Professional Documents
Culture Documents
CORPORATE INFORMATION
BOARD COMPOSITION OPERATING SUBSIDIARIES
• Board of Directors • Singapore
G1 Investments Pte. Ltd.
Executive Directors:
Venturistic Holdings Pte. Ltd.
Neo Kim Hock (Chairman)
Insight Academy of Higher Learning Pte. Ltd.
James Hong Gee Ho
Tria Holdings Pte. Ltd.
Non-Executive Director: Asphere Holdings Pte. Ltd.
Richard Chan Sing En Tyzen Holdings Pte. Ltd.
Independent Directors: Phelago Holdings Pte. Ltd.
Goh Boon Kok (Lead Independent Director) Adroit Innovations Investment Pte Ltd
Calvin Lim Huan Kim 3 Phillip Street
• Nominating Committee #09-03 Commerce Point
Goh Boon Kok (Chairman) Singapore 048693
Calvin Lim Huan Kim • Malaysia
Richard Chan Sing En Raintree Rock Sdn. Bhd.
• Remuneration Committee Trackplus Sdn Bhd
Goh Boon Kok (Chairman) 177-3, Floor 3, Jalan Sarjana
Calvin Lim Huan Kim Taman Connaught, Cheras
Richard Chan Sing En 56000 Kuala Lumpur
• Audit Committee Malaysia
Goh Boon Kok (Chairman) Gemisuria Corporation Sdn Bhd
Calvin Lim Huan Kim 1st Floor, Lot 13
Richard Chan Sing En K.K. Chinese Chamber of Commerce
Kampong Air PO Box 11849
COMPANY SECRETARY 88000 Kota Kinabalu
Toon Choi Fan, ACIS Sabah, Malaysia
Tan Ping Ping, ACIS
• Indonesia
PT Rel-ion Sterilization Services
REGISTRAR
Kawasan Industri Ganda Mekar
Intertrust Singapore Corporate Services Pte. Ltd.
Cibitung, Bekasi 17520
3 Anson Road
Indonesia
#27-01 Springleaf Tower
Singapore 079909 PT. Tyzen Pacific Nusantara
PT. Tyzen Pacific International
AUDITORS
Gedang Bursa Efek Jakarta
Moore Stephens LLP
Menara II, Lantai 26
Certified Public Accountants
Jalan Jend Sudirman, Kav.52-53
10 Anson Road
Jakarta 12190
#29-15 International Plaza
Indonesia
Singapore 079903
Audit Partner in charge PRINCIPAL BANKERS
(appointment since year 2007) The Development Bank of Singapore Ltd
Mr Christopher Bruce Johnson 6 Shenton Way
DBS Building Tower One
REGISTERED OFFICE Singapore 068809
3 Phillip Street
Credit Agricole (Suisse) S.A.
#09-03 Commerce Point
168 Robinson Road
Singapore 048693
#23-03 Capital Tower
Tel : (65) 6332 9488
Singapore 068912
Fax : (65) 6332 9489
2 ADROIT INNOVATIONS LIMITED 09
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BOARD OF DIRECTORS
MR NEO KIM HOCK
Executive Director
Date of first appointment as a director : 3 November 2003
Date of last re-election as a director : 23 April 2009
Mr Neo Kim Hock is the Chairman of the Board of Directors and redesignated as Executive Director
of Adroit since 14 November 2007. He is also a director of several private companies. He has been
practising as a Licensed Land Surveyor in Peninsula Malaysia for more than 20 years. He is also involved
in housing developments in Malaysia. Mr Neo graduated with a Bachelor of Applied Science (Surveying)
degree from the Royal Melbourne Institute of Technology.
On behalf of the board, I would like to present and report the Group’s financial results and activities
for the year ended 31 December 2009.
Last year we said that uncertainty remains as the key characteristics of our operating environment,
and we will continue taking appropriate and considered steps to preserve and restore the value of the
Group. Our prudent approach saw the Group benefitting from the robust recovery in those markets
where we operate. The Group’s revenue increased 80% to S$2.9 million as compared to S$1.6 million
reported in the previous financial year. The increased revenue was attributable to the progressive sales
recognised from the units sold in Kota Kinabalu’s development project, additional rental income and
higher turnover from the sterilisation/irradiation business.
Overall, we have managed to deliver a satisfactory set of results, the Group’s profit before tax stands
at S$10.2 million. We have a healthy balance sheet and we are well positioned to seize further
opportunities that will contribute to the growth of the Group.
Business Review
Sterilisation Segment
We continue to invest in R&D to develop new applications for our irradiation services. We expect
the performance of our sterilisation unit to remain steady in the coming year barring any unforeseen
circumstances.
This segment of the Group was the main driver for the increased in revenue for the current year; an
increment of S$0.8 million was from the progressive sales recognised from the units sold in Kota
Kinabalu’s development project and rental income from our investment properties also increased by
S$0.3 million.
We expect this segment will continue to be the key revenue driver for the Group in the new financial
year following the completion of the Kota Kinabalu development project undertaken by Gemisuria
Corporation Sdn Bhd. The public launch for sales of the project’s units is expected to commence in
the second quarter of FY2010. We will be gearing up our marketing and sales efforts to promote the
sales of our first completed development project.
Meanwhile, we have submitted the modification plan for our development project in Shah Alam and
are waiting for approval.
In line with the economic recovery, we expect sentiments on property market to remain positive and
there will be abundant business opportunities. On this note, I would like to assure our shareholders
that we will maintain our prudent approach without excessive risk exposure.
4 ADROIT INNOVATIONS LIMITED 09
annual report
Given the strong recovery in the financial market, the value of the Group’s investments in marketable
securities, in particular, has no doubt recovered significantly, reversing a S$9.0 million loss in the last
financial year with a gain of S$13.7 million. While market volatilities will continue to impact the value
of our investments, we are confident that our mid to long term approach will create positive yields
regardless of short term market disturbances.
Finally, I would like to pay tribute to our staff and our Board of Directors for their unfailing support and
contributions. And to all our shareholders, I look forward to your continued support and confidence.
To continue to re-engineer Adroit into a niche strategic investor in businesses with the global market
in mind, that can generate opportunities, scalability and growth for the Group.
MANAGEMENT TEAM
SINGAPORE
MALAYSIA
INDONESIA
MR ARWAN AHIMSA
President Director of PT Rel-ion Sterilization Services
Mr Ahimsa is responsible for the overall business direction of PT Rel-ion Sterilization Services. He holds
a degree in Agriculture and Resource Economics from the University of Hawaii (1984).
MR YUSMAN, SH
Managing Director of PT Rel-ion Sterilization Services
Director of PT. Tyzen Pacific Nusantara
Director of PT. Tyzen Pacific International
Mr Yusman is responsible for the overall operational aspects and day-to-day management of PT Rel-ion
Sterilization Services, PT. Tyzen Pacific Nusantara and PT. Tyzen Pacific International. He holds a
degree in Law from the University of Tanjungpura, West Kalimantan, Indonesia.
6
100% 100%
G1 Investments Pte. Ltd. Raintree Rock Sdn. Bhd.
100%
57%
Adroit Innovations Sdn Bhd
Venturistic Holdings Pte. Ltd.
(In process of voluntary liquidation)
100%
ADROIT INNOVATIONS LIMITED
Insight Academy of
Higher Learning Pte. Ltd.
annual report
100%
09
100%
Trackplus Sdn Bhd
100%
Asphere Holdings Pte. Ltd.
100%
Gemisuria Corporation
Sdn Bhd
100%
Adroit Innovations Investment
Pte Ltd
55.43%
PT Rel-ion Sterilization
Services
100%
Tyzen Holdings Pte. Ltd.
100%
PT. Tyzen Pacific Nusantara
100%
PT. Tyzen Pacific International
100% 20%
Phelago Holdings Pte. Ltd. Grand Prosper Group Limited
ADROIT INNOVATIONS LIMITED 09
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7
The Group
Consolidated Statement of 31 December 2009 31 December 2008
Comprehensive Income – S$ 12 months 12 months
The Group
Consolidated Statement of Financial Position – S$ 31 December 2009 31 December 2008
The Group
Ratio Computation 31 December 2009 31 December 2008
CORPORATE GOVERNANCE
This report outlines the main corporate governance practices and procedures adopted by Adroit
Innovations Limited (“Adroit” or “Company”) and its subsidiaries (“Group”) with specific reference to
Adroit’s Code of Corporate Governance (“Code”). The Group and the Board of Directors (“Board”) are
committed to ensure and fully support the principles and guidelines of the Code that form part of the
continuing obligations as described in the Singapore Exchange Securities Trading Limited’s (“SGX-
ST”) Listing Manual.
Practice 1: Adroit is to be headed by an effective Board of Directors (“Board”) to lead and control the
Company. The Board is collectively responsible for the success of the Company. The Board works with
the Management to achieve this and the Management remains accountable to the Board.
As at the date of this report, the Board of the Company comprises five (5) members (“Director”),
namely:
• Neo Kim Hock;
• James Hong Gee Ho;
• Richard Chan Sing En;
• Goh Boon Kok; and
• Calvin Lim Huan Kim.
The Board carries out its function directly or through various committees, which have been set up to
support its role.
Board Processes
The various committees, which have been set up to support the role of the Board, are as follows:
• the Nominating Committee;
• the Remuneration Committee; and
• the Audit Committee.
