TIONG WOON CORPORATION HOLDING LTDtiongwoon.listedcompany.com/misc/ar2001.pdf · 4 Chairman’s Statement ... 61 Notice of Annual General Meeting 63 Proxy Form. 1 CORPORATE PROFILE

TIONG WOON CORPORATION HOLDING LTD

CO

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1 C o r p o r a t e P r o f i l e

2 C o r p o r a t e I n f o r m a t i o n

4 C h a i r m a n ’s S t a t e m e n t

7 O p e r a t i o n s R e v i e w

1 3 F i n a n c i a l S t a t e m e n t s

6 1 N o t i c e o f A n n u a l G e n e r a l M e e t i n g

6 3 P r o x y Fo r m

1

C O R P O R AT E P R O F I L E

Tiong Woon Corporation Holding Ltd started

as a partnership in 1978 to provide crane and transport services to the

construction industry in Singapore. The Group has since come a long way

and today, it is a leading integrated specialist in heavy lift, heavy haulage

and marine transportation with a total fleet of more than 300 units of heavy

lift and heavy haulage equipment, including tug boats and barges.

The Group currently operates with five subsidiaries in Singapore: Tiong Woon

Crane & Transport Pte Ltd., Tiong Woon Marine Pte Ltd, Tiong Woon Training

Centre Pte Ltd (formerly known as Tiong Woon Engineering Pte Ltd), Tiong

Woon Enterprise Pte Ltd and Grande Engineering Construction Pte Ltd. In

the region, the Group has one subsidiary each in Malaysia (Tiong Woon Crane

& Transport (M) Sdn Bhd), Indonesia (PT. Tiong Woon Indonesia) and the

Philippines (Tiong Woon Philippines, Inc).

2

“ f o c u s o n c o n t i n u o u s p e r s o n n e l t r a i n i n g a n d

d e v e l o p m e n t t o p r o v i d e c u s t o m e r s w i t h e f f i c i e n t ,

r e l i a b l e a n d q u a l i t y s e r v i c e s ”

Ang

Kah

Hon

g

Ang

Kha

King

Won

g Ki

ng K

heng

Tan

Swee

Khi

mCh

andr

a M

ohan

s/o

Ret

hnam

/ C O R P O R A T E I N F O R M A T I O N

3

CorporateInformationBOARD OF DIRECTORS

Ang Kah Hong (Chairman & Managing Director)

Ang Kha King (Executive Director)

Tan Swee Khim (Executive Director)

Wong King Kheng (Director)

Chandra Mohan s/o Rethnam (Director)

COMPANY SECRETARIES

Choong Mee Fong, ACIS

Foo Soon Soo, FCIS

REGISTERED OFFICE

No 13 & 15 Pandan Crescent

Singapore 128470

Tel : 261 7888 Fax : 777 4544

SHARE REGISTRAR

Barbinder & Co Pte Ltd

8 Cross Street

#11-00 PWC Building

Singapore 048424

AUDITORS

PricewaterhouseCoopers

Certified Public Accountants

Partner-in-charge : Yeoh Oon Jin

PRINCIPAL BANKERS

The Development Bank of Singapore Ltd

ABSA Bank Limited

United Overseas Bank Limited

C O R P O R A T E I N F O R M A T I O N / 3

4 / C H A I R M A N ’ S S T A T E M E N T

“ w e w i l l s t r i v e t o m a i n t a i n o u r c o m p e t i t i v e n e s s

a n d s u s t a i n , i f n o t i m p r o v e t h e G r o u p ’s

p r o f i t a b i l i t y b y s t r e a m l i n i n g o u r o p e ra t i o n s a n d

l e v e r a g i n g o n o u r s t r e n g t h s a n d c o r e c o m p e t e n c e

i n h e a v y l i f t , h e a v y h a u l a g e a n d m a r i n e

t r a n s p o r t a t i o n ”

5

C H A I R M A N ’ S S TAT E M E N T

I am pleased to report that Tiong Woon Corporation Holding Ltd continued to perform profitably during the

financial year under review despite unfavourable economic conditions in many of the markets we operate in.

The local construction industry, which contracted 4.5 per cent in 2000, is unlikely to see the anticipated

recovery this year as the Singapore economy falters with contractions in the first two quarters of 2001. The

regional markets have not performed any better either and hopes for a quick economic recovery following the

Asian economic crisis have proven shortlived.

The Group faced stiff competition and price erosion for its services both domestically as well as regionally.

However, Tiong Woon managed to turn in a positive performance by adopting a prudent and conservative

approach to mitigate the impact of these negative factors.

BusinessStrategiesAlthough the year under review has been a difficult one, the Group moved steadily ahead with its strategy of

regional expansion and reducing its reliance on the local construction industry by focusing on other niche

markets such as power plants, refineries and infrastructure projects.

Some specific corporate developments included the implementation of an equipment replenishment programme,

investing in higher capacity cranes (notably the Demag CC6400 with a 1,000 ton lift capacity) and the setting

up a training center for crane operators.

The Group has also been actively replacing its older equipment with newer ones to compete effectively in the

market and increase customer satisfaction. In addition, we have restructured our fleet in line with our strategy

of expanding our markets to include the non-construction sectors in the region by acquiring various units of

higher capacity cranes.

These bigger cranes, ranging from 150 ton to 1,000 ton, are well suited for the type of projects we are aiming

for in the region such as petrochemical plants, power plants and infrastructure work. We will continue with this

replenishment and upgrading programme of our equipment fleet in the coming years.

Our acquisition of the Demag CC6400 crawler crane, the largest Demag crane in Southeast Asia with 1,000

ton lift capacity, marks an important milestone for the Group. The purchase of this world-class equipment will

open the doors to international markets for Tiong Woon and allow us to compete globally. With our

complementary services in road haulage and marine transportation, this crane will enable us to provide one-

stop integrated heavy lift and haulage services to new geographical markets.

C H A I R M A N ’ S S T A T E M E N T / 5

6

The equipment replenishment exercise and crane acquisition have resulted in high depreciation and financing

costs which have put pressure on our profitability during the year under review. However, the Group is confident

these strategic investments will pay off in the years to come.

ProspectsWe expect FY2002 to be a difficult year due to the slower growth, both domestically and regionally. In anticipation

of this, we will strive to maintain our competitiveness and sustain, if not improve the Group’s profitability by

streamlining our operations and leveraging on our strengths and core competence in heavy lift, heavy haulage

and marine transportation.

To achieve this, we intend to continue pursuing the following strategies:

❖ Diversify out of the building and construction industry to serve other sectors such as petrochemicals,

refineries and power plants;

❖ Look for opportunities to offer our heavy lift and heavy haulage services to new geographical markets;

❖ Work towards being ISO 9002 certified by offering consistently high quality services and customer support;

❖ Improve productivity by reviewing our operations and work processes to reduce wastage; and

❖ Expand our customer base of loyal and long term clients by providing one-stop integrated solutions for

their lifting and haulage requirements

Although the road ahead will not be easy, we remain optimistic about our mid to long-term outlook and our

growth prospects in the coming years.

Mr Ang Kah Leong, a director of the company, passed away on 20 April 2001. He has been with the company

since its incorporation and his contribution to the Group has been invaluable. The Board would like to extend

its deepest condolences and sympathy to the members of his family. Mr Ang Kah Leong will be sorely missed

by the Board, management and staff.

On behalf of the Board, I would like to thank the management and staff for their continued dedication and hard

work, without which, Tiong Woon would not have overcome the numerous challenges it faced during the year.

I would also like to express our sincere appreciation to our customers and business associates for their kind

support and last but not least, to our shareholders, who have placed their trust in us. We look forward to your

continuing support.

Ang Kah HongChairman & Managing Director

7 November 2001

/ C H A I R M A N ’ S S T A T E M E N T6

7

“ t h e G r o u p h a s b e e n a b l e t o r e a p

t h e b e s t b e n e f i t s f r o m a n

e x t r e m e l y c h a l l e n g i n g m a r k e t ”

O P E R A T I O N S R E V I E W / 7

8

O P E R AT I O N S R E V I E W

The business environment we operate in remains tough as the local and regional economies continue to suffer

from the hangover of the regional economic crisis. The construction industry, which is our mainstay, is still in

the doldrums and this has put pressure on the Group’s margins as well as its operational performance.

The virtually stagnant growth in the local construction industry, which has slowed down in line with the

contraction of the overall economy, has created a very competitive and hostile environment. This has forced

operators in the industry to cut prices for the services they offer and led to an erosion of the Group’s income.

Put Up APositive PerformanceTiong Woon has however remained resilient and managed to achieve a marginal profit despite the negative

market conditions. The Group achieved a turnover of $40.40 million for the financial year ended 30 June 2001,

which was 20 % higher compared to the previous financial year, while pre-tax profit stood at $ 0.8 million.

The Group’s management will continue to take a long term view in its planning and strategies. In anticipation of

the adverse market conditions, Tiong Woon has devised plans and strategies to mitigate the impact of these

negative factors.

Tiong Woon has also restructured its operations and streamlined its equipment fleet to enhance its

competitiveness and capture a bigger share of the market. In this way, the Group has been able to reap the

best benefits from an extremely challenging market.

