7,218 936

Over provision in respect of prior years (528) (2,602)

Unrecognised deferred tax assets during the year 13 30

Other items, net 803 247

21,538 8,896

Significant judgement is required in determining the capital allowances, the types and rates of taxes payable, deductibility of certain expenses, and taxability of certain income during the estimation of the provision for income taxes. There are many transactions and calculations for which the ultimate tax determination is uncertain during the ordinary course of business. The Group and the Company recognises liabilities for anticipated tax issues based on estimates of whether additional taxes will be due. Where the final tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact the provision for income tax and deferred income tax provisions in the period in which such determination is made.

Deferred tax assets are recognised for deductible temporary differences, wear and tear allowances, and tax losses carried forward to the extent that realisation of the related tax benefits through future taxable profits is probable.

Group Company2012 2011 2012 2011$’000 $’000 $’000 $’000

Current tax payable 11,022 7,902 99 251

Deferred tax assets 6,319 6,581 – –

Deferred tax liabilities 18,113 14,275 – –




23 EARNINGS PER SHARE – GROUP

(a) Basic earnings per share

The calculation of earnings per share is based on:

2012 2011$’000 $’000

Profit attributable to ordinary and convertible redeemable preference

shareholders 42,257 25,957

Number of shares2012 2011’000 ’000

Issued ordinary shares at 31 March 569,666 569,666

(b) Diluted earnings per share

The calculation of diluted earnings per share is based on:

2012 2011$’000 $’000

Profit attributable to ordinary and convertible redeemable preference

shareholders 42,257 25,957

Number of shares2012 2011’000 ’000

Weighted average number of shares (used in the

calculation of basic earnings per share) 569,666 569,666

As at 31 March 2012, the Group has a contractual obligation to convert 50,662,556 (2011: 50,662,656)

warrants into 50,662,556 (2011: 50,662,656) new ordinary shares in the share capital of the Company

at $2.50 each for cash commencing on 8 February 2009. The warrants were not included in the

computation of diluted earnings per share because the warrants were anti-dilutive. The warrants

expire on 2 August 2013.

As at 31 March 2012, there were 3,915,000 (2011: 4,320,000) options which were issued on

30 September 2009 available for conversion ordinary shares. Similarly, the share options were deemed

to be anti-dilutive as they were out of money.




24 ACQUISITION OF INTEREST IN SUBSIDIARIES

(i) Acquisition of subsidiaries

(a) Hup Hin Transport Co Pte Ltd (“Hup Hin”)

In December 2010, the Group acquired equity interest of 70% in Hup Hin for a purchase consideration

of $7,700,000. The effect of the acquisition is summarised as follows:

Note 2011 2011 2011$’000 $’000 $’000

Carrying Fair value Recognisedamounts adjustments value

Property, plant and equipment 4 21,553 4,581 26,134

Trade and other receivables 5,691 – 5,691

Cash and cash equivalents 2,180 – 2,180

Trade and other payables (3,943) – (3,943)

Current tax payable (671) – (671)

Financial liabilities (15,599) – (15,599)

Deferred tax liabilities 9 (20) (779) (799)

Total identifiable net assets 9,191 3,802 12,993

Non-controlling interests, based on

their proportionate interest in the

total identifiable net assets (3,898)

Bargain purchase gain recognised

in other operating income 21 (1,395)

Cash consideration paid 7,700

Less: Cash and cash equivalents

acquired (2,180)

Net cash outflow 5,520

The fair value of the property, plant and equipment has been determined based on directors’ estimate

of the amount that the Group could obtain, at acquisition date, from the disposal of the property,

plant and equipment in an arm’s length transaction between knowledgeable, willing parties, after

deducting the costs of disposal. In determining this amount, the directors have made their best

assessment, taking into account the conditions and current information available to them, including

recent transactions for similar assets within the same industry.




24 ACQUISITION OF INTEREST IN SUBSIDIARIES (CONT’D)

(i) Acquisition of subsidiaries (cont’d)

(b) Tat Hong Equipment Co. Ltd

In March 2011, the Group acquired the remaining equity interest of 51% in Tat Hong Equipment

Co. Ltd it does not own for a purchase consideration of $1,381,000 which was only accounted for

by the Group from 1 April 2011 as the financial impact to the consolidated financial statements for

the year ended 31 March 2011 was insignificant.

The effect of the acquisition is summarised as follows:

Note 2012 2012 2012$’000 $’000 $’000


Property, plant and equipment 4 842 – 842

Trade and other receivables 42 – 42

Inventories 1,045 – 1,045

Cash and cash equivalents 681 – 681

Trade and other payables (216) – (216)

Total identifiable assets 2,394 – 2,394

Fair value of the existing interest in the

acquiree (1,173)

Goodwill on consolidation 10 160

Cash consideration paid 1,381


acquired (681)

Net cash outflow 700

The fair value of the property, plant and equipment has been determined based on the directors’

estimate of the amount that the Group could obtain, at acquisition date, from the disposal of the

property, plant and equipment in an arm’s length transaction between knowledgeable, willing parties,

after deducting the costs of disposal. In determining this amount, the directors have made their best

assessment, taking into account the conditions and current information available to them, including

recent transactions for similar assets within the same industry.





(i) Acquisition of subsidiaries (cont’d)

(c) Tat Hong (Thailand) Co., Ltd

In December 2011, the Group acquired the remaining equity interest of 51% in Tat Hong (Thailand)

Co., Ltd for a purchase consideration of $132,000. From the date of acquisition, Tat Hong (Thailand)

Co., Ltd contributed revenue of $1,642,000 and loss for the year of $417,000 to the Group’s results.

If the acquisition had occurred on 1 April 2011, management estimates that the contributed revenue

would have been $5,692,000 and the consolidated profit for the year would have been $187,000. In

determining these amounts, management has assumed that the fair value adjustments that arose on

the date of acquisition would have been the same if the acquisition had occurred on 1 April 2011.

The effect of the acquisition is summarised as follows:

Note 2012 2012 2012$’000 $’000 $’000


Property, plant and equipment 4 1,683 374 2,057

Trade and other receivables 1,974 – 1,974

Current tax receivable 143 – 143

Inventories 55 – 55

Cash and cash equivalents 4,309 – 4,309

Trade and other payables (6,726) – (6,726)

Deferred tax liabilities 9 – (63) (63)

Total identifiable assets 1,438 311 1,749

Fair value of the existing interest in the

acquiree (857)

Bargain purchase gain recognised in

other operating income 21 (760)

Cash consideration paid 132


acquired (4,309)

Net cash inflow (4,177)

The fair value of the property, plant and equipment has been determined based on the independent

valuer assessment, at the acquisition date, from the disposal of the property, plant and equipment

in an arm’s length transaction between knowledgeable, willing parties, after deducting the cost of

disposal.