The committees’ functions with specific objectives, duties and responsibilities, are clearly defined
in their Terms of References and operating procedures, which are reviewed on a regular basis and
adoption of improvements as and when required to meet the changes in the environment, operational,
financial and activities of the Group. These committees have the authority to examine any particular
issue and report back to the Board with fair, proper and appropriate recommendations when required.
The ultimate responsibility for the final decision on all matters, however, lies with the entire Board.
CORPORATE GOVERNANCE
The following tabulates the number of meetings held and attended by each Director during the financial
year ended 31 December 2009:
Nominating Remuneration
Board of Directors Committee Committee Audit Committee
No. of Meetings No. of Meetings No. of Meetings No. of Meetings
Name Held Attended Held Attended Held Attended Held Attended
Neo Kim Hock 4 4 NA NA NA NA NA NA
James Hong Gee Ho 4 4 NA NA NA NA NA NA
Richard Chan Sing En 4 4 1 1 1 1 4 4
Goh Boon Kok 4 4 1 1 1 1 4 4
Calvin Lim Huan Kim 4 4 1 1 1 1 4 4
In addition, the Board has established financial authorisation and proper approval processes pertaining
to the operating and capital expenditure including acquiring and disposing of assets and investments.
This includes proper procedures, guidelines, handbooks, policies and forms are set forth and
established for guidance, monitoring and review. Some of the above mentioned are further discussed
in the following Practices.
Training of Directors
The Company has in place general orientation-training programmes to ensure that every newly
appointed and incoming director of the Company is familiar with the Group’s operations and governance
practices including setting out the director’s duties, responsibilities and obligations, briefing on the
Group’s financial performance, strategies and action plans, corporate strategic direction, policies and
activities. In addition, the Board encourages its members to attend seminars and receive training to
improve themselves in the discharge of their duties as directors.
Practice 2: Existence of a strong and independent element on the Board, which is able to exercise
objective judgment on corporate affairs independently, in particular, from Management. No individual
or small group of individuals dominate the Board’s decision making.
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CORPORATE GOVERNANCE
As at the date of this report, the Board composition comprises of:
• Non-Executive Directors
Goh Boon Kok (Lead Independent Director)
(Chairman of Nominating, Remuneration and Audit Committee)
Calvin Lim Huan Kim (Independent Director)
Richard Chan Sing En
• Executive Directors (“Management”)
Neo Kim Hock (Chairman of Board of Directors)
James Hong Gee Ho
There is a strong and independent element on the Board, which enables the Directors to exercise
objective judgement on corporate affairs independently, in particular, from the Management. The
Company has the number of Independent Directors which complies with the Code’s requirement that
at least one-third (1/3) of the Board should be made up of Independent Directors, which brings a strong
and independent element to the Board.
In addition, the Non-Executive Directors are constructively reviewing and assisting the Board to facilitate
and develop proposals on strategy and review the performance of the Management in meeting on agreed
objectives and monitor the reporting of performance. On the effectiveness, the Non-Executive Directors
have the full access and co-operation from the Company’s Management and officers including on a
regular basis, the critical financial performance is presented for review. The Non-Executive Directors
have full discretion to have separate meetings and invite any Directors or officers to the meetings and
to meet as and when warranted by certain circumstances.
The functions of examining and assessment of the Board are delegated to the Nominating Committee
and its responsibilities and assessment are further discussed under the Nominating Committee
heading, Practice 4 and Practice 5 as below.
Nominating Committee
As at the date of this report, the Nominating Committee (“NC”) of the Company comprises three (3)
members, namely:
• Goh Boon Kok (Lead Independent Director)(Chairman);
• Calvin Lim Huan Kim (Independent Director); and
• Richard Chan Sing En,
all of whom are Non-Executive Directors and the majority of them, including the Chairman of the NC,
are Independent Directors. The members meet at least once a year.
The NC has specific written Terms of Reference setting out their duties and responsibilities. The NC’s
main principal functions are as follows:
• recommend to the Board on all Board’s appointments and re-appointments;
• determine independence of the Directors annually;
• ensure that at least one-third (1/3) of the Board made up of Independent Directors;
• annual review of the structure, composition and size of the Board;
• determine whether or not a Director is able to and has been adequately carrying out his duties as
Director of the Company, when the person has multiple board representations; and
• evaluate the performance and effectiveness of the Board as a whole, and the contribution of each
Director.
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CORPORATE GOVERNANCE
As part of good corporate governance, the NC also reviews annually the independence of Independent
Directors to ascertain the compliance to the Code’s definition of independence. Conversely, the NC
has the discretion to determine that a director is non-independent even if the director does not fall
under the circumstances set forth.
The criterion for independence is determined based on the definition as provided in the Code and Terms
of Reference by examining the different relationships, and no relationship that could interfere and/or
view to interfere the judgement of the director is considered to be independent.
The NC is satisfied that the Directors, who are Non-Executive and Independent, met the criterion of non-
executive and independent as set forth and has the ability to act with an independent judgement.
In addition, the Board of Directors complied to the requirement of the Code whereby one-third (1/3)
of the members are independent Directors and there is no individual or small group of individuals
dominates the Board’s decision making process.
Practice 3: The Company needs to have a clear division of responsibilities at the top of the Company
— the working of the Board and the Executive responsibility of the Company’s business — which
will ensure a balance of power and authority, such that no one individual represents a considerable
concentration of power.
The Executive Chairman and Executive Director of the Company are Neo Kim Hock and James Hong
Gee Ho, respectively. In view of the fact that they are both part of the executive management team,
the Company have appointed Goh Boon Kok as the Lead Independent Director, pursuant to the
recommendations in Commentary 3.3 of the Code of Corporate Governance 2005. In accordance
with the recommendations in the said Commentary 3.3, the Lead Independent Director is available to
shareholders where they have concerns which contact through the normal channels of the Executive
Chairman and Executive Director has failed to resolve or for which such contact is inappropriate.
The Executive Director is responsible for coordinating and assisting the Chairman in its strategic direction
and for ensuring the execution of strategic goals and day-to-day management of the Group.
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CORPORATE GOVERNANCE
BOARD MEMBERSHIP
Practice 4: Existence of a formal and transparent process for the appointment of new directors to the
Board.
The process of selection and appointment of a new director to the Board is overseen by the NC. Before
recommendation and proposing, the NC will review the size, complexity and the business activities
of the Group to determine the suitability of the candidates and also the candidates’ background,
experience, skills, knowledge and exposure to the Group’s businesses; each contributing their own
contribution to generate a mix and pooling of knowledge for the benefit of the Board. In addition, the
newly appointed director is also required to retire at the Annual General Meeting (“AGM”) immediately
following his appointment, and can, subject to the recommendation of the NC and the Board, offer
himself for re-election at the AGM.
To further enhance the principle of good corporate governance, all Directors are required to submit
themselves for re-nomination and re-election at regular intervals. The NC was set up to look into the
appointment and re-appointment of Directors to the Board. The Articles of Association of the Company
require that one-third (1/3) of the Board retire from office at each AGM. Accordingly, the Directors
submit themselves for re-nomination and re-election at regular intervals of at least once every three
(3) years.
Key information regarding Directors submitted for election or re-election, such as academic and
professional qualifications, shareholding in the Company and its subsidiaries, board committees served
on (as member or Chairman), date of first appointment as Director and date of last re-election as
Director, are disclosed in the Annual Report to enable shareholders to make informed decisions.
BOARD PERFORMANCE
Practice 5: Conduct of formal assessment of the effectiveness of the Board as a whole and the
contribution by each Director to the effectiveness of the Board.
The NC has adopted a formal process to assess the effectiveness of the Board as a whole and for
assessing the contribution by each individual Director. This evaluation is to be carried out at least once
a year. When a Director has multiple board representations, the Director would need to ensure that
sufficient time and attention is given to the affairs of each company. Nevertheless, the NC will also
review and assess whether the Director is able to and has been adequately carrying out the duties as
a Director of the Company. Upon assessment, the NC will make recommendations for improvement
as and when required.
The Chairman of the Board will act on the results of the performance evaluation and recommendation,
and where appropriate, propose new members to be appointed to the Board or seek the resignation
of the Directors, in consultation with the NC.
During the financial year, the Directors were requested to complete an assessment checklist/form and
focuses on the criterion on effectiveness and efficiency on the Board’s access to information, evaluation
of the size and composition of the Board, the Board’s processes, procedures and compliance, and
accountability, Board’s performance in connection to discharging its responsibilities and duties and
Directors’ standards of conduct. In addition, the qualitative measures include the effectiveness of the
Board in its monitoring role and the attainment of the strategic objectives set by the Board.
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CORPORATE GOVERNANCE
The individual assessment would include and aim to assess efficiency and effectiveness of each
Director’s continuous contribution to the Board and commitment to their roles and responsibilities in
discharging their duties.
Upon reviewing the assessment, the NC is of the opinion that the Board and each member of the Board
have been effective and efficiently contributed to the Board and Group during the year.
Furthermore, the NC is also satisfied that the current size and composition of the Board has adequate
ability to meet the Group’s existing scope of needs and the nature of operation. From time to time, the
NC will review the appropriateness of the current board size, taking into consideration the changes in
the nature and scope of the Group’s operations as well as regulatory environment.
ACCESS TO INFORMATION
Practice 6: The Board members will be provided with complete, adequate and timely information prior
to the Board meetings and on an on-going basis.
The Board is provided with Board papers in advance before each Board Meeting, giving the background,
explanatory information and justification for each decision and mandate sought by the Management,
including, where applicable, pertinent financials, to enable them to be properly informed of matters to
be discussed and/or approved.