The main strategies implemented by the Group include:

❖ Constant replenishing and upgrading of our equipment fleet to ensure that customers get the most reliable

and best quality equipment;

❖ Restructuring our inventory mix to focus on the most strategic categories of equipment in line with market

demand; and

❖ Downsizing those equipment categories which are less productive and in low demand by the market.

By taking note of changing market conditions and adapting ourselves accordingly, Tiong Woon has been able to

remain actively involved in the industry and clinch several projects to supply equipment to public and private

sector clients, both locally and in the region.

/ O P E R A T I O N S R E V I E W8

9O P E R A T I O N S R E V I E W /

Lifting of 60 tons Tank

9

In Singapore, one of the major projects that the Group has been actively participating in is the HDB upgrading

project. Tiong Woon has entered into several term contracts with its clients to supply cranes and transport

services for the latters’ various HDB upgrading contracts.

Tiong Woon has successfully completed its contracts for the Mei Ling Street, Bendemeer/Whampoa, Ang Mo Kio

Ave 3 and Tanjong Rhu projects. The current ongoing project works are Commonwealth Crescent, Boon Lay,

Toa Payoh, Jalan Bukit Merah, Bedok South, Telok Blangah and other upgrading works.

The Group has exhibited its professionalism, capability and reliability by providing qualified engineers and

workers, as well as a fleet of certified equipment of various capacities to satisfy both statutory and clients’

exacting requirements.

Tiong Woon is also actively involved in the supply of equipment for various pharmaceutical and wafer plant

construction projects such as the Wyeth, Pfizer and Schering Plough pharmaceutical plants as well as the

Toshiba Wafer Plant in Tampines and the proposed UMC Wafer Plant at Pasir Ris.

1 0 / O P E R A T I O N S R E V I E W

In addition, the Group has been supplying heavy-duty equipment to clients in shipbuilding and repair as well as

offshore marine activities such as the fabrication of jackets and modules.

Regionally, some of the major projects the Group has participated in include the LNG Debottlenecking project

in Brunei; the Cakawala Field Development works in Penang, Malaysia; the Kelanittissa Power Plant project in

Sri Lanka; and the Metromanila Transit project in Manila, Philippines.

In the Brunei LNG Debottlenecking project, the Group provided a total integrated services package which

included receiving the equipment shipped from overseas at the Singapore port, supplying the cranes, providing

the transport services (both land and sea) to deliver the equipment to the work site, dismantling the old driers

as well as erection and installation of new driers. Each drier weigh more than 120 tons.

The Group successfully completed two such LNG Debottlenecking projects in August 2000 and April 2001

respectively, with each project completed in a duration of 45 days. These projects highlight Tiong Woon’s

capabilities in providing one-stop integrated heavy lift and heavy haulage services.

The Cakawala Field Development works in Penang, Malaysia, was awarded in October 2000. The project involved

supplying various units of heavy-duty cranes for the fabrication of several units of jackets, top-sides and

modules which are used in the construction of offshore oil rigs. The highlight of this project was the Group’s

successful lift of the heaviest item, weighing more than 400 tons, by deploying the tandem-lift technique. In

tandem lift, several cranes are deployed simultaneously to lift a bulky and heavy item, and position it to specified

orientation and location.

BRUNEI – Debottlenecking projectBLNG Train 4

1 1O P E R A T I O N S R E V I E W /

In March 2001, the Group has, for the first time, successfully clinched the transportation

project for the Kelanittissa Power Plant in Colombo, Sri Lanka. In this project,

Tiong Woon was required to ship a series of multi-axle modular hydraulic trailers to

Sri Lanka for several months; to discharge the equipment comprising generators and

transformers at Colombo port and provide land haulage to transport the equipment

(the heaviest weighing 150 tons) to the Power Plant site.

“ s u c c e s s f u l l y c l i n c h e d t h e

t r a n s p o r t a t i o n p r o j e c t f o r t h e

Ke l a n i t t i s s a P o w e r P l a n t i n

C o l o m b o , S r i L a n k a ”

1 1

1 2

At about the same time, the Group was awarded a project to lift and erect stadium light towers in Maldives. In

this project, we mobilized an LTM 1160, which is a 160 ton mobile crane with a 60 m telescopic boom, via a landing

craft vessel (which was wholly chartered) to Maldives, and erected four units of stadium lightings of 45 m

height each.

In the Philippines, the Group supplied various units of hydraulic and rough terrain cranes to the Metromanila

Transit project in Manila. This project commenced in the previous fiscal year and continued into the fiscal year

under review. It is expected to be completed in February 2002.

Towards the close of the fiscal year, the Group acquired one of the world’s largest lifting machine – the Demag

CC6400 crawler crane which has a lifting capacity of 1,000 tons. The crane has been deployed to Pulau Seraya

and is currently involved in a Power Plant project which was secured towards the end of the fiscal year. In this

project, the Group supplied the transportation and lifting services of various heavy and oversized equipment.

The Demag CC6400 is a world class piece of equipment and the Group believes that its acquisition will enable

Tiong Woon to become an international player, able to compete on the world stage for specialized lifting work.

Together with our marine and land haulage capabilities, it will provide a synergistic boost to our aim of becoming

a one-stop provider of heavy lift and heavy haulage services.

Lifting & Erection of 45m Height StadiumLight Tower at Maldives – March 2001

/ O P E R A T I O N S R E V I E W

FINANCIAL STATEMENTSFor the financial year ended 30 June 2001

Contents

Page

Directors’ Report 14

Statement by Directors 19

Auditors’ Report 20

Income statements 22

Balance Sheets 23

Consolidated Statement of Changes in Equity 25

Statement of Changes in Equity 26

Consolidated Cash Flow Statement 27

Notes to the Financial Statements 29

Shareholders’ Information 56

Corporate Governance 59

1 4 / T I O N G W O O N C O R P O R A T I O N H O L D I N G L T D A N D I T S S U B S I D I A R I E S

DIRECTORS’ REPORTFor the financial year ended 30 June 2001

The directors present their report to the members together with the audited financial statements of the Company and of the Group for

the financial year ended 30 June 2001.

Directors

The directors of the Company at the date of this report are:

Ang Kah Hong

Ang Kha King

Tan Swee Khim

Wong King Kheng

Chandra Mohan s/o Rethnam

Principal activities

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

disclosed in Note 16 to the financial statements.

Results for the financial year

The consolidated profit after tax attributable to the members of the Company for the financial year was $680,867 (2000: $2,643,588).

The Company made a loss after tax for the financial year of $273,158 (2000: profit after tax of $627,382).

Material transfers to or from reserves and provisions

Material transfers to or (from) reserves during the financial year were as follows:

The Group The Company$ $

Transfer to foreign currency translation reserve 86,762 —

Material movements in provisions are set out in the notes to the financial statements.

T I O N G W O O N C O R P O R A T I O N H O L D I N G L T D A N D I T S S U B S I D I A R I E S / 1 51 5 / T I O N G W O O N C O R P O R A T I O N H O L D I N G L T D A N D I T S S U B S I D I A R I E S


Acquisition and disposal of subsidiaries

During the financial year, the Company increased its interest in the subsidiary, Grande Engineering Construction Pte Ltd to 95% by

the acquisition of additional 5% interest for a cash consideration of $5,000. The share of net tangible assets of subsidiary acquired

was $5,980 at the acquisition date.

There were no acquisitions or disposals of interests in subsidiaries during the financial year.

Issue of shares and debentures

There were no issues of shares or debentures by any corporation in the Group during the financial year.

Arrangements to enable directors to acquire shares and debentures

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

enable the directors of the Company to acquire benefits by means of an acquisition of shares in, or debentures of, the Company or

any other body corporate.

Directors’ interests in shares or debentures

The interests of the directors holding office at the end of the financial year in the share capital of the Company and related

corporations, as recorded in the register of directors’ shareholdings, were as follows:

Holdings registered in name of Holdings in which a directordirector or nominee is deemed to have an interest

At At At At30.6.2001 30.6.2000 30.6.2001 30.6.2000

The Company

(Ordinary shares of $0.10 each)

Ang Kah Hong 8,565,000 8,565,000 115,153,940 114,805,940

Ang Kha King 7,765,000 7,765,000 115,153,940 114,805,940

Tan Swee Khim 3,431,000 3,431,000 — —

Wong King Kheng 30,000 30,000 — —

Chandra Mohan s/o Rethnam 30,000 30,000 — —

At the balance sheet date, Ang Kah Hong and Ang Kha King have 5,990,298 and 2,995,149 ordinary shares of $1 each respectively in

the ultimate holding company Ang Choo Kim & Sons (Pte) Limited. Their deemed interest in the Company through Ang Choo Kim &

Sons (Pte) Limited is shown above.



Dividends

Dividends paid since the end of the Company’s preceding financial year are as follows:

$

A final dividend of 2.7% per ordinary shares, net of tax at 25.5%, was paid on 24 November 2000

in respect of the financial year ended 30 June 2000 as proposed in the Directors’ Report for that financial year. 452,690

Bad and doubtful debts

Before the financial statements of the Company were made out, the directors took reasonable steps to ascertain the action taken in

relation to the writing off of bad debts and providing for doubtful debts of the Company, and have satisfied themselves that all known

bad debts of the Company have been written off and that adequate provision has been made for doubtful debts.