(ii) Acquisition of non-controlling interests

(a) PT World Wide Equipment South East Asia (“PTWW”)

During the year ended 31 March 2012, a subsidiary of the Company acquired additional equity interest

of 50% in PTWW for a purchase consideration of $8,175,000, increasing its equity interest held

from 50% to 100%. The carrying amount of PTWW’s net assets in the Group’s financial statements

on the date of acquisition was $12,231,000. The Group recognised a decrease in non-controlling

interests and capital reserves of $6,789,000 and $2,124,000 respectively and an increase in currency

translation reserve of $738,000.

(b) Jiangsu Zheng He TatHong Equipment Co., Ltd (“ZHTH”)

During the year ended 31 March 2012, a subsidiary of the Company acquired additional equity

interest of 45% in ZHTH for a purchase consideration of $6,938,000 increasing its effective equity

interest held from 55% to 96%. The carrying amount of ZHTH’s net assets in the Group’s financial

statements on the date of acquisition was $20,027,000. The Group recognised a decrease in non-

controlling interests of $8,842,000 and an increase in capital reserves and currency translation

reserve of $1,861,000 and $43,000 respectively.

25 DIVIDENDS

Group and Company2012 2011$’000 $’000

Final dividend paid of 0.5 cents (2011: 1.5 cents)

per ordinary share 2,523 7,570

Final dividend paid of 0.5 cents (2011: 1.5 cents) per share to

convertible redeemable preference shareholders 325 975

Interim dividend paid of 1.0 cents (2011: 1.0 cents)

per ordinary share 5,048 5,046

Interim dividend paid of 1.0 cents (2011: 1.0 cents) per share to

convertible redeemable preference shareholders 650 650

8,546 14,241

After the reporting date, the directors proposed the following dividends. The dividends have not been provided for.

Group and Company2012 2011$’000 $’000

Proposed dividend of 1.5 cents (2011: 0.5 cents) per share to:

- ordinary shareholders 7,570 2,523

- convertible redeemable preference shareholders 975 325

8,545 2,848




26 FINANCIAL INSTRUMENTS

Overview

The Group’s activities in the normal course of business expose it to credit, liquidity and market risks. The Group’s

risk management approach seeks to minimise the potential material adverse effects from these exposures.

Risk management framework

The Board of Directors has overall responsibility for the establishment and oversight of the Group’s risk

management framework. The Board has established a Risk Management Committee, which oversees how

management monitors compliance with the Group’s risk management policies and procedures and reviews

the adequacy of the risk management framework in relation to the risks faced by the Group. The committee

reports to the Board of Directors on the outcome of its review and discussions and makes recommendations

from time to time on matters arising and requiring the attention of the Board.

The Group’s risk management policies are established to identify and analyse the risks faced by the Group, to

set appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk management policies

and systems are reviewed regularly to reflect changes in market conditions and the Group’s activities. The Group,

through its training and management standards and procedures, aims to develop a disciplined and constructive

control environment in which all employees understand their roles and obligations.

Credit risk

Credit risk is the potential financial loss to the Group if a customer or counterparty to settle its financial and

contractual obligations to the Group as and when it fall due. Credit risk is managed and monitored through the

application of credit approvals, performing credit evaluations and setting credit limits. For trade receivables, the

Group adopts the policy of dealing only with customers with appropriate credit history to mitigate credit risk.

The Group also monitors the collectability on an on-going basis.

The Group establishes an allowance for impairment that represents its estimates of incurred losses in respect of

trade and other receivables. The main components of this allowance are a specific loss component that relates

to individually significant exposures, and a collective loss component established for groups of similar assets

in respect of losses that have been incurred but not yet identified. The collective loss allowance is determined

based on historical data of payment statistics for similar financial assets.

The allowance account in respect of trade and other receivables is used to record impairment losses unless

the Group is satisfied that no recovery of the amount owing is possible. At that point, the financial asset is

considered irrecoverable and the amount charged to the allowance account is written off against the carrying

amount of the impaired financial asset.

Investments and bank transactions are allowed with counter-parties that meet the appropriate credit criteria

and are of high credit standing. As such, management does not expect any counter-party to fail to meet its

obligations. At the reporting date, there were no significant concentrations of credit risk. The maximum exposure

to credit risk is represented by the carrying amount of each financial asset in the statement of financial position.




26 FINANCIAL INSTRUMENTS (CONT’D)

Liquidity risk

The objective of liquidity management is to ensure that the Group has sufficient funds to meet its contractual

and financial obligations as and when it falls due. The Group’s approach to managing liquidity is to ensure, as far

as possible, that it will always have sufficient liquidity to meet its liabilities when due, under normal and stressed

conditions, without incurring unacceptable losses or risking damage to the Group’s reputation.

The Group focuses on ensuring the matching maturities of the Group’s assets and liabilities. A sufficient amount

of credit facilities from financial institutions have been secured and an adequate level of funding is maintained.

The Group will also maintain a level of cash and cash equivalents deemed adequate by management to finance

the Group’s operations and to mitigate the effects of fluctuations in cash flows. Typically the Group ensures

that it has sufficient cash on demand to meet expected operational expenses for a period of 60 days, including

the servicing of financial obligations; this excludes the potential impact of extreme circumstances that cannot

reasonably be predicted, such as natural disasters.

Market risk

Market risk is the risk that changes in market prices, such as interest rates, foreign exchange rates and equity

prices will have on the Group’s income or the value of the holdings of the financial instruments. The objective

of market risk management is to manage and control market risk exposures within acceptable parameters,

while optimising the return on risk.

It is the Group’s policy not to engage in foreign exchange and/or derivatives speculation or trading. It is not

in the interest of the Group to speculate or trade in treasury instruments. The purpose of engaging in treasury

transactions is solely for hedging.

The Group has establishments in countries other than Singapore. These establishments are exposed to changes

in government regulations and unfavourable political developments, which may limit the realisation of business

opportunities and investments in these countries. In addition, the Group’s business operations are exposed to

economic uncertainties that continue to affect the global economy and international capital market. Although

these circumstances may be beyond its control, the Board and the Management consistently keep themselves

up-to-date on the changes in political and industry regulations so as to be able to anticipate or respond to any

adverse changes in market conditions in an efficient and timely manner.

Interest rate risk

The Group’s interest rate risk is managed on an on-going basis with the objective to limit the extent to which the

Group’s results could be affected by an adverse movement in interest rate. The Group’s cash balances are placed

with reputable banks. For financing obtained through borrowings and finance lease arrangements, the Group’s

policy is to obtain the most favourable interest rates available. Where necessary, the Group will use derivative

financial instruments to hedge the interest rate risks or to convert borrowings from floating rates to fixed rates.