All Directors have separate and independent access to the Management Team of the Group at all
times and can communicate directly with the Management, the officers, the Company Secretaries
and external auditors on all matters as and when they deem necessary. They have full access to the
Company’s records and information and may obtain independent legal and other professional advice
if it deems necessary in the discharge of its responsibilities properly. Such expenses are to be borne
by the Company.
The Company Secretary is required to attend the Board Meetings and is responsible for recording
the proceedings. In addition, the Company Secretary assists the Chairman in ensuring that Board
procedures are followed and reviewed so that the Board functions effectively, and the Company’s
Memorandum and Articles of Association and relevant rules and regulations, including requirements
of the Singapore Companies Act and the SGX-ST, are complied with. The appointment and removal of
the Company Secretaries are decided by the Board as a whole.
Practice 7: Formal and transparent procedure for developing policy on executive remuneration and for
fixing the remuneration packages of individual Directors. No Director should be involved in deciding
his own remuneration.
Remuneration Committee
As at date of this report, the Remuneration Committee (“RC”) of the Company comprises three (3)
members, namely:
• Goh Boon Kok (Lead Independent Director)(Chairman);
• Calvin Lim Huan Kim (Independent Director); and
• Richard Chan Sing En,
all of whom are Non-Executive Directors and the majority of them, including the Chairman of the RC,
are Independent Directors. The members meet at least once a year.
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CORPORATE GOVERNANCE
The RC has specific written Terms of Reference setting out their duties and responsibilities. The RC’s
main functions are as follows:
• making recommendations to the Board on a framework of remuneration for the Board, Non-
Executive Directors, Executive Directors and Management of the Company;
• review of service contracts and/or employment contracts, where applicable;
• oversee and review the administration of the Employees Share Option (“ESOS”) as defined in the
option scheme; and
• recommendation on payment of fees to Non-Executive Directors based on the effort, time spent
and responsibilities of the individual Director.
The RC covers all aspects of remuneration, including but not limited to directors’ fees, salaries,
allowances, bonuses, options, benefits-in-kind, compensation/termination and gratuities. However,
members of the RC will ensure that they do not set their own remuneration. The RC may obtain
independent professional advice if deems necessary in the discharge of its responsibilities properly.
Such expenses are to be borne by the Company.
Subject to approval by shareholders at the AGM, the Non-Executive Directors are paid a fixed director’s
fee for their efforts, responsibilities and contribution to the Board. During the year, the RC proposed
and recommended that the Directors’ fees for the financial year ended 31 December 2009 is to be
fixed at S$65,000.
Practice 8: The level of remuneration should be appropriate to attract, retain and motivate the Directors
needed to run the Company successfully. A proportion of the remuneration, especially that of the
Executive Director/Management, may be structured so as to link rewards to performance of the Group,
corporate and individuals performance, of qualitative and quantitative measures.
The review of the remuneration packages takes into consideration the long-term interests of the Group,
the performance of the Group, overall assessment of the Board, the individual assessment of each
Director, level of contribution to the Company and Board, taking into account factors such as, efforts
and time spent and responsibilities and duties of the Directors, carefully evaluating the costs and
benefits of each incentive before recommendation to the Board for review and approval. Nevertheless,
the RC will ensure that the Independent Directors are not over-compensated to the extent that their
independence may be compromised.
During the year, the RC reviewed the compensation and remuneration packages and strongly believes
that the Directors and the Management are sufficiently compensated. In addition, the RC will ensure
to provide appropriate compensation packages at market rates for the Board and the Management of
the Company which will reward successful performance and attract and motivate the Directors and
the Management.
DISCLOSURE ON REMUNERATION
Practice 9: Clear disclosure of its remuneration policy, level and mix of remuneration, and the procedure
for setting remuneration, in the Company’s annual report. It should provide disclosure in relation to
its remuneration policies to enable investors to understand the link between remuneration paid to the
Directors and the Management, and performance.
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CORPORATE GOVERNANCE
The Company recognises that a clear disclosure in relation to its remuneration policies to enable
investors to understand the link between remuneration paid/payable to the Directors and the
Management. A breakdown, showing the level and mix of each individual Director’s remuneration
payable for the financial year ended 31 December 2009 is as follows:
Remuneration Band Below S$250,000 Fee, Salary & Allowance AWS Bonus Benefits of Kind Total
Neo Kim Hock 92% 8% – – 100%
Richard Chan Sing En 100% – – – 100%
Goh Boon Kok 100% – – – 100%
Calvin Lim Huan Kim 100% – – – 100%
Remuneration Band Above S$250,000 Fee, Salary & Allowance AWS Bonus Benefits of Kind Total
James Hong Gee Ho 81% 7% – 12% 100%
The Remuneration of the Management of the Company during the financial year ended 31 December
2009 is as follows:
Remuneration Band Fee, Salary & Allowance AWS Bonus Benefits of Kind Total
Below S$250,000: Neo Kim Hock 92% 8% – – 100%
Above S$250,000: James Hong Gee Ho 81% 7% – 12% 100%
There are no employees who are immediate family members of a Director and/or the Chairman.
ACCOUNTABILITY
Practice 10: The Board presents a balanced and understandable assessment of the Company’s
performance, position and prospect.
The Board recognises the importance and aims to provide to the shareholders with a balanced and
understandable fair assessment of the Group’s including accurate, relevant and appropriate information
of the financial position, detailed explanatory analysis and the prospects of the Group when it
announces the interim and annual financial statements. In addition, periodic and timely announcement
of the Group’s developments, price sensitive public reports and information, reports to regulators and
all necessary information to the shareholders in order to better comprehend the Group’s performance,
position and prospect. The announcement submitted for shareholders and the public will be in
accordance to SGX-ST timeline and regulations.
The Management provides the Board with financial information of the Group’s performance and position,
on a timely basis at all times and complete with accurate, relevant and appropriate information, to
facilitate effective and efficient discussion and decision making.
AUDIT COMMITTEE
Practice 11: The Board establishes the Audit Committee with written Terms of Reference, which clearly
sets out its authority, responsibilities and duties.
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CORPORATE GOVERNANCE
As at the date of this report, the Audit Committee (“AC”) of the Company comprises three (3) members,
namely:
• Goh Boon Kok (Lead Independent Director)(Chairman);
• Calvin Lim Huan Kim (Independent Director); and
• Richard Chan Sing En,
all of whom are Non-Executive Directors and the majority of them, including the Chairman of the AC,
are Independent Directors. The members meet at least four times in a year.
The AC has specific written Terms of Reference setting out their duties and responsibilities. The AC’s
main principal functions are as follows:
• review the audit plan of the external auditors and ensures the adequacy of the Group’s system of
accounting controls and the co-operation given by Management to the external auditors;
• review the interim and annual financial statements and the auditors’ report on the annual financial
statements of the Group before their submission to the Board of Directors;
• review the significant financial reporting issues and judgements so as to ensure the integrity of the
financial statements of the Group and any formal announcements relating to the Group’s financial
performance;
• review the effectiveness of the Group’s material internal controls, including financial, operational
and compliance controls and risk management;
• meet with the external auditors, other committees, and/or the Management in separate executive
sessions to discuss any matters that these groups believe should be discussed privately with the
AC;
• review legal and regulatory matters that may have a material impact on the financial statements,
related compliance policies and programmes and any reports received from regulators;
• review the cost effectiveness and the independence and objectivity of the external auditors;
• review the nature and extent of non-audit services provided by the external auditors;
• recommend the external auditors to be nominated, approve the compensation of the external
auditors, and reviews, the scope and results of the audit;
• report actions and minutes of the AC to the Board with such recommendations as the AC considers
appropriate; and
• review interested person transactions in accordance with the requirements of the SGX-ST’s Listing
Manual.
The AC has the power to conduct or authorise investigations into any matters within the AC’s scope
of responsibility. The AC is authorised to obtain independent professional advice if it deems necessary
in the discharge of its responsibilities. Such expenses are to be borne by the Company.
The AC has full access to and co-operation of the Management, officers, Company Secretaries,
Directors and relevant external regulator and/or professional parties and has full discretion to invite
any Director or officer to attend its meetings, and has been given reasonable resources to enable it to
discharge its functions.
The AC also reviews any arrangement by which staff of the Group, or any other officers, may, in
confidence, raise concerns about possible and/or suspected fraud, irregularities, corruption, dishonest
practices and/or improprieties in matters of financial reporting or other similar matters. The AC’s
objective is to ensure that arrangements are in place for the independent investigation of such matters
and for appropriate follow up action and improvements, if necessary and required.
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CORPORATE GOVERNANCE
In 2006, the Company adopted the Whistle-Blowing Policy provided to the staff with well-defined and
accessible channels within the Group to counter and mitigate any possible and/or suspected fraud.
Proper written procedures, policies and guideline are in place for making such reports in good faith,
with confidence and will be treated fairly and be protected from reprimand. As at the date of this report
and to the best of their knowledge and belief, nothing has come to the attention of the AC that may
require any follow up and/or action plan.
The AC, having reviewed for any non-audit services provided to the Group by the external auditors,
was of the opinion that there was no non-audit services rendered that would affect the independence
of the external auditors.
The AC has recommended to the Board of Directors the re-appointment of Messrs Moore Stephens
LLP as external auditors of the Company.