At the date of this report, the directors are not aware of any circumstances which would render any amounts written off for bad debts

or provided for doubtful debts in the Group inadequate to any substantial extent.

Current assets

Before the financial statements of the Company were made out, the directors took reasonable steps to ascertain that current assets

which were unlikely to realise their book values in the ordinary course of business have been written down to their estimated

realisable values or that adequate provision has been made for the diminution in value of such current assets.

At the date of this report, the directors are not aware of any circumstances, not otherwise dealt with in this report, which would

render the values attributed to current assets in the consolidated financial statements misleading.

Charges on assets and contingent liabilities

At the date of this report, no charges have arisen since the end of the financial year on the assets of the Company or any corporation

in the Group which secure the liability of any other person, nor have any contingent liability arisen since the end of the financial year

in the Company or any other corporation in the Group.



Ability to meet obligations

No contingent or other liability of the Company or any other corporation in the Group has become enforceable or is likely to become

enforceable within the period of twelve months after the end of the financial year which, in the opinion of the directors, will or may

substantially affect the ability of the Company and the Group to meet its obligations as and when they fall due.

Other circumstances affecting the financial statements

At the date of this report, the directors are not aware of any circumstances not otherwise dealt with in this report or the consolidated

financial statements which would render any amount stated in the financial statements of the Company and the consolidated financial

statements misleading.

Unusual items

In the opinion of the directors, the results of the operations of the Company and of the Group during the financial year have not been

substantially affected by any item, transaction or event of a material and unusual nature except for the change in accounting policy

as stated in Note 3 to the financial statements.

Unusual items after the financial year

In the opinion of the directors, no item, transaction or event of a material and unusual nature has arisen in the interval between the

end of the financial year and the date of this report which would affect substantially the results of the operations of the Company and

of the Group for the financial year in which this report is made.

Directors’ contractual benefits

Since the end of the previous financial year, no director has received or become entitled to receive a benefit (other than as disclosed

in the consolidated financial statements and in this report) 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.

Remuneration

The total remuneration paid to the executive directors and employees who are related to the controlling shareholders amounting to

S$884,249, exceeded 15% of the profit before taxation of the Group for the financial year ended 30 June 2001.



Audit Committee

The Audit Committee carried out its functions in accordance with Section 201B(5) of the Companies Act, including review of audit

plans and scope of external auditors, discussions of external auditors’ findings and a review of the financial statements of the

Company and of the Group for the financial year and the auditors’ report thereon.

The Audit Committee has nominated PricewaterhouseCoopers for re-appointment as auditors of the Company at the forthcoming

Annual General Meeting.

Share options

There were no options granted during the financial year to subscribe for unissued shares of the Company or its subsidiaries.

No shares have been issued during the financial year by virtue of the exercise of options to take up unissued shares of the Company

or its subsidiaries.

There were no unissued shares in the Company or its subsidiaries under option at the end of the financial year.

Auditors

The auditors, PricewaterhouseCoopers have expressed their willingness to accept re-appointment.

On behalf of the directors

ANG KAH HONG ANG KHA KING

Chairman & Managing Director Executive Director

7 November 2001


STATEMENT BY DIRECTORS

In the opinion of the directors, the financial statements set out on pages 22 to 55 are drawn up so as to give a true and fair view of

the state of affairs of the Company and of the Group at 30 June 2001 and of the results of the business, and changes in equity, of

the Company and of the Group and the cash flows of the Group for the financial year then ended, and at the date of this statement

there are reasonable grounds to believe that the Company will be able to pay its debts as and when they fall due.

On behalf of the directors

ANG KAH HONG ANG KHA KING

Chairman & Managing Director Executive Director

7 November 2001


AUDITORS’ REPORT TO THE MEMBERS OF TIONG WOON CORPORATION HOLDING LTD

We have audited the financial statements of Tiong Woon Corporation Holding Ltd and the consolidated financial statements of the

Group for the financial year ended 30 June 2001 set out on pages 22 to 55. These financial statements are the responsibility of the

Company’s directors. 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 plan and perform our

audit to obtain reasonable assurance whether the financial statements are free of material misstatement. An audit includes

examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes

assessing the accounting principles used and significant estimates made by the directors, as well as evaluating the overall financial

statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion,

(a) the accompanying financial statements of the Company and consolidated financial statements of the Group are properly drawn

up in accordance with the provisions of the Singapore Companies Act (“Act”) and Singapore Statements of Accounting Standard

and so as to give a true and fair view of:

(i) the state of affairs of the Company and of the Group at 30 June 2001, the results and changes in equity of the Company

and of the Group, and the cash flows of the Group for the financial year ended on that date; and

(ii) the other matters required by section 201 of the Act to be dealt with in the financial statements of the Company and the

consolidated financial statements of the Group; and

(b) the accounting and other records, and the registers 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.

We have considered the financial statements and auditors’ report of the subsidiaries of which we have not acted as auditors, being

financial statements included in the consolidated financial statements. The names of the subsidiaries are stated in note 16 to the

financial statements.


AUDITORS’ REPORT TO THE MEMBERS OF TIONG WOON CORPORATION HOLDING LTD

We are satisfied that the financial statements of the subsidiaries that have been consolidated with the financial statements of the

Company are in form and content appropriate and proper for the purposes of the preparation of the consolidated financial statements

and we have received satisfactory information and explanations as required by us for those purposes.

The auditors’ reports on the financial statements of the subsidiaries were not subject to any qualification and in respect of

subsidiaries incorporated in Singapore did not include any comment made under section 207(3) of the Act.

PricewaterhouseCoopers

Certified Public Accountants

Singapore

7 November 2001


INCOME STATEMENTSFor the financial year ended 30 June 2001

The Group The CompanyNotes 2001 2000 2001 2000

$ $ $ $

Sales 4 40,404,130 33,538,037 — —

Cost of sales (31,473,529) (23,610,350) — —

Gross profit 8,930,601 9,927,687 — —

Other operating income 2,005,071 2,128,815 — 1,000,000

Administrative expenses (1,347,170) (724,728) (261,040) (143,976)

Other operating expenses (7,513,799) (6,404,662) (12,118) (6,720)

Operating profit/(loss) 5 2,074,703 4,927,112 (273,158) 849,304

Finance income 6 18,290 26,653 — 6,393

Finance costs 7 (1,499,210) (1,226,562) — —

Exceptional item 3 203,580 — — —

Profit/(loss) before tax 797,363 3,727,203 (273,158) 855,697

Tax 10 (125,425) (1,078,706) — (228,315)

Profit/(loss) from ordinary activities 671,938 2,648,497 (273,158) 627,382

Minority interest 24 8,929 (4,909) — —

Net profit/(loss) 680,867 2,643,588 (273,158) 627,382

Earnings per share – basic 11 0.30 cents 1.38 cents

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

Auditors’ Report – Page 20.


BALANCE SHEETSAs at 30 June 2001


$ $ $ $

Current assets

Cash and cash equivalents 12 225,687 744,163 4,977 3,687

Receivables 13 15,051,345 13,494,309 — 10

Inventories 14 358,919 313,936 — —

Other current assets 15 618,463 545,346 26,685 26,685

16,254,414 15,097,754 31,662 30,382

Non-current assets

Subsidiaries 16 — — 27,138,822 27,746,414

Property, plant and equipment 17 53,603,421 39,273,561 — —

Deferred expenditure 18 31,817 — — —

Goodwill 19 7,638 10,184 — —

53,642,876 39,283,745 27,138,822 27,746,414

Total assets 69,897,290 54,381,499 27,170,484 27,776,796

Current liabilities

Trade and other payables 20 5,381,925 4,530,138 146,919 480,073

Provisions 21 224,275 540,802 — —

Borrowings 22 10,801,173 4,070,526 — —

16,407,373 9,141,466 146,919 480,073

Non-current liabilities

Borrowings 22 17,631,715 9,845,027 — —

Deferred tax 10 3,772,504 3,888,504 — —

21,404,219 13,733,531 — —

Total liabilities 37,811,592 22,874,997 146,919 480,073

Net assets 32,085,698 31,506,502 27,023,565 27,296,723


BALANCE SHEETS (continued)As at 30 June 2001


$ $ $ $

Share capital and reserves

Share capital 23 22,505,094 22,505,094 22,505,094 22,505,094

Share premium 4,629,787 4,629,787 4,629,787 4,629,787

Foreign currencies translation

reserve (420,929) (334,167) — —

Retained earnings/(Accumulated losses) 5,371,746 4,690,879 (111,316) 161,842

Interests of shareholders of the Company 32,085,698 31,491,593 27,023,565 27,296,723

Minority interests 24 — 14,909 — —

32,085,698 31,506,502 27,023,565 27,296,723




CONSOLIDATED STATEMENT OF CHANGES IN EQUITYFor the financial year ended 30 June 2001

Foreigncurrency

Share Share translation Retainedcapital premium reserve earnings Total

$ $ $ $ $

Balance at 1 July 2000 22,505,094 4,629,787 (334,167) 4,690,879 31,491,593

Currency translation differences — — (86,762) — (86,762)