Interest rate risk (cont’d)

At the reporting date, the interest rate profile of the Group’s and Company’s interest-bearing financial

instruments were:

Group CompanyCarrying amount Carrying amount

2012 2011 2012 2011$’000 $’000 $’000 $’000

Variable rate instruments

Fixed deposits 9,964 7,332 – –

Financial liabilities (253,869) (255,813) (35,000) (40,000)

(243,905) (248,481) (35,000) (40,000)

Sensitivity analysis

A change of 100 bp in interest rate at the reporting date would increase/(decrease) profit or loss before tax (and

accumulated profits) by the amounts shown below. This analysis assumes that all other variables, in particular

foreign currency rates, remain constant.

Profit or loss100 bp

increase100 bp

decreaseGroup $’000 $’000

2012

Variable rate instruments (2,439) 2,439

2011

Variable rate instruments (2,485) 2,485

Company

2012

Variable rate instruments (350) 350

2011

Variable rate instruments (400) 400

Foreign currency risk

The foreign currency risk of the Group arises from sales and purchases that are denominated in a currency other

than Singapore dollars. The currencies giving rise to this risk are primarily Japanese Yen, United States dollars,

Euro, Thai Baht, Malaysian ringgit, Vietnam dong, Hong Kong dollars and the Australian dollars. Exposure to

foreign currency risk is monitored on an ongoing basis by the Group to ensure that the net exposure is at an

acceptable level.





Foreign currency risk (cont’d)

The Group aims to reduce the exposures of the net position in each currency by using foreign currency

borrowings in the respective foreign subsidiaries, and use external forward contracts with financial institution

where appropriate. With the exception of Tutt Bryant Group Limited which have their own Board-approved

policies and procedures to manage their foreign currency risks, all treasury transactions are approved and/or

executed by Group Treasury, whereby only authorised staff can transact with the banks on behalf of the Group.

The Group has established guidelines and procedures to manage its foreign currencies hedging policies. It

continuously monitors the exchange rates of the currencies concerned and enters into hedging contracts with

banks from time to time to reduce the adverse impact on the Group’s profitability.

The Group’s and the Company’s exposure to foreign currencies and the sensitivity to a 10% strengthening of

the respective functional currencies of the Group’s entities against the foreign currencies, are shown below. A

10% strengthening of the respective functional currencies of the Group’s entities against the foreign currencies

at the reporting date would increase/(decrease) equity and profit or loss by the amounts shown below. The

analysis assumes that all other variables, in particular interest rates, remain constant.

Singaporedollars

USdollars

Malaysian ringgit

Japanese Yen Euro

Australian dollars Thai Baht

Vietnam dong

Hong Kong

dollars Others Total

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

Group

2012

Trade and other

receivables 10,958 44,467 3,765 14,173 3,424 107 2,411 3,640 5,291 – 88,236

Cash and cash

equivalents 10,148 12,041 150 1,556 2,999 1,431 – – – 18 28,343

Trade and other

payables (10,944) (71,729) (744) (129,890) (21,906) (4,244) (4) – – (556) (240,017)

Forward

exchange

contracts

held – 302 – 56,969 13,397 – – – – – 70,668

Loan from

holding

company (6,924) (60,961) – – – – – – – – (67,885)

Loan to

subsidiaries 112 61,084 – – – – – – – – 61,196

Loans to

associates – 38 – – – – – – – – 38

Loans to joint

ventures – 113 – – – – – – – 1,246 1,359

3,350 (14,645) 3,171 (57,192) (2,086) (2,706) 2,407 3,640 5,291 708 (58,062)

Sensitivity

analysis

- income

statement (1,016) 1,492 (317) 5,719 209 271 (241) (364) (529) 54 5,278

Sensitivity

analysis -

equity 681 (27) – – – – – – – (125) 529






Singaporedollars

USdollars

Malaysian ringgit

Japanese Yen Euro

Australian dollars Thai Baht

Vietnam dong

Hong Kong

dollars Others Total

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

Group

2011

Trade and other

receivables 6,305 26,995 4,352 3,421 4 186 2,756 − 1,274 216 45,509

Cash and cash

equivalents 1,091 10,497 1 450 314 28 − − − 100 12,481

Trade and other

payables (4,827) (29,907) (948) (49,212) (1,663) (436) (3) − (6) (513) (87,515)

Forward

exchange

contracts

held − − − 14,839 2,165 − − − − − 17,004

Loan from

holding

company (3,384) (46,687) − − − − − − − − (50,071)

Loan to

subsidiaries 112 46,811 − − − − − − − − 46,923

Loans to

associates − 38 − − − − 26 − − − 64

Loans to joint

ventures − 114 − − − − − − − − 114

(703) 7,861 3,405 (30,502) 820 (222) 2,779 − 1,268 (197) (15,491)

Sensitivity

analysis

- income

statement (257) (758) (340) 3,050 (82) 22 (275) − (127) 20 1,253

Sensitivity

analysis -

equity 327 (28) − − − − (3) − − − 296






2012 2011US

dollarsAustralian

dollars TotalUS

dollarsAustralian

dollars Total$’000 $’000 $’000 $’000 $’000 $’000

Company

Loans to associates 38 – 38 38 – 38

Loans to joint ventures 113 – 113 114 – 114

Cash and cash equivalents 3 7 10 5 7 12

Trade and other payables – – – – (7) (7)

154 7 161 157 – 157

Sensitivity analysis (16) – (16) (16) – (16)

A 10% weakening of Singapore dollars against the above currencies would have had the equal but opposite

effect on the above currencies to the amounts shown above, on the basis that all other variables remain constant.

Recognised assets and liabilities

The fair value of forward exchange contracts used as economic hedges of monetary assets and liabilities in

foreign currencies as at 31 March 2012 is $1,520,000 (2011: $1,243,000) which has been recognised as fair

value derivative liabilities.

The fair value of interest rate swaps used as economic hedges as at 31 March 2012 is $765,000 (2011: $793,000)

which has been recognised as fair value derivative liabilities.

Estimation of fair values

The following summarises the significant methods and assumptions used in estimating the fair values of financial

instruments of the Group and the Company.

Derivatives

The fair value of forward exchange contracts is based on their listed market price, if available. If a listed market

price is not available, fair value is estimated by discounting the difference between the contractual forward

price and the current forward price for the residual period to maturity of the contract using a risk-free interest

rate (based on government bonds).

The fair value of interest rate swaps is based on broker’s quotes.


Fair value of financial liabilities, which is determined for disclosure purposes, is calculated based on the present

value of future principal and interest cash flows, discounted at the market rate of interest at the reporting date.