Throughout the financial year ended 31 December 2009, the Board assessed and reviewed, together
with the assistance of the NC, to ensure that the members of the AC were appropriately qualified to
discharge their responsibilities. The Board viewed that adequate and reasonable assistance and support
has been properly rendered by the Directors, Management and officers to the AC and that the AC has
been effectively and efficiently contributed to the Board and Group. In addition, at least one (1) of the
members of the AC has relevant accounting and related financial management expertise, experience,
knowledge related to the business of the Group and is a Certified Public Accountant, as the Board
interprets such qualification in its business judgement.
INTERNAL CONTROLS
Practice 12: The Board should ensure that the Management maintains a sound system of internal
controls to safeguard the shareholders’ investments and the Group’s assets.
The external auditors conduct an annual review, in accordance with their audit plan, of the effectiveness
of the Company’s material internal controls, including financial, operational and compliance controls,
and risk management. Any material non-compliance or failures in internal controls and recommendations
for improvements are reported to the AC. The Committee also reviews the effectiveness of the actions
taken by the Management on any recommendations made by the external auditors, where necessary.
It is the opinion of the Board that, in the absence of evidence to the contrary, the system of internal
controls maintained by the Group is in place throughout the financial year and up to the date of this
report. It provides reasonable, but not absolute, assurance against material financial misstatements
or losses, and includes the safeguarding of assets, the maintenance of proper accounting records,
the reliability of financial information, compliance with appropriate legislation, regulations and best
practices, and the identification and containment of financial, operational and compliance risks. The
Board notes that all internal control systems contain inherent limitations and no system of internal
controls could provide absolute assurance against the occurrence of material errors, poor judgment
in decision making, human error losses, fraud or other irregularities. However, other procedures,
policies, guidelines and compliance regulations, as discussed in this report, are in place to mitigate any
possible and/or suspected irregularities. Nothing has come to the attention of the AC, Board and/or the
Management that there is any deficiency in the internal controls that resulted to significant loss and/
or material financial statements misstatements.
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CORPORATE GOVERNANCE
INTERNAL AUDIT
Practice 13: The Company should establish an internal audit function that is independent of the
activities it audits when necessary taking into consideration the size and complexity of the Group.
The Board recognises and is responsible for designing, implementing and maintaining a system of
internal control processes relevant to the preparation and fair presentation of financial statements that
are free from material misstatements, whether due to fraud or error; selecting and applying appropriate
accounting policies; and making accounting estimates that are reasonable in the circumstances, to
safeguard shareholders’ investments and the Group’s business and assets. The Company is in the
process of setting up a separate internal audit function. However, the Board believes that the existing
systems of internal controls are adequate, taking into consideration the corporate structure and scope
of the Group’s operations.
The key element in the Group’s internal system is the control which Management exercises over
expenditure for investments and capital spending, with the various levels of approvals documented in
the authorisation limits granted by the Board.
Practice 14: The Company is to engage in regular, effective and fair communication with
shareholders.
The Board is mindful of the obligation to provide regular, effective and fair communication with
shareholders. Information is communicated to the shareholders on a timely basis. Where inadvertent
disclosure has been made to a select group, the Company will make the same disclosure publicly to all
others as soon as practicable. The Board provides shareholders with an assessment of the Company’s
performance, position and prospects via interim and annual results announcements and other ad-hoc
announcements as required by the Singapore Exchange.
Results and annual reports are announced and/or issued within the mandatory period. All the
shareholders of the Company receive the annual report and the notice of the AGM.
Practice 15: Encouragement of greater shareholders’ participation at AGM, and allow shareholders the
opportunity to communicate their views on various matters affecting the Company.
All information on the Group’s performance is published on SGXNET. The annual report and notice
of AGM are sent to all shareholders of the Company. The notice of AGM is advertised in a Singapore
newspaper. At the AGM, shareholders are given the opportunity to opine their views and inquire the
Directors or Management matters regarding the Group.
Shareholders have the opportunity to participate effectively and to vote in AGMs. They are allowed to
vote in person or by appointed proxy.
During the AGM, the resolutions on each substantially separate issues are disclosed separately
and not bundled together unless the resolutions are interdependent and linked so as to form one
significant proposal and clear explanation and reasons are to be provided together with its material
implications.
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CORPORATE GOVERNANCE
The Company adopts the practices of preparation of minutes or notes of AGM, whereby there are
substantial comments or queries from the shareholders and response from the Board and Management,
and to make these minutes or notes available to shareholders upon their request. In addition,
the Company practices transparency during the AGM whereby the Chairman of the Nominating,
Remuneration and Audit Committee and the Company’s external auditors are present and available to
address shareholders’ questions and concerns about the conduct of the Company and/or audit and
the preparation and content of the Independent Auditors’ Report.
RISK MANAGEMENT
The Company is aware that each business and transaction of operation carries risk whether internally
and/or externally in the form of environmental, operational, financial and/or Management decision making
risk. The operational risk is the risk of loss resulting from inadequate or failed internal processes, people
and systems, or from external events. Other risks would include legal risk and strategic risk (the risk
of a loss arising from a poor strategic business decision). The Company’s Financial Risk management
and policies are further outlined in the Annual Report under heading Financial Risk Management.
The Group regularly reviews and improves its business and operations activities to identify areas of
significant business risks as well as respond appropriately to control and mitigate these risks. The
Company reviews all significant control policies and procedures and highlights all significant matters
to the AC and the Board.
DEALING IN SECURITIES
In line with Adroit’s Best Practices Guide in Dealing in Securities (the “Best Practices Guide”) adopted
and reviewed from time to time, the Company has in place a code of conduct on share dealings by
Officers. This code sets out the statutory restrictions on insider trading as well as the recommendations
of the Best Practices Guide on securities transactions. This has been made known to the Officers,
including the Directors, staff, any relevant body corporate and officers of the Company and the Group,
not to deal during the period commencing one (1) month before the announcement of the Company’s
interim or annual financial statements/results, as the case may be, and ending on the date of the
announcement of the relevant results.
The Officers have been informed that to deal in the Company’s securities, as well as securities of other
listed companies, when they are in possession of information that is not generally available but, if it
were, would be likely materially to affect the price of those securities in relation to those securities and
relates to any transaction (actual or expected) involving both those bodies corporate or involving one of
them and securities of the other are prohibited and is a subject to the law. The Company, while having
provided the window periods for dealing in the Company’s securities, has its own internal compliance
code in providing guidance to its officers with regards to dealing in the Company’s securities including
reminders that the law on insider trading is applicable at all times.
In the opinion of the AC, to the best of their knowledge and belief, the Company complies with Adroit’s
Best Practices Guide.
MATERIAL CONTRACTS
There were no material contracts of the Company, or its subsidiaries involving the interests of each
Director or controlling shareholder, either still subsisting at the end of the financial year or if not then
subsisting, entering into since the end of the previous financial year.
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CORPORATE GOVERNANCE
INTERESTED PERSON TRANSACTIONS
The Company has established procedures to ensure that all transactions with interested persons are
reported in a timely manner to the AC and that transactions are conducted on an arm’s length basis and
are not prejudicial to the interests of the shareholders. The disclosure of interested person transactions
for the financial year ended 31 December 2009 is as follows:
The directors present their report to the members together with the audited consolidated financial
statements of the Group for the financial year ended 31 December 2009 and the statement of financial
position of the Company as at 31 December 2009.
Directors
The directors of the Company in office at the date of this report are as follows:
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 the acquisition of shares in, or debentures of, the Company or any other body corporate, other than
as disclosed under “Share Options” of this report.
(a) According to the register of directors’ shareholdings, none of the directors holding office at the
end of the financial year had any interest in the shares or debentures of the Company or its related
corporations, except as follows:
The Company
(No. of ordinary shares)
Neo Kim Hock – – 98,995,176 98,995,176
Richard Chan Sing En 57,300,000 39,000,000 – 18,300,000
(b) According to the register of directors’ shareholdings, none of the directors holding office at
the end of the financial year had interests in the options to subscribe for ordinary shares of the
Company.
(c) There were no changes in any of the above mentioned interests between the end of the financial
year and 21 January 2010.
Since the end of the previous 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,
except as disclosed in the accompanying financial statements and in this report, and except that
certain directors have employment relationships with the Company, and have received remuneration
in those capacity.
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23
Share Options
(a) Adroit Innovations Limited Share Option Scheme II (the “ESOS II”)
Under the ESOS II, the Compensation Committee may grant to executives of the Group and
non-executive directors of the Company options to subscribe for unissued ordinary shares in the
Company. Executive and non-executive directors who are controlling shareholders and associates
of such controlling shareholders are not eligible to participate in the ESOS II.
Under the ESOS II, the Compensation Committee may grant options at a price equivalent to the
then prevailing market price of the shares or at a discount of up to twenty per cent of the market
price. Where the options are granted at the then prevailing market price, the options may be
exercised not earlier than the first anniversary of the date on which the option is offered. Where
the options are granted at a discount to the then prevailing market price, the options may be
exercised not earlier than the second anniversary of the date on which the option is offered.
Particulars of the ESOS II and the options granted in 2001 under the ESOS II (hereinafter called
the “ESOS II Options 2001”) were set out in the Directors’ Report for the financial year ended
30 June 2001.
Particulars of the ESOS II and the options granted in 2002 under the ESOS II (hereinafter called
the “ESOS II Options 2002”) were set out in the Directors’ Report for the financial year ended
30 June 2002.
The share options granted by the Compensation Committee pursuant to the ESOS II to executives
of the Group were forfeited as the executives left the Group before the options were vested.
As at 31 December 2009 and 2008, no further options to take up unissued shares of the Company
were granted.