Net profit for the financial year — — — 680,867 680,867

Balance at 30 June 2001 22,505,094 4,629,787 (420,929) 5,371,746 32,085,698

Balance at 1 July 1999 3 — (133,660) 14,681,072 14,547,415

Issue of share capital 22,505,091 5,380,000 — — 27,885,091

Costs associated with initial public

offering exercise — (750,213) — — (750,213)

Currency translation differences — — (200,507) — (200,507)

Capitalisation of reserve pursuant to

restructuring exercise — — — (12,181,091) (12,181,091)

Net profit for the financial year — — — 2,643,588 2,643,588

Dividend for 2000 — — — (452,690) (452,690)

Balance at 30 June 2000 22,505,094 4,629,787 (334,167) 4,690,879 31,491,593




STATEMENT OF CHANGES IN EQUITY – COMPANYFor the financial year ended 30 June 2001

(Accumulatedlosses)/

Share Share Retainedcapital premium earnings Total

$ $ $ $

Balance at 1 July 2000 22,505,094 4,629,787 161,842 27,296,723

Net loss for the financial year — — (273,158) (273,158)

Balance at 30 June 2001 22,505,094 4,629,787 (111,316) 27,023,565

Balance at 1 July 1999 3 — (12,850) (12,847)

Issue of share capital 22,505,091 5,380,000 — 27,885,091

Costs associated with initial public

offering exercise — (750,213) — (750,213)

Net profit for the financial year — — 627,382 627,382

Dividend for 2000 — — (452,690) (452,690)

Balance at 30 June 2000 22,505,094 4,629,787 161,842 27,296,723




CONSOLIDATED CASH FLOW STATEMENTFor the financial year ended 30 June 2001

Notes 2001 2000$ $

Cash flows from operating activities

Profit before tax 797,363 3,727,203

Adjustments for:

Depreciation and amortisation 8,087,664 6,498,761

Interest income (18,290) (26,653)

Interest expense 1,499,210 1,226,562

Gain on disposal of property, plant and equipment (1,418,657) (1,380,052)

Fixed assets written off 40,640 15,562

Provision for drydocking written back (203,580) —

Exchange difference (20,821) 29,400

Operating cash flow before working capital changes 8,763,529 10,090,783

Changes in operating assets and liabilities, net of effects from

purchase of controlled entity

Receivables (1,557,036) (2,436,424)

Inventories (44,984) (73,636)

Other assets (104,934) 401,508

Accounts payable 851,785 (877,472)

Cash generated from operations 7,908,360 7,104,759

Income tax paid (359,392) (522,752)

Interest paid (1,499,210) (1,226,562)

Net cash from operating activities 6,049,758 5,355,445


CONSOLIDATED CASH FLOW STATEMENT (continued)For the financial year ended 30 June 2001

Notes 2001 2000$ $

Cash flows from investing activities

Payments for property, plant and equipment (5,787,455) (1,717,419)

Payment for purchase of subsidiary, net of cash acquired (5,000) (36,006)

Interest received 18,290 26,653

Proceeds from sale of property, plant and equipment 3,379,452 1,722,435

Net cash outflow from investing activities (2,394,713) (4,337)

Cash flows from financing activities

Net proceeds from issue of shares — 6,009,787

Proceeds from borrowings — —

Repayment of borrowings (871,049) (7,169,722)

Repayment of lease liabilities (6,459,497) (5,360,960)

Contribution from minority shareholders — 10,000

Net cash outflow from financing activities (7,330,546) (6,510,895)

Net (decrease)/increase in cash held (3,675,501) (1,159,787)

Cash at the beginning of the financial year 648,443 1,808,230

Cash at the end of the financial year 12 (3,027,058) 648,443




NOTES TO THE FINANCIAL STATEMENTSFor the financial year ended 30 June 2001

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

1. General

The Company is domiciled and incorporated in Singapore and is listed on the Singapore Exchange. The address of the

Company’s registered office is

No. 13 &15 Pandan Crescent

Singapore 128470

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

disclosed in Note 16 to the financial statements.

2. Significant accounting policies

(a) Basis of preparation

The financial statements are prepared in accordance with the historical cost convention.

The financial statements are prepared in accordance with and comply with Singapore Statements of Accounting Standard.

The financial statements are expressed in Singapore dollars.

(b) Basis of consolidation

The consolidated financial statements include the financial statements of the Company and all its subsidiaries made up to the

end of the financial year. The results of subsidiaries acquired or disposed of during the financial year are included in or

excluded from the consolidated income statement from the date of their acquisition or disposal. Intercompany balances and

transactions and resulting unrealised profits are eliminated in full on consolidation. When necessary, accounting policies for

subsidiaries have been changed to ensure consistency with the policies adopted by the Group.

Goodwill represents the excess of the fair value of the consideration given over the fair value of the identifiable net assets of

subsidiaries when acquired. Goodwill is amortised on a straight-line basis, through the consolidated income statement over its

useful economic life of 5 years. Goodwill which is assessed as having no continuing economic value is written off to the

consolidated income statement.



2. Significant accounting policies (continued)

(c) Foreign currencies

Transactions in foreign currencies during the financial year are converted to Singapore dollars at the rates of exchange

prevailing on the transaction dates. Foreign currency monetary assets and liabilities are translated into Singapore dollars at the

rates of exchange prevailing at the balance sheet date or at contracted rates where they are covered by forward exchange

contracts. Exchange differences arising are taken to the income statements.

For the purpose of consolidation of foreign subsidiaries, the balance sheets are translated into Singapore dollars at the

exchange rates prevailing at the balance sheet date, and the results are translated using the average exchange rates for the

financial year. The exchange difference arising on translation of foreign subsidiaries, are taken directly to the foreign currency

translation reserve. On disposal, these translation differences are recognised in the consolidated income statement as part of

the gain or loss on sale.

(d) Revenue recognition

Turnover represents the gross invoiced value of services rendered and goods delivered.

Revenue from the sale of goods is recognised upon delivery to customers.

Revenue from the rendering of services is recognised upon completion of services.

Rental income is recognised on an accrual basis.

Dividend income is recorded gross in the income statements in the accounting period in which the dividend is declared payable

by the investee company or, in the case of subsidiaries, in respect of which it is proposed.

Interest income is accrued on a day to day basis.




(e) Taxation

Tax expense is determined on the basis of tax effect accounting using the liability method. Deferred taxation is provided on

significant timing differences arising from the different treatments in accounting and taxation of relevant items except where it

can be demonstrated with reasonable probability that the tax deferral will continue for the foreseeable future.

In accounting for timing differences, deferred tax assets are not recognised unless there is reasonable expectation of their

realisation.

(f) Cash and cash equivalents

For the purpose of the cash flow statement, cash and cash equivalents comprise cash in hand, deposits held at call with

banks, net of bank overdrafts and revolving credit facilities.

(g) Trade debtors

Trade debtors are carried at anticipated realisable value. Bad debts are written off and specific provisions are made for those

debts considered to be doubtful. General provisions are made on the balance of trade debtors to cover unexpected losses

which have not been specifically identified.

(h) Inventories

Inventories are stated at the lower of cost and net realisable value. Cost is calculated on a first in first out basis and includes

all costs in bringing the inventories to their present location and condition.

Provision is made where necessary for obsolete, slow-moving and defective inventories.

(i) Subsidiaries

Investments in subsidiaries are stated in the financial statements at cost less provision. Provision is made in recognition of a

diminution in the value of the investments which is other than temporary, determined on an individual investment basis.

(j) Property, plant and equipment

All property, plant and equipment are recorded at cost less depreciation and less any writedown for impairment, where

applicable.




(k) Depreciation of property, plant and equipment

Depreciation is calculated on a straight line basis to write off the cost of property, plant and equipment over their expected

useful lives. The rates of depreciation are as follows:

Leasehold land and buildings 5% or remaining life of lease, whichever is shorter

Machinery

- less than 5 years old (when acquired) 5% - 10%

- 5 years to 10 years old (when acquired) 5% - 14%

- more than 10 years old (when acquired) 20%

Tug boats and barges 10%

Office equipment 10% - 20%

Furniture and fixtures 10%

Office renovation 20%

Motor vehicles 10% - 20%

(l) Accounting for leases

A distinction is made between finance leases which effectively transfer from the lessor to the lessee substantially all the risks

and benefits incidental to the ownership of the leased assets, and operating leases under which the lessor effectively retains

substantially all such risks and benefits.

Finance leases are capitalised at the estimated present value of the underlying lease payments. Each lease payment is

allocated between the liability and finance charges so as to achieve a constant rate of return on the balance outstanding. The

corresponding rental obligations, net of finance charges, are included in other long-term payables. The interest element of the

finance charge is charged to the income statements over the lease period. Plant and equipment acquired under finance leasing

contracts is depreciated over the useful life of the asset.

Operating lease payments are charged to the income statements on a straight line basis over the period of the lease.

(m) Deferred expenditure

Deferred expenditure comprise drydocking and special survey expenditure which is capitalised and amortised to the income

statement in equal amounts till the next estimated drydocking or survey, which is estimated to be over a period of one to five

years.