For finance leases, the market rate of interest is determined by reference to similar lease agreements.





Estimation of fair values (cont’d)

Intra-group financial guarantees

The value of financial guarantees provided by the Company to its subsidiaries is determined by reference to the

difference in the interest rates, by comparing the actual rates charged by the banks with these guarantees made

available, with the estimated rates that the banks would have charged had these guarantees not been available.

Other financial assets and liabilities

The carrying amounts of financial assets and liabilities with a maturity of less than one year (including trade

and other receivables, cash and cash equivalents, and trade and other payables) are assumed to approximate

their fair values because of the short period to maturity. All other financial assets and liabilities are discounted

to determine their fair values.

Financial instruments by category

Set out below is a comparison by category of carrying amounts of all the Group’s and the Company’s financial

instruments that are carried in the financial statements:

Assets


Available-for-sale financial assets Total Fair value

Group $’000 $’000 $’000 $’000

2012

Cash and cash equivalents 76,770 – 76,770 76,770

Trade and other receivables 173,729 – 173,729 173,729

Other financial investments – 115 115 115

250,499 115 250,614 250,614

2011

Cash and cash equivalents 61,813 – 61,813 61,813


Other financial investments – 201 201 201

194,392 201 194,593 194,593

Company

2012

Cash and cash equivalents 309 – 309 309


76,125 – 76,125 76,125

2011

Cash and cash equivalents 418 – 418 418


120,304 – 120,304 120,304





Financial instruments by category (cont’d)

Liabilities

Financial liabilities at amortised cost

Financial liabilities at fair value

through profit or loss Total Fair value

Group $’000 $’000 $’000 $’000

2012

Trade and other payables 281,747 2,285 284,032 284,032

Financial liabilities 455,955 – 455,955 441,194

737,702 2,285 739,987 725,226

2011

Trade and other payables 134,660 2,036 136,696 136,696


544,090 2,036 546,126 541,576

Company

2012

Trade and other payables 2,686 571 3,257 3,257


42,296 571 42,867 42,867

2011

Trade and other payables 2,155 367 2,522 2,522


46,541 367 46,908 46,908

Fair value hierarchy

The following defines the fair value hierarchy of financial instruments carried at fair value, by valuation method:

Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.

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).

Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).





Financial instruments by category (cont’d)

As at 31 March 2012, in order to determine the fair value of the forward exchange contracts and interest rate

swap, management had obtained independent valuation from banks, which was based on valuation techniques

in which significant inputs were based on observable market data. The forward exchange contracts and interest

rate swap were analysed as Level 2 as the inputs used for the valuation were based on observable market data.

Level 1 Level 2 Total

$’000 $’000 $’000

Group

2012

Derivative financial liabilities – 2,285 2,285

2011

Derivative financial liabilities – 2,036 2,036

27 OPERATING SEGMENTS

(a) Business segments

The Group has four reportable segments as described below, which are the Group’s strategic business

units. The strategic business units offer different products and services, and are managed separately

because they are located in different geographical areas and require different marketing strategies. For each

of the strategic business unit, the Group’s chief operating decision maker reviews internal management

reports on at least a quarterly basis. The following summary describes the operations in each of the

Group’s reportable segments:

Crane rental: The rental income of cranes.

Tower crane rental: The rental income of tower cranes.

General equipment rental: The equipment rental income of other construction equipment.

Distribution: The sales of cranes and other construction equipment, spareparts, and

provision of other ancilliary services.

Information regarding the results of each reportable segment is included below. Performance is measured

based on segment profit before income tax, as included in the internal management reports that are

reviewed by the Group’s chief operating decision maker. Segment profit is used to measure performance

as management believe that such information is the most relevant in evaluating the results of certain

segments relative to other entities that operate within these industries.




27 OPERATING SEGMENTS (CONT’D)

(a) Business segments (cont’d)

Information about reportable segments

Crane rental

Tower crane rental

General equipment

rental Distribution Total $’000 $’000 $’000 $’000 $’000

2012

Revenue and expenses

Total revenue from external customers 224,987 58,713 96,889 339,169 719,758

Inter-segment revenue 31,193 3,229 – 163,235 197,657

Total revenue 256,180 61,942 96,889 502,404 917,415

Results

Interest income 453 345 263 308 1,369

Depreciation expense (35,333) (12,143) (18,152) (3,321) (68,949)

Amortisation expense (236) (47) (199) (150) (632)

Reportable segment profit before

income tax 56,918 (13,390) 15,929 34,669 94,126

Share of profit of associates (net of tax) 2,500 – – 1,332 3,832

Share of loss of joint ventures (net of tax) (2,427) – – – (2,427)

Other material non-cash items:

- Allowance made for receivables (499) (2,499) (331) (293) (3,622)

- Allowance made for inventories – – – (250) (250)

- Gain/(Loss) on disposal of property,

plant and equipment 2,820 (15,749) 294 876 (11,759)

- Impairment loss on intangible assets (160) – – – (160)

- Inventories written off – – – (65) (65)

- Bargain purchase gain arising from

acquisition of a subsidiary 760 – – – 760

Other segment information

Reportable segment assets 633,253 183,232 134,122 316,891 1,267,498

Investment in associates 20,010 – – 43,375 63,385

Investment in joint ventures 2,279 – – – 2,279

22,289 – – 43,375 65,664

Capital expenditure 40,559 46,326 33,597 37,606 158,088

Reportable segment liabilities 44,383 14,768 10,490 218,504 288,145






Information about reportable segments

Crane rental

Tower crane rental

General equipment

rental Distribution Total $’000 $’000 $’000 $’000 $’000

2011

Revenue and expenses

Total revenue from external customers 184,918 57,178 69,708 272,384 584,188

Inter-segment revenue 36,558 1,905 – 97,206 135,669

Total revenue 221,476 59,083 69,708 369,590 719,857

Results

Interest income 767 117 383 357 1,624

Depreciation expense (29,106) (10,728) (15,536) (3,045) (58,415)

Amortisation expense (211) (28) (624) (22) (885)

Reportable segment profit before

income tax 31,031 10,058 5,285 22,296 68,670

Share of profit of associates (net of tax) 3,741 – – (2,394) 1,347

Share of loss of joint ventures (net of tax) (568) – – – (568)

Other material non-cash items:

- Allowance reversed/(made) for

receivables 916 – (306) 134 744

- Allowance made for inventories – – – (453) (453)

- Gain/(Loss) on disposal of property,

plant and equipment 2,251 (264) 149 1,107 3,243

- Impairment loss on intangible assets (4,916) – – – (4,916)

- Impairment loss on property, plant

and equipment (4,053) – – – (4,053)