No further options will be granted under the ESOS II after 15 May 2010, provided always it may
be extended for any further period or periods thereafter with the approval of shareholders at a
general meeting of the Company and any relevant approvals which may then be required.
Pursuant to Rule 852 of the Listing Manual of the Singapore Exchange Securities Trading Limited
(the “SGX-ST”), in addition to information disclosed elsewhere in this report, it is reported that
during the financial year:
(i) the Remuneration Committee administering the share option schemes comprised directors
Mr Goh Boon Kok (Chairman), Mr Calvin Lim Huan Kim and Mr Richard Chan Sing En;
(ii) no options have been granted to controlling shareholders or their associates, directors and
employees of the Group and no employee has received 5% or more of the total options
available under the scheme;
(iii) there were no options granted at a discount during the financial year ended 31 December
2009; and
(iv) no shares have been issued during the financial year by virtue of the exercise of option to
take up unissued shares of the Company and there were no unissued shares under option
at the end of the financial year.
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Audit Committee
The members of the Audit Committee at the end of the financial year were as follows:
The Audit Committee carried out its functions in accordance with Section 201B(5) of the Singapore
Companies Act Cap, 50. In performing those functions, the Committee:
(a) reviewed the effectiveness of the Company’s material internal controls, including financial,
operational and compliance controls and risk management;
(b) reviewed the audit plan of the Company’s independent auditors and, if any, their report on the
weaknesses of internal accounting controls arising from the statutory audit;
(c) reviewed the assistance given by the Company’s management to the independent auditors;
(d) reviewed the statement of financial position of the Company and the consolidated financial
statements of the Group for the year ended 31 December 2009 before their submission to the
Board of Directors, as well as the independent auditors’ report on the statement of financial
position of the Company and the consolidated financial statements of the Group; and
(e) recommended to the Board of Directors the independent auditors to be nominated, approve the
compensation of the auditors, and review the scope and results of the audit.
The Audit Committee has recommended to the Board of Directors that the independent auditors,
Moore Stephens LLP, be nominated for reappointment at the forthcoming Annual General Meeting of
the Company.
Independent Auditors
The independent auditors, Moore Stephens LLP, have expressed their willingness to accept
reappointment.
............................
NEO KIM HOCK
............................
JAMES HONG GEE HO
Singapore
24 March 2010
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25
STATEMENT BY DIRECTORS
For the financial year ended 31 December 2009
(a) the statement of financial position of the Company and the consolidated financial statements of
the Group as set out on pages 28 to 96 are drawn up so as to give a true and fair view of the
state of affairs of the Company and of the Group as at 31 December 2009 and of the results of
the business, changes in equity and cash flows of the Group for the financial year then ended;
and
(b) at the date of this statement, there are reasonable grounds to believe that the Company will be
able to pay its debts as and when they fall due.
............................
NEO KIM HOCK
............................
JAMES HONG GEE HO
Singapore
24 March 2010
26 ADROIT INNOVATIONS LIMITED 09
annual report
Management is responsible for the preparation and fair presentation of these financial statements in
accordance with the provisions of the Singapore Companies Act, Cap. 50 (the “Act”) and Singapore
Financial Reporting Standards. This responsibility includes:
(a) 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 a true and fair profit or 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
as to 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 auditors’ 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 auditors consider internal controls relevant to the entity’s
preparation and fair presentation of the financial statements 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 controls. An audit also includes evaluating the appropriateness of accounting
policies used and 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.
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27
In our opinion,
(a) the statement of financial position of the Company and the consolidated financial statements
of the Group are properly drawn up in accordance with the provisions of the Act and Singapore
Financial Reporting Standards so as to give a true and fair view of the state of affairs of the
Company and of the Group as at 31 December 2009 and the results, changes in equity and cash
flows of the Group for the financial year ended on that date; and
(b) 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.
Singapore
24 March 2010
28 ADROIT INNOVATIONS LIMITED 09
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Group
Note 2009 2008
S$ S$
Expenses
– Raw materials and consumables used (588,368) (200,021)
– Employee benefits 7 (1,446,996) (1,317,940)
– Finance 8 (267,851) (281,114)
– Others 6 (3,391,084) (5,417,825)
Total expenses (5,694,299) (7,216,900)
Group Company
Note 2009 2008 2009 2008
S$ S$ S$ S$
ASSETS
Current assets
Cash and cash equivalents 11 1,311,020 1,050,572 87,981 78,179
Financial assets, at fair value
through profit or loss 12 23,832,481 11,327,745 – –
Trade and other receivables 13 667,875 218,837 6,783 4,704
Inventories 14 6,137 7,447 – –
Other current assets 15 187,223 827,318 36,985 56,874
Development properties 16 8,968,053 7,698,641 – –
34,972,789 21,130,560 131,749 139,757
Non-current assets
Investments in subsidiaries 17 – – 1,105,063 104,499
Loans to subsidiaries 17 – – 28,961,367 28,564,383
Investment in and loan to
associated company 18 – 1,270,398 – –
Investment properties 19 9,631,644 9,704,532 – –
Financial assets, available-for-sale 20 – 275,216 – 275,216
Property and equipment 21 3,279,235 3,036,229 236,630 285,507
Intangible assets 22 251,188 555,113 – –
Other non-current assets 15 8,055 7,770 – –
Deferred tax assets 27 9,636 – – –
13,179,758 14,849,258 30,303,060 29,229,605
LIABILITIES
Current liabilities
Trade and other payables 23 2,977,137 2,357,501 544,991 861,067
Current income tax liabilities 19,550 101,499 – –
Borrowings 24 1,399,825 1,464,792 24,456 25,400
4,396,512 3,923,792 569,447 886,467
Non-current liabilities
Trade and other payables 23 257,310 – – –
Employee compensation 26 379,085 270,705 – –
Borrowings 24 4,254,688 4,051,710 75,318 97,367
Deferred tax liabilities 27 819,267 37,808 – –
5,710,350 4,360,223 75,318 97,367
EQUITY
Capital and reserves attributable
to the owners of the Company
Share capital 28 41,587,084 41,587,084 41,587,084 41,587,084
Reserves 29 (1,775,246) (2,570,501) – (130,499)
Accumulated losses (2,879,406) (12,096,187) (11,797,040) (13,071,057)
36,932,432 26,920,396 29,790,044 28,385,528
Minority interests 1,113,253 775,407 – –
Total Equity 38,045,685 27,695,803 29,790,044 28,385,528
Balance at 1 January 2009 41,587,084 (130,499) (2,440,002) (12,096,187) 26,920,396 775,407 27,695,803
Total comprehensive
ADROIT INNOVATIONS LIMITED
income for the year – 130,499 664,756 9,216,781 10,012,036 337,846 10,349,882
Balance at 1 January 2008 40,281,192 (25,188) (942,709) 2,030,223 41,343,518 2,534,196 43,877,714
For the financial year ended 31 December 2009
Balance at 31 December 2008 41,587,084 (130,499) (2,440,002) (12,096,187) 26,920,396 775,407 27,695,803
(cont’d)
Note 2009 2008
S$ S$
These notes form an integral part of and should be read in conjunction with the accompanying financial
statements.
1 General Information
Adroit Innovations Limited (the “Company”) is listed on the Singapore Stock Exchange and
incorporated and domiciled in Singapore. The address of its registered office and principal place
of business is 3 Phillip Street, #09-03 Commerce Point, Singapore 048693.
The principal activity of the Company is that of an investment holding company. The principal
activities of its subsidiaries and associated company are set out in Notes 17(b) and 18(d),
respectively.
The consolidated financial statements of the Group and the statement of financial position of the
Company, which are expressed in Singapore Dollar, have been prepared in accordance with the
provisions of the Singapore Companies Act, Cap. 50 and Singapore Financial Reporting Standards
(“FRS”). The financial statements have been prepared under the historical cost convention, except
as disclosed in the accounting policies below.
The preparation of financial statements in conformity with FRS requires management to exercise
its judgement in the process of applying the Group’s accounting policies. It also requires the use
of certain critical accounting estimates and assumptions. The areas involving a higher degree
of judgement or complexity, or areas where assumptions and estimates are significant to the
financial statements, are disclosed in Note 3.
On 1 January 2009, the Group adopted the new or amended FRS and Interpretations to FRS
(“INT FRS”) that are mandatory for application from that date. Changes to the Group’s accounting
policies have been made as required, in accordance with the transitional provisions in the
respective FRS and INT FRS.
The following are the new or revised FRS and INT FRS that are relevant to the Group:
• FRS 1 (revised) Presentation of Financial Statements, requires all changes in equity arising
from transactions with owners in their capacity as owners to be presented separately from
components of comprehensive income. As a result, the Group presents in the consolidated
statement of changes in equity all owner changes in equity, whereas all non-owner changes
in equity are presented in the consolidated statement of comprehensive income.
Comparative information has been re-presented to conform with the revised standard.
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The following are the new or revised FRS and INT FRS that are relevant to the Group: (cont’d)
• FRS 23, Borrowing Costs has been revised to require capitalisation of borrowing costs that
are directly attributable to the acquisition, construction or production of a qualifying asset.
The revised standard did not have any impact on the financial statements of the Group
upon application as the Group has been capitalising the relevant borrowing costs.