3. Changes in accounting policy

In the previous financial year, an annual provision for drydocking and special survey expenditure (which are incurred once in

every one to five years) is charged against the results of each financial year, leading up to the drydocking or special survey.

With effect from 1 July 2000, the Group has adopted a policy which requires drydocking and special survey expenditure to be

capitalised and amortised to the income statement in equal amounts till the next estimated drydocking or survey, which is

estimated to be over a period of one to five years. This change will result in a more appropriate presentation of drydocking and

survey costs in the Group’s financial statements.

The effect of the change in accounting policy is to increase the net profit before tax for the current financial year by S$203,580.

This change in accounting policy is not applied retrospectively as the amount of any resulting adjustment that relates to prior

periods is not reasonably determinable.

4. Revenue

The Group The Company2001 2000 2001 2000

$ $ $ $

Services rendered 28,698,983 29,671,063 — —

Sales of cranes and equipment 10,721,349 2,737,292 — —

Storage income 719,573 809,475 — —

Miscellaneous sales 264,225 320,207 — —

Sales 40,404,130 33,538,037 — —

Dividends received/receivable — — — 1,000,000

Interest received/receivable 18,290 26,653 — 6,393

40,422,420 33,564,690 — 1,006,393



5. Operating profit/(loss)


$ $ $ $

Operating profit/(loss) is arrived at after:

Charging:

Auditors’ remuneration

– Auditors of the Company 90,165 73,176 35,000 26,300

– Other auditors 2,184 2,497 — —

Fees for non-audit services by auditors of the Company 76,106 65,954 27,782 19,285

Depreciation of property, plant and equipment

– Leasehold buildings 234,208 231,050 — —

– Leasehold land 15,833 15,833 — —

– Machinery 6,581,291 5,037,331 — —

– Tug boats and barges 1,006,723 995,501 — —

– Office equipment 129,125 106,056 — —

– Furniture and fixtures 10,755 10,419 — —

– Office renovation 18,248 3,211 — —

– Motor vehicles 87,838 96,814 — —

Property, plant and equipment written off 40,640 15,562 — —

Amortisation of goodwill 2,546 2,546 — —

Amortisation of drydocking expenses 1,097 — — —

Directors’ remuneration

– Company

– Fees 80,000 80,000 80,000 80,000

– Other remuneration 648,359 629,539 — —

– Subsidiaries

– Fees 2,184 — — —

– Other remuneration 118,771 — — —

Provision for doubtful trade debts 759,673 — — —

Net foreign exchange loss — 210,156 — —

Rental expense – operating leases 1,125,922 1,094,697 — —



5. Operating profit/(loss) (continued)


$ $ $ $

Provision for diminution in value of investments — — 95,000 —

And crediting:

Provision for doubtful debts written back 225,610 53,300 — —

Gain on disposal of property,

plant and equipment 1,418,657 1,380,052 — —

Provision for dry docking written back — 25,565 — —

Net foreign exchange gain 35,721 — — 53

6. Finance income


$ $ $ $

Interest income

– Fixed deposits 14,091 25,558 — 6,393

– Others 4,199 1,095 — —

18,290 26,653 — 6,393



7. Finance costs


$ $ $ $

Interest expense

– Finance lease 1,212,812 952,226 — —

– Bank loans 182,113 369,698 — —

– Bank overdraft 98,186 27,570 — —

– Trust receipt 3,213 226 — —

– Others 2,886 3,417 — —

– Adjustment for interest on convertible bonds — (126,575) — —

1,499,210 1,226,562 — —

8. Remuneration of directors of the Company

2001 2000

Number of directors of the Company in remuneration bands:

Below $250,000 6 6

Total 6 6



9. Staff costs


$ $ $ $

Wages and salaries 9,827,216 9,105,680 — —

Employers’ contribution to Central Provident Fund 893,170 631,347 — —

Foreign workers levy 102,195 101,540 — —

10,822,581 9,838,567 — —

Number of persons employed at the end of the financial year:


Full time 330 326 — —

10. Tax

(a) Tax expense


$ $ $ $

Tax expense attributable to profit is made up of:

Current income tax

Singapore 205,092 257,700 — 228,315

Foreign 35,425 89,829 — —

Deferred tax 295,436 819,158 — —

535,953 1,166,687 — 228,315



10. Tax (continued)

(a) Tax expense (continued)


$ $ $ $

Under/(over) provision in prior financial years

– Current tax 908 (36,160) — —

– Deferred tax (411,436) (51,821) — —

125,425 1,078,706 — 228,315

The income tax expense on the results of the Group for the year is higher than the amount of income tax determined by

applying the Singapore standard rate of income tax to profit before taxation due to losses and capital allowances available to

certain subsidiary companies which cannot be offset against the profits of other group companies, higher tax rates applicable to

certain overseas subsidiary companies and non-deductible expenses.

(b) Movements in provision for deferred tax


$ $ $ $

Balance at the beginning of the financial year 3,888,504 3,121,167 — —

Provision for the year 295,436 819,158 — —

Overprovision in prior financial year (411,436) (51,821) — —

Balance at the end of the financial year 3,772,504 3,888,504 — —



11. Earnings per share

The Group2001 2000

$ $

Profit after tax attributable to members of Tiong Woon Corporation Holding Ltd 680,867 2,643,588

Weighted average number of ordinary shares in issue for basic earnings per share 225,050,940 191,139,159

Basic earnings per share is calculated by dividing the profit after tax attributable to shareholders by the weighted average

number of ordinary shares in issue during the financial year.

12. Cash and cash equivalents


$ $ $ $

Cash at bank and on hand 225,687 706,557 4,977 3,687

Deposits, at call — 37,606 — —

225,687 744,163 4,977 3,687

For the purposes of the consolidated cash flow statement, the year end consolidated cash and cash equivalents comprise the

following:

Cash and bank (as above) 225,687 744,163

Less: Bank overdrafts (Note 22) (2,952,745) (95,720)

Revolving credit facilities (Note 22) (300,000) —

Cash and cash equivalents per consolidated

cash flow statement (3,027,058) 648,443



13. Receivables


$ $ $ $

Trade debtors 16,778,884 14,788,919 — —

Less: Provision for doubtful debts (1,895,375) (1,350,664) — —

Sundry debtors 167,836 56,054 — 10

15,051,345 13,494,309 — 10

Movements in provision for doubtful debts are as follows:

Balance at the beginning of the financial year 1,350,664 1,646,016 — —

Provision made during the financial year 759,673 — — —

Bad debts written off against provision (4,504) (245,565) — —

Provision written back (225,610) (53,300) — —

Translation difference 15,152 3,513 — —

Balance at the end of the financial year 1,895,375 1,350,664 — —

Included in the trade debtors of the Group is $21,129 (2000: $21,793) receivable from companies in which some of the directors

have substantial interests.

14. Inventories

The Group2001 2000

$ $

Inventories comprise:

Cranes held for sale, at cost 225,285 225,285

Spare parts, at cost 133,634 88,651

358,919 313,936



15. Other current assets


$ $ $ $

Tax recoverable — 9,923 26,685 26,685

Deposits 57,376 64,111 — —

Advances to staff 59,593 9,763 — —

Prepayments 501,494 461,549 — —

618,463 545,346 26,685 26,685

16. Subsidiaries

The Company2001 2000

$ $

Unquoted equity shares, at cost 14,220,092 14,215,092

Less: Provision for diminution in value of investment (95,000) —

14,125,092 14,215,092

Amount owing by subsidiaries (non-trade) 13,013,730 13,531,322

27,138,822 27,746,414



16. Subsidiaries (continued)

Name of company/ Principal Country ofCountry of incorporation activities business Equity holding Cost of investment

2001 2000 2001 2000% % $ $

Tiong Woon Crane & Hiring out of Singapore 100 100 8,447,674 8,447,674Transport Pte Ltd (Singapore) cranes and

transport

Tiong Woon Marine Pte Ltd Provision of Singapore 100 100 3,529,412 3,529,412(Singapore) wharfing and

stevedoringservices, hiringof cranes, andconstruction andsale of barges

Tiong Woon Enterprise Sales of Singapore 100 100 1,622,153 1,622,153Pte Ltd (Singapore) cranes and

transport

Tiong Woon Training Centre Provision of Singapore 100 100 525,852 525,852Pte Ltd (Formerly known as training,Tiong Woon Engineering Pte consultancyLtd) (Singapore) services and

investmentholding company

Tiong Woon Crane & Hiring out of Malaysia 100 100 1 1Transport (M) Sdn Bhd* cranes and(Malaysia) transport

P.T. Tiong Woon Indonesia Hiring out of Indonesia 100 100 — —@ (Indonesia) cranes and

transport

Tiong Woon Philippines, Hiring out of Philippines 100 100 — —Inc**@ (Philippines) cranes and

transport



16. Subsidiaries (continued)

Name of company/ Principal Country ofCountry of incorporation activities business Equity holding Cost of investment

2001 2000 2001 2000% % $ $

Grande Engineering Carrying on the Singapore 95 90 95,000 90,000Construction Pte Ltd business of(Singapore) mixed

construction

14,220,092 14,215,092

* Company audited by a member firm of PricewaterhouseCoopers** Company audited by another public accounting firm@ Wholly-owned subsidiary of Tiong Woon Training Centre Pte Ltd