- Inventories written off – – – (2,021) (2,021)

- Bargain purchase gain arising from

acquisition of a subsidiary 1,395 – – – 1,395

Other segment information

Reportable segment assets 456,699 195,671 118,659 295,965 1,066,994

Investment in associates 14,406 – – 46,143 60,549

Investment in joint ventures 6,176 – – – 6,176

20,582 – – 46,143 66,725

Capital expenditure 20,541 64,246 23,809 10,381 118,977

Reportable segment liabilities 22,884 22,389 8,046 94,606 147,925






Reconciliations of reportable segment profit or loss, assets and liabilities and other material items

2012 2011

$’000 $’000

Profit or loss

Total reportable segment profit before income tax 94,126 68,670

Elimination of inter-segment profits (8,254) (2,406)

Unallocated amounts:

- Other corporate expenses (29,293) (26,486)

Share of profits of associates (net of tax) 3,832 1,347

Share of losses of joint ventures (net of tax) (2,427) (568)

Consolidated profit before income tax 57,984 40,557

Assets

Total reportable segment assets 1,267,498 1,066,994

Investment in associates 63,385 60,549

Investment in joint ventures 2,279 6,176

Other unallocated assets 49,906 20,536

Consolidated total assets 1,383,068 1,154,255

Liabilities

Total reportable segment liabilities 288,145 147,925

Other unallocated liabilities 496,734 434,451

Consolidated total liabilities 784,879 582,376

(b) Geographical segments

ASEAN Australia

People’s Republic of

ChinaOther

regions Consolidated$’000 $’000 $’000 $’000 $’000

2012

Total revenue from external

customers 270,345 380,132 58,713 10,568 719,758

Non-current assets* 369,373 329,657 163,795 18,145 880,970

2011

Total revenue from external

customer 202,909 314,932 57,178 9,169 584,188

Non-current assets* 278,106 261,586 189,773 10,130 739,595

* Non-current assets exclude deferred tax assets.





(c) Major customers

There are no major customers who solely account for 10% or more of the Group’s revenue.

28 COMMITMENTS – GROUP

Operating lease commitments

As at 31 March 2012, the commitments of the Group for minimum lease payments under non-cancellable

operating leases are as follows:

2012 2011$’000 $’000

Within 1 year 13,453 9,307

Between 1 and 5 years 24,011 17,132

More than 5 years 14,559 14,916

52,023 41,355

The Group leases motor vehicles and a number of premises for production, warehouse and office purposes

under operating leases. The leases typically run for an initial period of two to forty-three years, with options to

renew the leases after that date. Lease payments are subject to increases annually to reflect market rentals.

None of the leases includes contingent rentals.

The Group leases out its plant and machinery (refer to note 4). Non-cancellable operating lease rentals are

receivable as follows:

2012 2011$’000 $’000

Within 1 year 45,593 24,118

Between 1 and 5 years 1,290 −

46,883 24,118

Capital commitments

Authorised cost not contracted for 29,966 −

Contracted for but not provided for 25,997 20,486




29 SIGNIFICANT RELATED PARTY TRANSACTIONS – GROUP

For the purposes of these financial statements, parties are considered to be related to the Group if the Group

has the ability, directly or indirectly, to control the party or exercise significant influence over the party in making

financial and operating decisions, or vice versa, or where the Group and the party are subject to common control.

Related parties may be individuals or other entities.

In addition to the related party information disclosed elsewhere in the financial statements, there were significant

related party transactions which were carried out in the normal course of business on terms agreed between

the parties during the financial year as follows:

2012 2011$’000 $’000

Transactions with companies in which certain directors of the

Company have substantial financial interests

Rental income receivable 3,275 1,831

Sales 8,174 6,690

Purchases 1,695 4

Hiring charges payable 7 1

Transactions with associates of the Group

Rental income receivable 682 1,965

Sales 351 8,372

Purchases 31,140 35,994

Hiring charges payable 105 144

Transactions with joint ventures of the Group

Rental income receivable 1,254 –

Hiring charges payable 578 –

Transactions with related parties

Rental income receivable 13,986 11,370

Hiring charges payable 2,305 220




30 SUBSEQUENT EVENTS

Incorporation of a subsidiary

On 4 May 2012, the Group incorporated an indirect wholly owned subsidiary, PT Tat Hong HeavyEquipment

Indonesia (“PTTHI”) in Jakarta, Indonesia. PTTHI has a registered share capital of US$1.0 million which will

be fully paid up from the Group’s internal cash resources. Its primary business activity is the distribution and

wholesale of machinery, equipment and supplies for the construction and mining industries in Indonesia.

Liquidation of a subsidiary

On 4 May 2012, the Group has completed its voluntary liquidation of a dormant indirect subsidiary, Tat Hong

HeavyEquipment Middle East LLC.

Grant of award of shares under the Performance Share Plan (“PSP”)

On 30 April 2012, the Shares Option/Performance Shares Plan Committee granted awards of shares under

the PSP totalling 384,000 shares of which 96,000 shares were vested on 30 April 2012 to be satisfied from the

Company’s holding of treasury shares.


As at 19 June 2012

ANALYSIS OF SHAREHOLDINGS

SHAREHOLDINGS STATISTICS

No of Issued Shares : 506,626,823

No of Treasury Shares : 1,865,000

Class of shares : Ordinary shares

Voting rights : On a show of hands: One vote for each member

: On a poll: 1 vote for each ordinary share

Range of Shareholdings No. of Shareholders % No. of Shares %

1 - 999 27 0.79 6,154 0.00

1,000 - 10,000 2,301 67.48 12,156,605 2.40

10,001 - 1,000,000 1,053 30.88 64,859,398 12.80

1,000,001 and above 29 0.85 429,604,666 84.80

TOTAL 3,410 100.00 506,626,823 100.00

SUBSTANTIAL SHAREHOLDERS

Name Direct Interest %* Deemed Interest %*

Ng San Tiong Roland – – 263,051,505 52.11

Ng Sun Ho Tony 6,006,130 1.19 253,643,660 50.25

Ng San Wee David 2,611,750 0.52 253,860,660 50.59

Ng Sun Giam Roger 792,500 0.16 253,511,160 50.22

Chwee Cheng & Sons Pte Ltd 222,176,160 44.00 31,335,000 6.21

Ng Chwee Cheng 34,364,000 6.81 19,789,646 3.92

* The percentage of shareholdings is computed based on the share capital of 504,761,823 shares which excludes 1,865,000 treasury shares

NOTES :