• Amendment to FRS 107, Financial Instruments: Disclosures. The amendments to FRS 107
expand the disclosures required in respect of fair value measurement and liquidity risk. Fair
value measurements are to be disclosed by source of inputs using a three level hierarchy
for each class of financial instrument. The amendment to FRS 107 requires disclosure of
fair value measurements by level of the following fair value measurement hierarchy:
(i) quoted prices (unadjusted) in active markets for identical assets or liabilities (Level
1);
(ii) inputs other than quoted prices included within Level 1 that are observable for the
asset or liability, either directly (is as prices) or indirectly (i.e. derived from prices)
(Level 2); and
(iii) inputs for the asset or liability that are not based on observable market data
(unobservable inputs) (Level 3).
In addition, reconciliation between the beginning and ending balance for Level 3 fair value
measurements is now required, as well as significant transfers between Level 1 and Level
2 fair value measurements. The amendments also clarify the requirements for liquidity
risk disclosures. The fair value measurement disclosures and liquidity risk disclosures are
presented in Note 31 to the financial statements.
The Group has elected not to provide comparative information for these expanded
disclosures in the current year in accordance with the transitional reliefs offered in these
amendments.
• FRS 108, Operating Segments requires disclosure of information about the Group’s
operating segments and replaces the requirement to determine primary and secondary
reporting segments of the Group. The Group’s reportable segments have been redesignated
as a result of adoption of FRS 108 operating segments. Disclosures of each reportable
segments, including the revised comparative information are shown in Note 33 to the
financial statements.
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35
(i) Subsidiaries
Subsidiaries are entities over which the Group has the power to govern the financial and
operating policies, generally accompanied by a shareholding giving rise to the majority
of the voting rights. The existence and effect of potential voting rights that are currently
exercisable or convertible are considered when assessing whether the Group controls
another entity.
The purchase method of accounting is used to account for the acquisition of subsidiaries.
The cost of an acquisition is measured as the fair value of the assets given, equity
instruments issued or liabilities incurred or assumed at the date of exchange, plus costs
directly attributable to the acquisition. Identifiable assets acquired and liabilities and
contingent liabilities assumed in a business combination are measured initially at their fair
values on the date of acquisition, irrespective of the extent of any non-controlling interest.
Any excess of the cost of acquisition over the fair values of the identifiable net assets
acquired is recognised as goodwill Note 2(g).
Subsidiaries are consolidated from the date on which control is transferred to the Group.
They are de-consolidated from the date on which control ceases.
Minority interests are that part of the net results of operations and of net assets of a
subsidiary attributable to interests which are not owned directly or indirectly by the Group.
They are measured at the minorities’ share of fair value of the subsidiaries’ identifiable
assets and liabilities at the date of acquisition by the Group and the minorities’ share of
changes in equity since the date of acquisition, except when the minorities’ share of losses
in a subsidiary exceeds its interests in the equity of that subsidiary. In such cases, the
excess and further losses applicable to the minorities are attributed to the owners of the
Company, unless the minorities have a binding obligation to, and are able to, make good
the losses. When that subsidiary subsequently reports profits, the profits applicable to the
minority interests are attributed to the owners of the Company until the minorities’ share
of losses previously absorbed by the owners of the Company are fully recovered.
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The Group applies a policy of treating transactions with minority interests as transactions
with parties external to the Group. Disposals to minority interests result in gains and losses
for the Group are recognised in profit or loss. Purchases from minority interests result in
goodwill, being the difference between any consideration paid and the Group’s incremental
share of the carrying value of the identifiable net assets of the subsidiary.
Associated companies are entities over which the Group has significant influence, but not
control, and generally accompanied by a shareholding giving rise to between and including
20% and 50% of the voting rights. Investments in associated companies are accounted
for in the consolidated financial statements using the equity method of accounting.
Investments in associated companies in the consolidated statement of financial position
includes goodwill (net of any accumulated impairment losses) identified on acquisition and
is assessed for impairment as part of the investment.
In applying the equity method of accounting, the Group’s share of its associated
companies’ post-acquisition profits or losses are recognised in profit or loss and its share
of post-acquisition movements in reserves is recognised in other comprehensive income
directly. These post-acquisition movements are adjusted against the carrying amount of
the investment. When the Group’s share of losses in an associated company equals or
exceeds its interest in the associated company, including any other unsecured non-current
receivables, the Group does not recognise further losses, unless it has obligations or has
made payments on behalf of the associated company.
Unrealised gains on transactions between the Group and its associated companies are
eliminated to the extent of the Group’s interest in the associated companies. Unrealised
losses are also eliminated unless the transaction provides evidence of an impairment
of the asset transferred. The accounting policies of associated companies have been
changed where necessary to ensure consistency with the accounting policies adopted by
the Group.
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37
Revenue comprises the fair value of the consideration received or receivable for rendering of
services, net of services tax and discounts, and after eliminating sales within the Group. Revenue
is recognised as follows:
Revenue from sterilisation contracts are recognised when sterilisation services have been
rendered.
Interest income is recognised on an accrual basis using the effective interest method.
Rental income from operating leases is recognised on a straight-line basis over the lease
term.
Revenue from the sale of development properties is recognised using the percentage-
of-completion method based on the stages of completion. The stage of completion is
measured by reference to the contract per certification by architects. No revenue is
recognised for unsold units.
Tuition fees and course fees and related instruction costs are recognised over the period
of instruction. Examination fees are generally recognised over the course assessment
period. The amount of fees relating to future periods is included in course fee received in
advance.
An investment property is a property held for long-term rental yields and/or for capital appreciation
or for a currently indeterminate use. It does not include properties for sale in the ordinary
course of business, used in the production or supply of goods or services, or for administrative
purposes.
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Investment properties are initially recognised at cost, including transaction costs and subsequently
carried at fair value, which reflects market conditions at the end of the reporting period. Gains
or losses arising from changes in the fair values of investment properties are included in profit
or loss in the year in which they arise.
Investment properties are subject to renovations or improvements at regular intervals. The cost
of major renovations and improvements is capitalised and the carrying amounts of the replaced
components are recognised in profit or loss. The cost of maintenance, repairs and minor
improvements is recognised in profit or loss when incurred.
On disposal of an investment property, the difference between the disposal proceeds and the
carrying amount is recognised in profit or loss.
(i) Measurement
(1) All property and equipment are initially recognised at cost and subsequently carried
at cost less accumulated depreciation and accumulated impairment losses, if any.
(2) The cost of an item of property and equipment initially recognised includes its
purchase price and any cost that is directly attributable to bringing the asset to the
location and condition necessary for it to be capable of operating in the manner
intended by management. The projected cost of dismantlement, removal or restoration
is also included as part of the cost of property and equipment if the obligation for the
dismantlement, removal or restoration is incurred as a consequence of acquiring or
using the asset.
(ii) Depreciation
Freehold land is not depreciated. Depreciation of other property and equipment is calculated
using the straight-line method to allocate their depreciable amounts over their estimated
useful lives as follows:
Useful lives
Freehold building 20 years
Renovations 5 years
Furniture and fittings 5 years
Office, computer and other equipment 3, 5 and 8 years
Cobalt isotope 10 years
Motor vehicles 7 and 8 years
The residual values, estimated useful lives and depreciation method of property and
equipment are reviewed, and adjusted as appropriate, at the end of each reporting period.
The effects of any revision are recognised in profit or loss when the changes arise.
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39
Subsequent expenditure relating to property and equipment that has already been
recognised is added to the carrying amount of the asset only when it is probable that future
economic benefits associated with the item will flow to the Group and the cost of the item
can be measured reliably. All other repair and maintenance expenses are recognised in
profit or loss when incurred.
(iv) Disposal
On disposal of an item of property and equipment, the difference between the disposal
proceeds and its carrying amount is recognised in profit or loss.
(i) Goodwill
Goodwill represents the excess of the cost of an acquisition over the fair value of the
Group’s share of the identifiable assets, liabilities and contingent liabilities of the acquired
subsidiaries and associated companies at the date of acquisition.
Gains and losses on the disposal of subsidiaries and associated companies include the
carrying amount of goodwill relating to the entity sold.
Intangible assets acquired separately are measured initially at cost. Intangible assets
are carried at cost less accumulated amortisation and accumulated impairment losses.
Amortisation is recognised on a straight-line basis over their estimated useful lives. The
estimated useful life and amortisation method are reviewed at the end of each annual
reporting period, with the effect of any changes in estimate being accounted for on a
prospective basis.
40 ADROIT INNOVATIONS LIMITED 09
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Intangible assets with finite useful lives are amortised over the estimated useful lives and
assessed for impairment whenever there is an indication that the intangible asset may
be impaired. The amortisation period and the amortisation method are reviewed at least
at each financial year-end. Changes in the expected useful life or the expected pattern
of consumption of future economic benefits embodied in the asset is accounted for by
changing the amortisation period or method, as appropriate, and are treated as changes
in accounting estimates. The amortisation expense on intangible assets with finite lives
is recognised in profit or loss in the expense category consistent with the function of the
intangible asset.
Intangible assets with indefinite useful lives or not yet available for use are tested for
impairment annually, or more frequently if the events and circumstances indicate that the
carrying value may be impaired either individually or at the cash-generating unit level. Such
intangible assets are not amortised. The useful life of an intangible asset with an indefinite
useful life is reviewed annually to determine whether the useful life assessment continues
to be supportable. If not, the change in useful life from indefinite to finite is made on a
prospective basis.
Gains or losses arising from derecognition of an intangible asset are measured as the
difference between the net disposal proceeds and the carrying amount of the asset and
are recognised in profit or loss when the asset is derecognised.