17. Property, plant and equipment

Leasehold Leasehold Tug boats Off ice Furniture & Off ice Motorbuildings land Machinery and barges equipment fixtures renovation vehicles Total

$ $ $ $ $ $ $ $ $

The Group

Cost

At 1 July 2000 4,620,997 316,667 60,190,281 12,212,524 1,180,677 126,123 65,200 985,953 79,698,422

Additions 162,928 — 23,714,706 176,889 148,872 10,208 133,500 131,208 24,478,311

Disposals — — (3,971,595) (150,000) (191,238) — — (40,801) (4,353,634)

Exchange rate

adjustments — — (122,405) — 1,046 321 (2,193) 2,498 (120,733)

At 30 June 2001 4,783,925 316,667 79,810,987 12,239,413 1,139,357 136,652 196,507 1,078,858 99,702,366

Accumulated depreciation

At 1 July 2000 (497,421) (95,000)(31,851,585) (6,646,452) (653,450) (81,188) (55,305) (544,460)(40,424,861)

Depreciation

charge (234,208) (15,833) (6,581,291) (1,006,723) (129,125) (10,755) (18,248) (87,838) (8,084,021)

Disposals — — 2,129,941 31,250 150,596 — — 40,412 2,352,199

Exchange rate

adjustments (101) — 61,629 — (2,173) (411) 1,045 (2,251) 57,738

At 30 June 2001 (731,730) (110,833)(36,241,306) (7,621,925) (634,152) (92,354) (72,508) (594,137)(46,098,945)

Net book value

At 30 June 2001 4,052,195 205,834 43,569,681 4,617,488 505,205 44,298 123,999 484,721 53,603,421

Net book value

At 30 June 2000 4,123,576 221,667 28,338,696 5,566,072 527,227 44,935 9,895 441,493 39,273,561



17. Property, plant and equipment (continued)

(a) During the financial year, the Group acquired property, plant and equipment with an aggregate cost of $24,478,311 of which

$13,690,856 was acquired by means of finance leases and $5,000,000 by means of bank loans.

(b) At the balance sheet date, the net book value of machinery of the Group under finance leases amounted to $25,879,154 (2000:

$16,571,420).

(c) At the balance sheet date, the net book value of tug boats and barges of the Group pledged as security for term loans (Note

22) amounted to $1,993,000 (2000: $2,318,500).

(d) At the balance sheet date, the net book value of machinery of the Group pledged as security for bank loans (Note 22)

amounted to $8,911,162 (2000: Nil).

(e) At the balance sheet date, the net book value of tug boats and barges of the Group under a sale and purchase agreement

amounted to $nil (2000: $240,000).

(f) The leasehold buildings are located at No. 13 and 15 Pandan Crescent, Singapore 128470.

18. Deferred expenditures

The Group2001 2000

$ $

Drydocking expenses capitalised during the financial year 32,914 —

Amortisation for the financial year (Note 5) (1,097) —

Unamortised balance at the end of the financial year 31,817 —



19. Goodwill

The Group2001 2000

$ $

Goodwill arising from acquisition of subsidiary 10,184 12,730

Amortisation for the financial year (2,546) (2,546)

Balance at the end of the financial year 7,638 10,184

Cost 12,730 12,730

Accumulated amortisation (5,092) (2,546)

7,638 10,184

20. Trade and other payables


$ $ $ $

Trade creditors 3,353,244 2,382,271 — —

Other creditors 968,119 674,580 43,377 5,560

Accrued operating expenses 780,125 854,178 103,542 21,823

Deposits received 280,437 122,669 — —

Dividends — 452,690 — 452,690

Obligations under sale and purchase agreement — 43,750 — —

5,381,925 4,530,138 146,919 480,073

Included in other creditors of the Group is $32,776 (2000: $45,325) payable to directors. The balances due to directors are

unsecured, interest free and have no fixed repayment terms.



21. Provisions


$ $ $ $

Current tax (Note 10) 224,275 337,222 — —

Provision for drydocking — 203,580 — —

224,275 540,802 — —

Movements in the provision for

drydocking are as follows:

Balance at the beginning of the financial year 203,580 229,145 — —

Provision written back due to change in

accounting policy (Note 3) (203,580) — — —

Provision written back (Note 5) — (25,565) — —

Balance at the end of the financial year — 203,580 — —

22. Borrowings

(a) Current

The Group2001 2000

$ $

Bank overdrafts (Note 12) 2,952,745 95,720

Revolving credit facilities (Note 12) 300,000 —-

Term loans 658,337 616,993

Bank loans 1,000,000 —-

Lease liabilities (Note 26) 5,890,091 3,357,813

10,801,173 4,070,526



22. Borrowings (continued)

(b) Non-current

The Group2001 2000

$ $

Term loans 689,652 1,352,045

Bank loans 3,750,000 —-

Lease liabilities (Note 26) 13,192,063 8,492,982

17,631,715 9,845,027

(c) Details of the Group’s borrowings are as follows:

(i) Bank loans amounting to $4.75 million, bearing interest at cost of funds + 2% p.a. are repayable over 19 equal quarterly

instalments of $250,000 each, which fall due for payment between 29 September 2001 and 29 March 2006. The bank

loans are secured by a first legal charge over the Group’s machinery (Note 17) and a corporate guarantee from the

Company amounting to $4.75 million (2000: Nil). The interest rate charged during the financial year is about 5% p.a.

(2000: Nil).

(ii) Term loans from finance companies are secured by way of mortgage on three of the Group’s barges and two of the

Group’s tug boats as well as assignment of insurances and assignment of earnings on these vessels. Term loans

amounting to $261,420 (2000: $398,435) are further secured by a corporate guarantee from the Company amounting to

$261,420. The loans are repayable by monthly instalments over a period of 12 to 42 months. The interest rate charged

during the financial year ranged from 2.6% to 7.875% (2000: 3.625% to 7.5%) p.a..

(iii) Interest charged on the loan of $300,000 drawn under revolving credit facilities ranged between 4.22% to 4.92% p.a.

during the financial year. Revolving credit facilities are secured by corporate guarantee from the Company amounting to

$300,000 (2000: Nil).

(iv) The overdrafts are secured by a corporate guarantee from the Company amounting to $5.75 million (2000: $4.7 million).



23. Share capital

The Group and the Company2001 2000

$ $

Authorised:

300,000,000 ordinary shares of $0.10 each 30,000,000 30,000,000

Issued and fully paid:

225,050,940 ordinary shares of $0.10 each 22,505,094 22,505,094

24. Minority interests

The Group2001 2000

$ $

At the beginning of the financial year 14,909 —

Acquisition of new subsidiary — 10,000

Acquisition of additional shares in existing subsidiary (5,980) —

Share of (loss)/profit after tax of subsidiary (8,929) 4,909

— 14,909

25. Ultimate holding corporation

The Company’s ultimate holding corporation is Ang Choo Kim & Sons (Pte) Limited, incorporated in Singapore.



26. Lease liabilities

The Group2001 2000

$ $

Not later than one financial year 6,861,173 4,035,587

Later than one financial year but not later than five financial years 14,372,205 9,321,073

Later than five financial years 13,976 —

Minimum lease payments 21,247,354 13,356,660

Less: Future finance charges (2,165,200) (1,505,865)

Provided for in the financial statements 19,082,154 11,850,795

Representing lease liabilities:

Current [Note 22(a)] 5,890,091 3,357,813

Non-current [Note 22(b)] 13,192,063 8,492,982

19,082,154 11,850,795

The liabilities are secured on the property, plant and equipment acquired under finance leases (Note 17) as well as assignment

of insurances. Included in the above is an amount of $2,517,268 (2000: $2,002,580) which is further secured by a corporate

guarantee from the Company.

27. Contingent liabilities

The Company has the following contingent liabilities at 30 June 2001:

(i) Corporate guarantees amounting to $16.25 million (2000: $13.4 million) given to banks for facilities extended to certain

subsidiary companies of which the amount utilised at 30 June 2001 was $3,252,745 (2000: $95,720).

(ii) Corporate guarantees amounting to $2,517,268 (2000: $2,002,580) in favour of finance companies for hire purchase

facilities given to certain subsidiary companies.



27. Contingent liabilities (continued)

(iii) Corporate guarantees amounting to $5,011,420 (2000: $398,435) in favour of banks for bank loans and term loans (Note

22) given to certain subsidiary companies.

The Group has the following contingent liabilities at 30 June 2001:

(i) Letter of indemnity amounting to $120,000 (2000: $85,000) extended to insurance companies for guarantees given to the

Controller of Immigration over employment of certain foreign workers.