1. Pursuant to the terms of a trust deed dated 29 July 1997 (as supplemented by a deed dated 12 October 1998)

(the “Trust Deed”), Messrs Ng San Tiong Roland, Ng Sun Ho Tony, Ng San Wee David, the Directors and their

brother, Mr Ng Sun Giam Roger are joint trustees of the Chwee Cheng Trust, constituted under the Trust Deed,

which owns approximately 42.03% of the issued share capital of Chwee Cheng & Sons Pte Ltd. Under the

terms of the Trust Deed, the beneficiaries of the said trust are the sons of Mr Ng Chwee Cheng, namely, Messrs

Ng San Tiong Roland, Ng Sun Ho Tony, Ng Sun Hoe Patrick, Ng Sang Kuey Michael, Ng San Guan William,

Ng Sun Giam Roger, Ng San Wee David, Ng San Eng Sunny, Ng Sun Oh Lewis, and their descendants. Being

joint trustees, Messrs Ng San Tiong Roland, Ng Sun Ho Tony, Ng Sun Giam Roger and Ng San Wee David,

are deemed to be interested in the 253,511,160 shares (both direct and deemed) held by Chwee Cheng &

Sons Pte Ltd.

2. Ng San Tiong Roland is deemed interested in 8,996,095 shares held through nominees and 544,250 shares

held by his spouse.

3. Ng Sun Ho Tony is deemed interested in 132,500 shares held by his spouse.

4. Ng San Wee David is deemed interested in 349,500 shares held by his spouse.

5. Chwee Cheng & Sons Pte Ltd is deemed interested in 31,335,000 shares held through nominees.

6. Ng Chwee Cheng is deemed interested in 19,789,646 shares held through nominees.


As at 19 June 2012

ANALYSIS OF SHAREHOLDINGS

SHAREHOLDINGS HELD IN HANDS OF PUBLIC

Based on information available to the Company as at 19 June 2012, approximately 31.10% of the Company’s shares

listed on the Singapore Exchange Securities Trading Limited were held by the public. Therefore the Company has

complied with Rule 723 of the Listing Manual.

TOP 20 SHAREHOLDERS

S/No. Name of Shareholder No. of Shares %*

1 CHWEE CHENG & SONS PTE TLD 222,176,160 44.00

2 HSBC (SINGAPORE) NOMINEES PTE LTD 78,416,095 15.54

3 NG CHWEE CHENG 34,484,000 6.83

4 CITIBANK NOMINEES SINGAPORE PTE LTD 19,937,751 3.95

5 DBS NOMINEES PTE LTD 11,818,500 2.34

6 UNITED OVERSEAS BANK NOMINEES PTE LTD 6,700,000 1.33

7 NG SUN HO 6,006,130 1.19

8 PHILLIP SECURITIES PTE LTD 5,462,278 1.08

9 STARICH INVESTMENTS PTE LTD 4,140,000 0.82

10 NG SANG KUEY 3,565,350 0.71

11 BNP PARIBAS SECURITIES SERVICES SINGAPORE BRANCH 3,095,000 0.61

12 DBSN SERVICES PTE LTD 2,993,924 0.59

13 NG SUN ENG 2,726,328 0.54

14 NG SAN WEE 2,611,750 0.52

15 ONG TIEW SIAM 2,599,500 0.52

16 MAYBANK KIM ENG SECURITIES PTE LTD 2,403,500 0.48

17 DB NOMINEES (S) PTE LTD 2,334,000 0.46

18 NG SAN GUAN 2,255,908 0.45

19 CIMB SECURITIES (S) PTE LTD 1,964,368 0.39

20 DBS VICKERS SECURITIES (S) PTE LTD 1,947,000 0.39

TOTAL 417,637,542 82.74

* The percentage of shareholdings is computed based on the share capital of 504,761,823 shares which excludes 1,865,000 treasury shares


As at 19 June 2012

ANALYSIS OF WARRANTHOLDINGS

Range of Warrantholdings No. of Warrantholders % No. of Warrants %

1 - 999 2,012 63.69 734,488 1.45

1,000 - 10,000 967 30.61 2,101,726 4.15

10,001 - 1,000,000 172 5.45 14,792,446 29.20

1,000,001 and above 8 0.25 33,033,896 65.20

TOTAL 3,159 100.00 50,662,556 100.00

TOP 20 WARRANTHOLDERS

S/No. Name of Warrantholder No. of Warrants %

1 CHWEE CHENG & SONS PTE LTD 21,021,516 41.49

2 NG CHWEE CHENG 3,237,000 6.39

3 NG LIANG YEW 2,388,000 4.71

4 OCBC SECURITIES PTE LTD 1,992,400 3.93

5 DBS VICKERS SECURITIES (S) PTE LTD 1,190,100 2.35

6 HSBC (SINGAPORE) NOMINEES PTE LTD 1,105,300 2.18

7 NG TOONG SENG 1,050,000 2.07

8 CITIBANK NOMINEES SINGAPORE PTE LTD 1,049,580 2.07

9 LOH KAH WAI 949,000 1.87

10 NG SAN TIONG 791,509 1.56

11 NG SUN HO 600,613 1.19

12 TAN LEE-LIN 578,000 1.14

13 LEONG CHONG LING 508,800 1.00

14 PHILLIP SECURITIES PTE LTD 414,999 0.82

15 LAU WING CHOONG 380,000 0.75

16 NG SANG KUEY 356,535 0.70

17 LIM YOKE KIAN 328,500 0.65

18 CHEONG FOOK CHUN 305,000 0.60

19 DBSN SERVICES PTE LTD 296,851 0.59

20 DBS NOMINEES PTE LTD 261,800 0.52

TOTAL 38,805,503 76.58


NOTICEOF ANNUAL GENERAL MEETING

NOTICE IS HEREBY GIVEN that the Annual General Meeting of Tat Hong Holdings Ltd (“the Company”) will be held

at 18 Sungei Kadut Avenue Singapore 729489 on Friday, 27 July 2012 at 10.00 a.m. for the following purposes:

AS ORDINARY BUSINESS

1. To receive and adopt the Directors’ Report and the Audited Accounts of the Company and the Group for the

year ended 31 March 2012 together with the Auditors’ Report thereon. (Resolution 1)

2. To declare a final dividend of 1.5 Singapore Cents per share for the year ended 31 March 2012 (previous year:

0.5 Singapore Cents per share). (Resolution 2)

3. To re-elect the following Directors of the Company retiring pursuant to Article 113 of the Articles of Association

of the Company:

Mr Ng Sun Ho Tony (Resolution 3)

Mr Low Seow Juan (Resolution 4)

Mr Ong Tiew Siam (Resolution 5)

[See Explanatory Note (i)]

4. To re-appoint Mr Tan Chok Kian, a director of the Company retiring under Section 153(6) of the Companies Act,

Chapter. 50, to hold office from the date of this Annual General Meeting until the next Annual General Meeting

of the Company.