Borrowing costs are recognised in profit or loss using the effective interest method except for
those costs that are directly attributable to borrowings acquired specifically for the construction of
development properties. The actual borrowing costs incurred during the period up to the issuance
of the temporary occupation permit less any investment income on temporary investments of
these borrowings, are capitalised in the cost of properties under development.
Investments in subsidiaries are carried at cost less accumulated impairment losses in the
Company’s statement of financial position. Associated companies are accounted for by the Group
using the equity method. At the end of the reporting period, the Group’s investment in associated
companies are stated at cost of investment less any impairment losses, plus the Group’s share of
post-acquisition reserves. On disposal of investments in subsidiaries and associated companies,
the difference between the disposal proceeds and the carrying amounts of the investments are
recognised in profit or loss.
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(i) Goodwill
Goodwill is tested for impairment annually and whenever there is an indication that the
goodwill may be impaired. Goodwill included in the carrying amount of an investment in
an associated company is tested for impairment as part of the investment, rather than
separately.
For the purpose of impairment testing, goodwill is allocated to each of the Group’s cash-
generating-units (“CGU”) expected to benefit from synergies arising from the business
combination.
An impairment loss is recognised when the carrying amount of a CGU, including the
goodwill, exceeds the recoverable amount of the CGU. Recoverable amount of a CGU is
the higher of the CGU’s fair value less cost to sell or value-in-use.
The total impairment loss of a CGU is allocated first to reduce the carrying amount of
goodwill allocated to the CGU and then to the other assets of the CGU pro-rata on the
basis of the carrying amount of each asset in the CGU.
Intangible assets with a finite useful life, property and equipment and investments in
subsidiaries and associated companies are tested for impairment whenever there is any
objective evidence or indication that these assets may be impaired. Intangible asset with
an infinite useful life are tested for impairment annually and whenever there is an indication
that this intangible asset may be impaired.
For the purpose of impairment testing, the recoverable amount (i.e. the higher of the fair
value less cost to sell or value-in-use) is determined on an individual asset basis unless
the asset does not generate cash inflows that are largely independent of those from other
assets. If this is the case, the recoverable amount is determined for the CGU to which the
asset belongs.
If the recoverable amount of the asset (or CGU) is estimated to be less than its carrying
amount, the carrying amount of the asset (or CGU) is reduced to its recoverable amount.
The difference between the carrying amount and recoverable amount is recognised as an
impairment loss in profit or loss.
42 ADROIT INNOVATIONS LIMITED 09
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An impairment loss for an asset other than goodwill is reversed if, and only if, there has
been a change in the estimates used to determine the assets’ recoverable amount since the
last impairment loss was recognised. The carrying amount of this asset is increased to its
revised recoverable amount, provided that this amount does not exceed the carrying amount
that would have been determined (net of any accumulated amortisation or depreciation) had
no impairment loss been recognised for the asset in prior years. A reversal of impairment
loss is recognised in profit or loss.
For the purpose of the presentation in the consolidated statement of cash flows, cash and cash
equivalents include cash on hand and deposits with financial institutions which are subject to
insignificant risk of change in value.
(i) Classification
The Group classifies its financial assets in the following categories: at fair value through
profit or loss, loans and receivables and available-for-sale. The classification depends on
the nature of the asset and the purpose for which the assets were acquired. Management
determines the classification of its financial assets at initial recognition.
Financial assets designated as at fair value through profit or loss at inception are those that
are managed and their performances are evaluated on a fair value basis, in accordance
with a documented Group investment strategy.
Loans and receivables are non-derivative financial assets with fixed or determinable
payments that are not quoted in an active market. These are presented as current assets,
except for those maturing later than 12 months after the end of the reporting period which
are presented as non-current assets. Loans and receivables are presented as “trade and
other receivables” and “cash and cash equivalents” in the statement of financial position.
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Financial assets, available-for-sale are non-derivatives that are either designated in this
category or not classified in any of the other categories. These are presented as non-current
assets unless management intends to dispose of the assets within 12 months after the end
of the reporting period.
Regular way purchases and sales of financial assets are recognised on a trade-date basis
– the date on which the Group commits to purchase or sell the asset.
Financial assets are derecognised when the rights to receive cash flows from the financial
assets have expired or have been transferred and the Group has transferred substantially
all risks and rewards of ownership. On disposal of a financial asset, the difference between
the carrying amount and the sales proceeds is recognised in profit or loss. Any amount in
the fair value reserve relating to that asset is transferred to profit or loss.
Financial assets are initially recognised at fair value plus transaction costs except for
financial assets at fair value through profit or loss, which are recognised at fair value.
Transaction costs for financial assets at fair value through profit or loss are recognised
immediately as expense.
Financial assets, both available-for-sale and at fair value through profit or loss, are
subsequently carried at fair value. Loans and receivables are subsequently carried at
amortised cost using the effective interest method.
Changes in the fair values of financial assets, at fair value through profit or loss including
the effects of currency translation, interest and dividends, are recognised in profit or loss
when the changes arise.
(v) Impairment
The Group assesses at the end of each reporting period whether there is objective evidence
that a financial asset or a group of financial assets is impaired and recognises an allowance
for impairment when such evidence exists.
Significant financial difficulties of the debtor, probability that the debtor will enter
bankruptcy, and default or significant delay in payments are objective evidence that these
financial assets are impaired. The carrying amount of these assets is reduced through the
use of an impairment allowance account which is calculated as the difference between
the carrying amount and the present value of estimated future cash flows, discounted at
the original effective interest rate. When the asset becomes uncollectible, it is written off
against the allowance account. Subsequent recoveries of amounts previously written off
are recognised against the same line item in profit or loss.
The allowance for impairment loss account is reduced through profit or loss in a subsequent
period when the amount of impairment loss decreases and the related decrease can be
objectively measured. The carrying amount of the asset previously impaired is increased
to the extent that the new carrying amount does not exceed the amortised cost, had no
impairment been recognised in prior periods.
If any evidence of impairment exists, the immediate loss that was recognised in the fair
value reserve is reclassified to profit or loss. The cumulative loss is measured as the
difference between the acquisition cost and the current fair value, less any impairment
previously recognised as an expense.
The impairment losses recognised in profit or loss on equity securities are not reversed
through profit or loss. Any increase in fair value subsequent to an impairment loss is
recognised in other comprehensive income.
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Development properties are those properties, which are held with the intention of development
and sale in the ordinary course of business. These are stated at the lower of cost plus, where
appropriate, a portion of attributable profit, and estimated net realisable value, net of progress
billings. Net realisable value represents the estimated selling price less costs to be incurred in
selling the properties.
The cost of properties under development comprise specifically identified costs, including
acquisition costs, development expenditure, borrowing costs and other related expenditure.
Borrowing costs payable on loans funding a development property are also capitalised, on a
specific identification basis, as part of the cost of the development property until the completion
of development.
Defined contribution plans are post-employment benefit plans under which the Group
pays fixed contributions into separate entities such as the Central Provident Fund on a
mandatory, contractual or voluntary basis. The Group has no further payment obligations
once the contributions have been paid. The Group’s contributions are recognised as
employee benefits expense when they are due, unless they can be capitalised as an
asset.
A subsidiary in the Group has an unfunded defined benefit plan covering substantially all
of their eligible permanent employees in accordance with the Labour Law No.13 Year 2004
(“Law No.13/2004”) of Indonesia. The obligation for Law No.13/2004 has been accounted
for using the projected unit credit method, with actuarial valuations being carried out at the
end of each reporting period. Actuarial gains/(losses), current service costs, interest costs
and effects of curtailments and settlements, if any, are charged directly to current year’s
profit or loss. Past service costs are recognised immediately to the extent that the benefits
are already vested and otherwise are amortised over the average remaining working lives.
The expenses are disclosed under employee benefits in the statement of comprehensive
income.
The Company has issued corporate guarantees to banks for bank borrowings of its subsidiaries.
These guarantees are financial guarantees as they require the Company to reimburse the banks
if the subsidiaries fail to make principal or interest payments when due in accordance with the
terms of their borrowings.
Financial guarantees are initially recognised at fair value plus transaction costs in the Company’s
statement of financial position.
Financial guarantees are subsequently amortised to profit or loss over the period of the
subsidiaries’ borrowings, unless it is probable that the Company will reimburse the bank for an
amount higher than the amortised amount. In this case, the financial guarantees shall be carried
at the expected amount payable to the bank in the Company’s statement of financial position.
(p) Borrowings
Borrowings are presented as current liabilities unless the Group has an unconditional right to
defer settlement for at least 12 months after the end of the reporting period.
Borrowings are initially recognised at fair value (net of transaction costs) and subsequently
carried at amortised cost. Any difference between the proceeds (net of transaction costs) and
the redemption value is recognised in profit or loss over the period of the borrowings using the
effective interest method.
Trade and other payables are initially recognised at fair value, and subsequently carried at
amortised cost using the effective interest method.
(r) Leases
The Group leases motor vehicles under finance leases and equipment and office under
operating lease from non-related parties.
Leases where the Group assumes substantially all risks and rewards incidental to
ownership of the leased assets are classified as finance leases.
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The leased assets and the corresponding lease liabilities (net of finance charges)
under finance leases are recognised on the statement of financial position as property
and equipment and borrowings respectively, at the inception of the leases based on
the lower of the fair value of the leased assets and the present value of the minimum
lease payments.
Each lease payment is apportioned between the finance expense and the reduction
of the outstanding lease liability. The finance expense is recognised in profit or loss
on the basis that reflects a constant periodic rate of interest on the finance lease
liability.