28. Commitments for expenditure

(a) Capital commitments

Capital commitments not provided for in the financial statements:

The Group2001 2000

$ $

Expenditure for property, plant and equipment, contracted for — 430,000

(b) Lease commitments

Commitments in relation to non-cancellable operating leases contracted for at the reporting date but not recognised as

liabilities, are payable as follows:

The Group2001 2000

$ $

Not later than one financial year 1,055,904 1,094,688

Later than one financial year but not later than five financial years 4,692,909 4,378,752

Later than five financial years 9,679,124 10,125,864

15,427,937 15,599,304



29. Related party transactions

In addition to the related party information disclosed elsewhere in the financial statements, the following related party

transactions took place between the Group and related parties during the financial year at terms agreed by the parties

concerned:

The Group2001 2000

$ $

Payment to companies in which certain directors have substantial interests:

Rental of cranes 93,592 12,759

Received from companies in which certain directors have substantial interests:

Rental of cranes 95,447 36,904

30. Segment information

(a) Primary report format – business segments

Heavy lift Marine Engineering& haulage transportation services Trading Others Group

$ $ $ $ $ $

2001

Revenues 24,278,357 3,889,567 1,559,057 10,676,349 800 40,404,130

Segment result 2,009,290 169,564 (481,517) 406,216 (28,850) 2,074,703

Finance income 18,290

Finance costs (1,499,210)

Exceptional item 203,580

Profit before tax 797,363

Tax (125,425)

Group profit from ordinary activities 671,938

Minority interest 8,929

Net profit 680,867



30. Segment information (continued)

(a) Primary report format – business segments (continued)

Heavy lift Marine Engineering& haulage transportation services Trading Others Group

$ $ $ $ $ $

Segment assets 61,801,117 6,216,545 624,583 1,227,494 27,551 69,897,290

Segment liabilities 33,702,057 3,141,558 340,905 602,501 24,571 37,811,592

Capital expenditure 24,103,380 372,825 9,194 730 25,096 24,511,225

Depreciation and amortisation 7,049,996 1,021,543 12,232 580 3,313 8,087,664

2000

Revenues 23,683,250 5,356,645 1,760,850 2,737,292 — 33,538,037

Segment result 3,852,753 784,586 174,280 115,493 — 4,927,112

Finance income 26,653

Finance costs (1,226,562)

Profit before tax 3,727,203

Tax (1,078,706)

Group profit from ordinary activities 2,648,497

Minority interest (4,909)

Net profit 2,643,588

Segment assets 45,816,865 6,831,521 438,122 1,294,991 — 54,381,499

Segment liabilities 18,392,275 4,253,857 128,054 100,811 — 22,874,997

Capital expenditure 6,978,949 71,950 47,370 — — 7,098,269

Depreciation and amortisation 5,486,933 1,006,757 4,525 546 — 6,498,761




(a) Primary report format – business segments (continued)

The Group is organised into four main business segments:

l Heavy lift and haulage – Hiring out of cranes and provision of transportation.

l Marine transportation – Provision of wharfing and stevedoring services.

l Engineering service – Carrying on the business of mixed construction.

l Trading – Trading of heavy equipment and spare parts.

Other operations at the Group comprise investment holding and provision of training courses and consultancy services on

mobile crane operations, neither of which constitute a separately reportable segment.

Segment assets consist primarily of property, plant and equipment, deferred expenditure, inventories, receivables and operating

cash. Segment liabilities comprise operating liabilities, taxation and certain corporate borrowings. Capital expenditure

comprises additions to property, plant and equipment and deferred expenditure.

(b) Secondary report format – geographical segments

The Group’s four main business segments operate in two main geographical areas:

Singapore is the home country of the Group. The areas of operation are principally heavy lift and haulage, marine

transportation, engineering service, trading and other operations of the Group.

Malaysia – the main activity is heavy lift and haulage.

Other countries – comprise mainly Indonesia and Philippines and the main activity is heavy lift and haulage.

Sales revenues Total assets Capital expenditure2001 2000 2001 2000 2001 2000

$ $ $ $ $ $

Singapore 29,329,633 24,261,172 67,666,781 50,883,921 24,333,677 6,897,669

Malaysia 2,063,297 3,224,070 1,786,713 2,113,888 177,442 58,272

Other countries 9,011,200 6,052,795 443,796 1,383,690 106 142,328

40,404,130 33,538,037 69,897,290 54,381,499 24,511,225 7,098,269




(b) Secondary report format – geographical segments (continued)

With the exception of Singapore, no other individual country contributed more than 10% of consolidated revenues and assets.

Sales revenue is based on the country in which the customer is located. Total assets and capital expenditure are shown by the

geographical area in which the assets are located.

31. Subsequent event

Subsequent to the year end, one of the subsidiaries entered into a sales and purchase agreement to purchase six large

capacity cranes amounting to approximately $12.4 million with delivery dates commencing from September 2001 to July 2002.

32. Comparatives

Certain comparative figures have been reclassified to conform with the current year’s presentation.

In particular, the comparatives have been adjusted or extended to take into account the requirements of the following revised

Singapore Statements of Accounting Standard which the Group implemented in 2001.

SAS 1 – Presentation of financial statements

SAS 15 – Leases

The results are not affected by the adoption of the above Accounting Standards in these financial statements as the Group was

already following the recognition and measurement principles in those Standards.


SHAREHOLDERS INFORMATION REQUIRED UNDER SES LISTING MANUAL

Analysis of shareholders by range of balances

As at 31 October 2001

Size of holdings No. of holders % No. of shares %

1 - 1,000 2,691 41.71 2,691,000 1.20

1,001 - 10,000 2,671 41.40 16,590,000 7.37

10,001 - 1,000,000 1,073 16.63 48,546,000 21.57

1,000,001 and above 17 0.26 157,223,940 69.86

6,452 100.00 225,050,940 100.00

List of twenty largest shareholders


S/no Shareholder’s name Percentage ofNo. of shares holdings

1 Ang Choo Kim & Sons (Pte) Ltd 115,273,940 51.22

2 Ang Kah Leong 7,915,000 3.52

3 Ang Kha King 7,765,000 3.45

4 Mayban Nominees (S) Pte Ltd 5,500,000 2.44

5 HL Bank Nominees (S) Pte Ltd 2,700,000 1.20

6 United Overseas Bank Nominees Pte Ltd 2,110,000 0.94

7 Overseas Union Trust (Noms) Pte Ltd 2,000,000 0.89

8 Overseas Union Bank Nominees Pte Ltd 1,972,000 0.88

9 Singapore Nominees Pte Ltd 1,752,000 0.78

10 Philip Securities Pte Ltd 1,586,000 0.70

11 G K Goh Stockbrokers Pte Ltd 1,523,000 0.68

12 SBS Nominees Pte Ltd 1,450,000 0.64

13 Citibank Consumer Nominees Pte Ltd 1,262,000 0.56

14 Hironaga Hashimoto 1,165,000 0.52

15 DBS Nominees Pte Ltd 1,121,000 0.50

16 Ang Kah Hong 1,065,000 0.47

17 Koh Chew Kwee 1,064,000 0.47



List of twenty largest shareholders (continued)


S/no Shareholder’s name Percentage ofNo. of shares holdings

18 Ong & Company Pte Ltd 994,000 0.44

19 UOB Kay Hian Pte Ltd 955,000 0.42

20 OCBC Securities Private Ltd 870,000 0.39

Total 160,042,940 71.11

Analysis of shareholders


Number of sharesDirect Deemed

Substantial shareholders interest interest

Ang Choo Kim & Sons (Pte) Limited 115,273,940 —

Ang Kah Hong 8,565,000 115,273,940

Ang Kha King 7,765,000 115,420,940

Directors’ interest in shares

As at 21 July 2001

According to the register maintained under Section 164 of the Companies Act, Cap. 50, the directors had an interest in the shares of

the Company on the 21st day after the end of the financial year as undernoted:

Shareholdingsregistered in the

name of directors Shareholdings in which or in which directors directors are deemedhave a direct interest to have an interest

As at 21.7.2001 As at 21.7.2001

Ang Kah Hong 8,565,000 115,153,940

Ang Kha King 7,765,000 115,153,940

Tan Swee Khim 3,431,000 —

Chandra Mohan s/o Rethnam 30,000 —

Wong King Kheng 30,000 —



Directors’ interest in shares (continued)

As at 21 July 2001

Ang Kah Hong and Ang Kha King have 5,990,298 and 2,995,149 ordinary shares of $1 each respectively in the ultimate holding

company Ang Choo Kim & Sons (Pte) Limited. Their deemed interest in the Company through Ang Choo Kim & Sons (Pte) Limited is

shown above.

Voting rights of ordinary shareholders

Every member of the Company present in person or by proxy shall have one vote on a show of hands and in the case of a poll shall

have one vote for every share of which he is the registered holder.


CORPORATE GOVERNANCE

Tiong Woon Corporation Holding Ltd is committed to raising the standard of corporate governance in order to protect the interests of

its shareholders. For effective corporate governance, the Company has put in place various self–regulatory and monitoring

mechanisms which are set out below:

Board of Directors

The Board comprises five members, two of whom are non-executive directors. The Board held six meetings in the financial year.

The Board supervises the management of the business and affairs of the Group. Apart from its statutory responsibilities, the Board

approves the Group’s strategic plans, key operational initiatives, major investments and funding decisions; identifies principal risks of

the Group’s business and ensures the implementation of appropriate systems to manage these risks; reviews the financial

performance of the Group and evaluates the performance and compensation of senior management personnel. These functions are

carried out either directly or through the Audit Committee.

Audit Committee

The directors of Tiong Woon Corporation Holding Ltd have adopted the principles of corporate governance under the Best Practices

Guide with respect to Audit Committees as formulated by the Singapore Exchange Securities Trading Limited (“SGX-ST”).