[See Explanatory Note (ii)] (Resolution 6)

5. To approve the payment of Directors’ fees of S$475,000 for the year ended 31 March 2012 (previous year: S$378,370).

[See Explanatory Note (iii)] (Resolution 7)

6. To re-appoint Messrs KPMG LLP as the Auditors of the Company and to authorise the Directors of the Company

to fix their remuneration. (Resolution 8)

7. To transact any other ordinary business which may properly be 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:

8. Authority to issue shares in the capital of the Company (excluding treasury shares) pursuant to Section 161

of the Companies Act, Cap. 50 and Rule 806 of the Listing Manual of the Singapore Exchange Securities

Trading Limited (the “SGX-ST”)

That pursuant to Section 161 of the Companies Act, Cap. 50 and Rule 806 of the Listing Manual of the 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

in pursuance of any Instrument made or granted by the Directors of the Company while this Resolution

was in force,

(the “Share Issue Mandate”)

provided that:

(1) the aggregate number of shares (including shares to be issued in pursuance of the Instruments, made

or granted pursuant to this Resolution) and Instruments to be issued pursuant to this Resolution 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), of which the aggregate

number of shares and Instruments to be issued other than on a pro rata basis to existing shareholders of

the Company shall not exceed twenty per centum (20%) of the total number of issued shares (excluding

treasury shares) in the capital of the Company (as calculated in accordance with sub-paragraph (2) below);

(2) (subject to such calculation as may be prescribed by the SGX-ST) for the purpose of determining the

aggregate number of shares and Instruments that may be issued under the sub-paragraphs above, the total

number of issued shares (excluding treasury shares) 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 consolidation or subdivision of shares;

(3) in exercising the Share Issue Mandate conferred by this Resolution, the Company shall comply with the

provisions of the Listing Manual of the SGX-ST for the time being in force (unless such compliance has

been waived by the SGX-ST) and the Articles of Association of the Company; and

(4) unless revoked or varied by the Company in a general meeting, the Share Issue Mandate shall continue

in force (i) until the conclusion of the next Annual General Meeting of the Company or the date by which

the next Annual General Meeting of the Company is required by law to be held, whichever is earlier or

(ii) in the case of shares to be issued in pursuance of the Instruments, made or granted pursuant to this

Resolution, until the issuance of such shares in accordance with the terms of the Instruments.

[See Explanatory Note (iv)] (Resolution 9)

9. Authority to issue shares under the Tat Hong Share Option Scheme 2006

That pursuant to Section 161 of the Companies Act, Cap. 50, the Directors of the Company be authorised and

empowered to offer and grant options under the Tat Hong Share Option Scheme 2006 (“the Scheme 2006”) and

to issue from time to time such number of shares in the capital of the Company as may be required to be issued

pursuant to the exercise of options granted by the Company under the Scheme 2006, whether granted during

the subsistence of this authority or otherwise, provided always that the total aggregate number of additional

ordinary shares to be issued pursuant to the Scheme 2006 and the Share Plan shall not exceed fifteen per

centum (15%) of the total number of issued shares (excluding treasury shares) in the capital of the Company

from time to time and that such authority shall, unless revoked or varied by the Company in a general meeting,

continue in force until the conclusion of the next Annual General Meeting of the Company or the date by which

the next Annual General Meeting of the Company is required by law to be held, whichever is earlier.

[See Explanatory Note (v)] (Resolution 10)



10. Authority to issue shares under the Tat Hong Performance Share Plan

That pursuant to Section 161 of the Companies Act, Cap. 50, the Directors of the Company be authorised

and empowered to offer and grant awards under the Tat Hong Performance Share Plan (“the Share Plan”)

and to issue from time to time such number of shares in the capital of the Company as may be required to be

issued pursuant to the vesting of awards under the Share Plan, whether granted during the subsistence of this

authority or otherwise, provided always that the total aggregate number of additional ordinary shares to be

issued pursuant to the Scheme 2006 and the Share Plan shall not exceed fifteen per centum (15%) of the total

number of issued shares (excluding treasury shares) in the capital of the Company from time to time and that

such authority shall, unless revoked or varied by the Company in a general meeting, continue in force until the

conclusion of the next Annual General Meeting of the Company or the date by which the next Annual General

Meeting of the Company is required by law to be held, whichever is earlier.

[See Explanatory Note (vi)] (Resolution 11)

11. Proposed renewal of shareholders’ mandate for Interested Person Transactions

That:-

(1) approval be and is hereby given for the Company, its subsidiaries and associated companies that are

entities at risk (as that term is used in Chapter 9 of the SGX-ST Listing Manual), or any of them to enter

into any of the transactions falling within the categories of Interested Person Transactions particulars

of which are set out in the appendix to this Notice of Annual General Meeting to Shareholders dated

12 July 2012 (the “Appendix”), with the Interested Persons as described in the Appendix, provided

that such transactions are made on normal commercial terms in accordance with the guidelines and

procedures for review and administration of Interested Person Transactions as described in the Appendix

(the “Shareholders’ IPT Mandate”);

(2) the Shareholders’ IPT Mandate shall, unless revoked or varied by the Company in general meeting,

continue to be in force until the conclusion of the next Annual General Meeting of the Company;

(3) the Audit Committee of the Company be and is hereby authorised to take such action as it deems proper

in respect of procedures and/or to modify or implement such procedures as may be necessary to take

into consideration any amendment to Chapter 9 of the SGX-ST Listing Manual which may be prescribed

by SGX-ST from time to time; and

(4) the Directors of the Company be and are hereby authorised and empowered to complete and to do all

such acts and things, and to approve, modify, ratify and execute such documents, acts and things as

they may consider necessary, desirable or expedient to give effect to the Shareholders’ IPT Mandate and

this Resolution.

[See Explanatory Note (vii)] (Resolution 12)

By Order of the Board

Lional Tseng / Ong Beng Hong

Joint Company Secretaries

Singapore

12 July 2012



Explanatory Notes:

(i) Mr Ng Sun Ho Tony will, upon re-election as Deputy Managing Director of the Company, remain as a member

of the Share Options/Performance Shares Plan Committee.

Mr Low Seow Juan 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.

Mr Ong Tiew Siam will, upon re-election as a Director of the Company, remain as a member of the Share Options/

Performance Shares Plan Committee and will be considered non-independent.

(ii) The effect of the Ordinary Resolution 6 above; is to re-appoint a Director of the Company who is over 70 years

of age. Mr Tan Chok Kian will, upon re-appointment as a Director of the Company, remain as Chairman of

the Board, Chairman of the Nominating Committee and member of the Audit Committee, the Remuneration

Committee and the Risk Management Committee, and will be considered independent.

(iii) The Company will disregard any votes cast on this resolution by non-executive Directors who are eligible to

be paid fees. However, the Company need not disregard a vote if it is cast by a person as proxy for a person

who is entitled to vote, in accordance with the directions on the proxy form, or it is cast by the person who is

entitled to vote, in accordance with the discretions on the proxy form to vote as the proxy decides provided

that the person entitled to vote excludes any non-executive Director that is eligible to be paid fees.

(iv) The Ordinary Resolution 9 above, if passed, will empower the Directors of the Company from the date of this

Meeting until the date of the next Annual General Meeting of the Company, or the date by which the next Annual

General Meeting of the Company is required by law to be held 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, 50%

of the total number of issued shares (excluding treasury shares) in the capital of the Company, of which up to

20% may be issued other than on a pro-rata basis to such persons as the Directors of the Company may in

their absolute discretion deem fit.

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 Ordinary 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 Ordinary Resolution is

passed and any subsequent consolidation or subdivision of shares.

(v) The Ordinary Resolution 10 above, if passed, will empower the Directors of the Company, from the date of this

Meeting until the next Annual General Meeting of the Company, or the date by which the next Annual General

Meeting of the Company is required by law to be held or such authority is varied or revoked by the Company in

a general meeting, whichever is the earlier, to issue shares in the Company pursuant to the exercise of options

granted or to be granted under the Scheme 2006 provided always that the total aggregate number of additional

ordinary shares to be issued pursuant to the Scheme 2006 and the Share Plan does not exceed in total (for the

entire duration of the Scheme 2006) fifteen per centum (15%) of the total number of issued shares (excluding

treasury shares) in the capital of the Company from time to time.



(vi) The Ordinary Resolution 11 above, if passed, will empower the Directors of the Company, from the date of this

Meeting until the next Annual General Meeting of the Company, or the date by which the next Annual General

Meeting of the Company is required by law to be held or such authority is varied or revoked by the Company in

a general meeting, whichever is the earlier, to issue shares in the Company pursuant to the vesting of awards

under the Share Plan provided always that the total aggregate number of additional ordinary shares to be issued

pursuant to the Share Plan and the Scheme 2006 does not exceed in total (for the entire duration of the Share

Plan) fifteen per centum (15%) of the total number of issued shares (excluding treasury shares) in the capital of

the Company from time to time.

(vii) The Ordinary Resolution 12 above, if passed, will renew the mandate given by the shareholders of the Company

to allow the Company, its subsidiaries and associated companies or any of them to enter into any of the

transactions falling within the categories of Interested Person Transactions as defined in Chapter 9 of the

SGX-ST Listing Manual. Please refer to the Appendix for further details.

Notes:

1. A Member entitled to attend and vote at the Annual General Meeting (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. If the appointer is a corporation, the instrument of proxy must be executed under seal or the hand of its duly authorised officer or attorney.

3. The instrument appointing a proxy must be deposited at the Registered Office of the Company at 18 Sungei Kadut Avenue Singapore 729489

not less than forty-eight (48) hours before the time appointed for holding the Meeting.


PROXY FORM(Please see notes overleaf before completing this Form)

TAT HONG HOLDINGS LTDCompany Registration No. 199105392H

(Incorporated In The Republic of Singapore)

IMPORTANT:

1. For investors who have used their CPF monies to buy Tat Hong Holdings Ltd’s shares,

this Report is forwarded to them at the request of the CPF Approved Nominees

and is sent solely FOR INFORMATION ONLY.

2. This Proxy Form is not valid for use by CPF investors and shall be ineffective for all

intents and purposes if used or purported to be used by them.

3. CPF investors who wish to attend the Meeting as an observer must submit their

requests through their CPF Approved Nominees within the time frame 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,

of

being a member/members of Tat Hong Holdings Ltd (the “Company”), hereby appoint:

Name NRIC/Passport No. Proportion of Shareholdings

No. of Shares %

Address

and/or (delete as appropriate)

Name NRIC/Passport No. Proportion of Shareholdings

No. of Shares %

Address

or failing the person, or either or both of the persons, referred to above, the Chairman of the Meeting as my/our

proxy/proxies to vote for me/us on my/our behalf at the Annual General Meeting (the “Meeting”) of the Company to

be held at 18 Sungei Kadut Avenue Singapore 729489 on Friday, 27 July 2012 at 10.00 a.m. and at any adjournment

thereof. I/We direct my/our proxy/proxies to vote for or against the Resolutions proposed at the Meeting as indicated

hereunder. If no 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

1 Directors’ Report and Audited Financial Statements for the year ended 31 March 2012

2 Payment of a proposed final dividend of 1.5 Singapore Cents per Share for the financial

year ended 31 March 2012

3 Re-election of Mr Ng Sun Ho Tony as a Director

4 Re-election of Mr Low Seow Juan as a Director

5 Re-election of Mr Ong Tiew Siam as a Director

6 Re-appointment of Mr Tan Chok Kian as a Director

7 Approval of Directors’ fees amounting to S$475,000 for the financial year ended 31 March 2012

8 Re-appointment of Messrs KPMG LLP as Auditors

9 Authority to allot and issue new Shares

10 Authority to allot and issue Shares under the Tat Hong Share Option Scheme 2006

11 Authority to allot and issue Shares under the Tat Hong Performance Share Plan

12 Renewal of Shareholders’ Mandate for Interested Person Transactions

Dated this day of 2012

Signature of Shareholder(s)

or, Common Seal of Corporate Shareholder

Total number of Shares in: No. of Shares

(a) CDP Register

(b) Register of Members

Notes:

1. Please insert the total number of Shares held by you. If you have Shares entered against your name in the

Depository Register (as 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 a meeting of the Company is entitled to appoint one

or two proxies to attend and vote in his/her stead. A proxy need not be a member of the Company.

3. Where a member appoints more than one proxy, he shall specify the proportion of his shareholding to be

represented by each proxy. If no such proportion or number is specified the first named proxy may be treated

as representing one hundred per cent (100%) of the shareholding and any subsequent named proxy as an

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 18

Sungei Kadut Avenue Singapore 729489 not less than 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 48 hours

before the time appointed for holding the Meeting, as certified by The Central Depository (Pte) Limited to the Company.

18 Sungei Kadut Avenue Singapore 729489T (65) 6269 0022F (65) 6269 6888

www.tathong.com.sg

Documents

ANNUAL REPORT 2012 - listed companytathong.listedcompany.com/misc/ar2012.pdfANNUAL REPORT 2012 01. ... of predictable, recurring income. ... equipment maintenance and overhaul, steel