The Audit Committee comprises three members, two of whom are non-executive directors. Chandra Mohan s/o Rethnam, an

independent director, chairs the Audit Committee. The Committee held four meetings in the financial year and performs the following

functions:

(i) reviews with the external auditors, their audit plan, evaluation of the internal accounting controls, audit report and any matters

which the external auditor wishes to discuss;

(ii) reviews of the half-yearly announcements and annual financial statements, including adhoc announcements to shareholders and

the SGX prior to submission to the Board;

(iii) reviews of any significant findings of internal investigations;

(iv) makes recommendations to the Board on the appointment of the external auditors, the audit fee and any questions of

resignation or dismissal of auditors;

(v) reviews the assistance given by the Company’s officers to the external auditors;


CORPORATE GOVERNANCE

Audit Committee (continued)

(vi) reviews and approves the remuneration of the executive directors and the employees who are related to the controlling

shareholders; and

(vii) reviews interested person transactions to ensure that they are carried out on normal arm’s length and commercial terms.

Management Committee

The Management Committee is led by Mr. Ang Kah Hong, the Chairman of the Company, and comprises of the Executive Directors

and the Senior Management staff. The Committee meets once a month, and performs the following functions:

(i). Setting Group’s short-term objectives and strategic directions at the beginning of each fiscal year, in line with the Group’s

strategic, long-term objectives as determined by the Board.

(ii). Projects Group’s sales and profits, and allocates and approves operational budgets for each new fiscal year.

(iii). Reviews Group’s operational performance by ensuring adherence to the planned budgets, and approves rectification steps to be

taken for off-budget items.

(iv). Analyzes local and regional market opportunities, and set appropriate marketing strategies.

Dealings in Securities of the Company

The Group has issued a circular to all directors and staff, to emphasize the importance when dealing in the shares of the Company,

of observing the recommendations of the Best Practices Guide issued by SGX-ST and formally adopted by the Company. In addition,

a circular is issued before the start of the window period to remind directors and staff to refrain from dealing in the Company’s shares

during the month prior to release of the announcement of the Group’s financial results.

ANG KAH HONG

Chairman of the Board

7 November 2001


NOTICE OF ANNUAL GENERAL MEETING

Notice is hereby given that the Annual General Meeting of the Company will be held at No.15 Pandan Crescent,

Singapore 128470 on 30 November 2001 at 11.00 a.m. to transact the following business:

As Ordinary Business

1. To receive and adopt the Accounts for the financial year ended 30 June 2001 and the Report of Directors

and Auditors thereon.

2. To approve Directors’ fees for the year ended 30 June 2001.

3. To re-elect the following Directors who are retiring in accordance with the Company’s Articles of

Association:-

(a) Mr Ang Kha King (Retiring under Article 104)

(b) Mr Wong King Kheng (Retiring under Article 104)

In accordance with the requirements of Clause 902(4)(a) of the Singapore Exchange Securities Trading

Limited’s Manual, the person listed as (b), a non-Executive Director, if re-elected, will continue to serve

as a member of the Audit Committee and will be considered an Independent Director.

4. To re-appoint PricewaterhouseCoopers as auditors of the Company and to authorise the Directors to fix

their remuneration.

As Special Business

5. To consider and, if thought fit, to pass the following Ordinary Resolution with or without modifications:-

“That pursuant to Section 161 of the Companies Act, Cap. 50, approval be and is hereby given to the

Directors to issue shares in the capital of the Company at any time, upon such terms and conditions and

for such purposes and to such persons as the Directors may in their absolute discretion deem fit, provided

always that the aggregate number of shares to be issued pursuant to this Resolution shall not exceed

50% of the existing share capital of the Company of which the aggregate number of shares issued other

than on a pro rata basis to existing shareholders shall not exceed 20% of the existing issued share capital

of the Company.” (See explanatory note)

Resolution 1

Resolution 2

Resolution 3

Resolution 4

Resolution 5

Resolution 6


NOTICE OF ANNUAL GENERAL MEETING

6. To transact any other business that may be transacted at an Annual General Meeting of the Company of which due notice shall

have been given.

By Order of the Board

Choong Mee Fong (Ms)

Company Secretary

15 November 2001

Notes:

1. A Member of the Company entitled to attend and vote at the Meeting is entitled to appoint a proxy and vote in his stead.

2. A proxy need not be a Member of the Company.

3. The instrument appointing a proxy must be deposited at the registered office of the Company at No.13 & 15 Pandan Crescent Singapore

128470 not later than 48 hours before the time appointed for the Meeting.

Explanatory Notes

The Ordinary Resolution proposed in item 5 above, if passed will empower the Directors of the Company from the date of the above Meeting until

the next Annual General Meeting to issue shares in the Company up to an amount not exceeding in total 50 percent of the existing issued share

capital of the Company for such purposes as they consider would be in the interest of the Company. This authority will, unless revoked or varied at

a general meeting, expire at the next Annual General Meeting of the Company.

Total Number of Shares held

%

Tiong Woon Corporation Holding Ltd(Incorporated in the Republic of Singapore)

PROXY FORM

I/We

of

being *a member/members of Tiong Woon Corporation Holding Ltd (the “Company”), hereby appoint

Name Address NRIC/ Proportion of shareholdings toPassport No be represented by proxy (%)

*and/or

as *my/our *proxy/proxies to vote for *me/us on *my/our behalf and, if necessary, to demand a poll, at the Annual General Meeting ofthe Company to be held at No. 15 Pandan Crescent, Singapore 128470 on Friday, 30 November 2001 at 11.00 a.m. and at anyadjournment thereof.

*I/We direct *my/our proxy/proxies to vote for or against the Ordinary Resolutions to be proposed at the Annual General Meeting asindicated with an “X” in the spaces provided hereunder. If no specific directions as to voting are given, the *proxy /proxies will voteor abstain from voting at *his/their discretion.

Ordinary Resolution For Against

1. To receive and adopt the Accounts for the financial year ended 30 June 2001 and theReport of the Directors and Auditors thereon. (Resolution 1)

2. To approve Directors’ fees for the year ended 30 June 2001. (Resolution 2)

3. To re-elect the following Directors who are retiring in accordance with the Company’sArticles of Association:-(a) Mr Ang Kha King (Retiring under Article 104) (Resolution 3)(b) Mr Wong King Kheng (Retiring under Article 104) (Resolution 4)

4. To re-appoint PricewaterhouseCoopers as auditors of the Company and to authorise theDirectors to fix their remuneration. (Resolution 5)

5. To approve the Ordinary Resolution pursuant to Section 161 of the Companies Act,Chapter 50. (Resolution 6)

Dated this day of 2001.

Signature(s) of Member(s)/Common Seal

* Delete accordingly

Notes :

1. A member of the Company entitled to attend and vote at the Annual General Meeting is entitled to appoint not more than two proxies to

attend and vote in his stead. Such proxy need not be a member of the Company.

2. Where a member of the Company appoints two proxies, he shall specify the proportion of his shareholding (expressed as a percentage of

the whole) to be represented by each such proxy.

3. 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 common seal or under the

hand of its attorney or duly authorised officer.

4. A corporation which is a member of the Company may authorise by resolution of its directors or other governing body such person as it

thinks fit to act as its representative at the Annual General Meeting, in accordance with its Articles of Association and Section 179 of the

Companies Act, Chapter 50 of Singapore.

5. The instrument appointing proxy or proxies, together with the power of attorney or other authority (if any) under which it is signed, or

notarially certified copy thereof, must be deposited at the registered office of the Company at No. 13 & 15 Pandan Crescent Singapore

128470 not later than 48 hours before the time set for the Annual General Meeting.

6. A member should insert the total number of shares held. If the member has shares entered against his name in the Depository Register (as

defined in Section 130A of the Companies Act, Chapter 50 of Singapore), he should insert that number of shares. If the member has shares

registered in his name in the Register of Members of the Company, he should insert the number of shares. If the member has shares

entered against his name in the Depository Register and shares registered in his name in the Register of Members of the Company, he

should insert the aggregate number of shares. If no number is inserted, this form of proxy will be deemed to relate to all the shares held by

the member of the Company.

7. 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 members of the Company whose shares are entered against their names in the Depository

Register, the Company may reject any instrument appointing a proxy or proxies lodged if such members are not shown to have shares

entered against their names in the Depository Register 48 hours before the time appointed for holding the Annual General Meeting as

certified by The Central Depository (Pte) Limited to the Company.

8. A Depositor shall not be regarded as a member of the Company entitled to attend the Annual General Meeting and to speak and vote thereat

unless his name appears on the Depository Register 48 hours before the time set for the Annual General Meeting.

No. 13 & 15 Pandan Crescent, Singapore 128470Tel: 261 7888 Customer Service: 777 4450 Fax: 777 4544E-mail: [email protected]

TIONG WOON CORPORATION HOLDING LTD

Documents

TIONG WOON CORPORATION HOLDING LTDtiongwoon.listedcompany.com/misc/ar2001.pdf · 4 Chairman’s Statement ... 61 Notice of Annual General Meeting 63 Proxy Form. 1 CORPORATE PROFILE