Leases of assets where substantially all risks and rewards incidental to ownership
are retained by the lessor are classified as operating leases. Payments made under
operating leases (net of any incentives received from the lessor) are recognised in
profit or loss on a straight-line basis over the period of the lease.
The Group leases investment properties under operating leases to non-related parties.
Leases of investment properties where the Group retains substantially all risks and
rewards incidental to ownership are classified as operating leases. Rental income
from operating leases (net of any incentives given to the lessees) is recognised in
profit or loss on a straight-line basis over the lease term.
Initial direct costs incurred by the Group in negotiating and arranging operating leases
are added to the carrying amount of the leased assets and recognised as an expense
in profit or loss over the lease term on the same basis as the lease income.
(s) Inventories
Inventories are carried at the lower of cost, using the weighted average method, and net realisable
value. Inventories comprise materials and supplies to be consumed in the rendering of sterilisation
services.
Net realisable value is the estimated selling price of sterilisation services less applicable costs of
conversation to complete their services and applicable variable selling expenses.
48 ADROIT INNOVATIONS LIMITED 09
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Current income tax for current and prior periods is recognised at the amounts expected to be
paid to or recovered from the tax authorities, using the tax rates and tax laws that have been
enacted or substantially enacted by the end of the reporting period.
Deferred income tax is recognised for all temporary differences arising between the tax bases
of assets and liabilities and their carrying amounts in the financial statements except when the
deferred income tax arises from the initial recognition of goodwill or an asset or liability in a
transaction that is not a business combination and affects neither accounting nor taxable profit
or loss at the time of the transaction.
A deferred tax asset is recognised to the extent that it is probable that future taxable profit will
be available against which the deductible temporary differences and tax losses can be utilised.
(i) at the tax rates that are expected to apply when the related deferred tax asset is realised or
the deferred tax liability is settled, based on tax rates and tax laws that have been enacted
or substantially enacted by the end of the reporting period; and
(ii) based on the tax consequence that will follow from the manner in which the Group expects,
at the end of the reporting period, to recover or settle the carrying amounts of its assets
and liabilities.
Current and deferred income taxes are recognised as income or expense in profit or loss, except
to the extent that the tax arises from a business combination or a transaction which is recognised
directly in equity. Deferred tax arising from a business combination is adjusted against goodwill
on acquisition.
Provisions for other liabilities and charges are recognised when the Group has a present legal
or constructive obligation as a result of past events, it is more likely than not that an outflow of
resources will be required to settle the obligation and the amount has been reliably estimated.
ADROIT INNOVATIONS LIMITED 09
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49
Items included in the financial statements of each entity in the Group are measured using
the currency of the primary economic environment in which the entity operates (“functional
currency”). The financial statements are presented in Singapore Dollar, which is the
Company’s functional and presentation currency.
Transactions in a currency other than the functional currency (“foreign currency”) are
translated into the functional currency using the exchange rates prevailing at the dates of
the transactions. Currency translation differences from the settlement of such transactions
and from the translation of monetary assets and liabilities denominated in foreign currencies
at the closing rates at the end of the reporting period are recognised in profit or loss, unless
they arise from borrowings in foreign currencies, other currency instruments designated
and qualifying as net investment hedges and net investment in foreign operations. Those
currency translation differences are recognised in the currency translation reserve in the
consolidated financial statements and transferred to profit or loss as part of the gain or
loss on disposal of the foreign operation. Non-monetary items measured at fair values in
foreign currencies are translated using the exchange rates at the date when the fair values
are determined.
The results and financial position of all the Group entities (none of which has the currency of
a hyperinflationary economy) that have a functional currency different from the presentation
currency are translated into the presentation currency as follows:
(1) Assets and liabilities are translated at the closing rate at the reporting date;
(2) Income and expenses are translated at an average exchange rate (unless the average
is not a reasonable approximation of the cumulative effect of the rates prevailing on
the transaction dates, in which case income and expenses are translated using the
exchange rates at the dates of the transactions); and
(3) All resulting currency translation differences are recognised in the currency translation
reserve.
Goodwill and fair value adjustments arising on the acquisition of foreign operations on or after
1 January 2005 are treated as assets and liabilities of the foreign operations and translated at
the closing rates at the end of the reporting period. For acquisitions prior to 1 January 2005, the
exchange rates at the dates of acquisition are used.
50 ADROIT INNOVATIONS LIMITED 09
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Operating segments are reported in a manner consistent with the internal reporting provided to
the executive directors who are responsible for allocating resources and assessing performance
of the operating segments.
Incremental costs directly attributable to the issuance of new ordinary shares are deducted
against the share capital account.
Assumptions concerning the future and judgements are made in the preparation of the financial
statements. They affect the application of the Group’s accounting policies, reported amounts of
assets, liabilities, income and expenses, and disclosure of contingent assets and liabilities. These
are assessed on an on-going basis and are based on experience and relevant factors, including
expectations of future events that are believed to be reasonable under the circumstances.
The key assumptions concerning the future and other key sources of estimation uncertainty
at the end of the reporting period that have a significant risk of causing a material
adjustment to the carrying amounts of assets and liabilities within the next financial year
are as follows:
Significant assumptions are required to estimate the stage of completion, the total contract
costs, as well as the recoverability of the contracts. In making these estimates, management
has relied on past experience and the work of specialists and has determined that the
outcome of a contract can be estimated reliably.
The Group has assessed impairment by taking into account the growth potential of the
associated company and the ability to generate income and higher returns for the Group. In
determining the initial valuation of the associated company, a Real Options Valuation model
was used. This requires the management to estimate the projected gas output production,
cost of exploration and production of the site, time to expiration of the concession, variance
in the price of natural gas and costs of delay in operating the concession. Where the
expectation is different from the original estimate, such difference will impact the carrying
amount of the associated company.
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51
The Group performs an annual review of the carrying value of goodwill and license rights,
against the recoverable amounts of the CGU to which the goodwill and license rights are
allocated. Recoverable amounts of CGU are determined based on the present value of
estimated future cash flows expected to arise from the respective CGU. Management
exercises judgement in estimating the future cash flows, growth rates and discount
rates used in computing the recoverable amounts of the CGU. The carrying amount of
goodwill and license rights as at 31 December 2009 was S$131,188 (2008: S$555,113) and
S$120,000 (2008: Nil), respectively. More details of the impairment testing of goodwill and
license rights are disclosed in Note 22 to the financial statements.
Property and equipment and investments in subsidiaries are tested for impairment whenever
there is any objective evidence or indication that these assets may be impaired.
The recoverable amount of these assets and where applicable, CGU, have been determined
based on value-in-use calculations. These calculations require the use of estimates. The
carrying amount of property and equipment and the Company's investments in subsidiaries
as at 31 December 2009 was S$3,279,235 (2008: S$3,036,229) and S$1,105,063 (2008:
S$104,499), respectively.
Employee Compensation
The present value of the employee compensation depends on a number of factors that are
determined on an actuarial basis using a number of assumptions. The assumptions used
include the discount rate, rate of future salary increase and rate of resignation. Any changes
in these assumptions will impact the carrying amount of employee compensation.
The Group determines the appropriate discount rate at the end of each year. This is the
interest rate that should be used to determine the present value of estimated future cash
outflows expected to be required to settle the employee compensation. The carrying amount
of employee compensation as at 31 December 2009 was S$379,085 (2008: S$270,705).
52 ADROIT INNOVATIONS LIMITED 09
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In the process of applying the Group’s accounting policies, management has made the
following judgements, apart from those involving estimations, which has the most significant
effect on the amounts recognised in the financial statements:
Impairment of Receivables
Management reviews its loans and receivables for objective evidence of impairment
at the end of each reporting period. Significant financial difficulties of the debtor, the
probability that the debtor will enter bankruptcy, and default or significant delay in
payments are considered objective evidence that a receivable is impaired. In determining
this, management makes judgement as to whether there is observable data indicating that
there has been a significant change in the payment ability of the debtor, or whether there
have been significant changes with adverse effect in the technological, market, economic
or legal environment in which the debtor operates.
Management has assessed a full impairment on its loan to associated company classified
as part of the investment holding segment, amounting to S$1,000,040 for the financial year
ended 31 December 2009 as the recoverable amount (i.e. value-in-use) is less than the
carrying value of the loan to associated company. A pre-tax discount rate of 3.06% was
applied in determining the recoverable amount.
The Group follows the guidance of FRS 39 in determining whether impairment of available-
for-sale investments is other than temporary, which requires significant judgement. The
Group evaluates, among other factors, the duration and extent to which the present value
of estimated future cash flows discounted at the current market rate of return is less than
its carrying amount; and the financial health and near-term business outlook of the investee,
including factors such as industry and sector performance, changes in technology and
operational and financial cash flow. Investment in financial assets, available-for-sale was
fully impaired during the financial year. The carrying amount of financial assets, available-
for-sale as at 31 December 2009 was Nil (2008: S$275,216).
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53
4 Revenue
Group
2009 2008
S$ S$
In accordance with Recommended Accounting Practice 1, Pre-completion Contracts for the Sales
of Development Property, the Group recognises revenue from construction contracts using the
percentage-of-completion method. Had the Group adopted the completed contract method, it
would have an increasing (decreasing) effect on the following:
Group
2009 2008
S$ S$
Group
2009 2008
S$ S$
6 Other Expenses
Group
2009 2008
S$ S$
No non-audit service fees have been paid to the auditors of the Company for the current financial
year (2008: Nil).
7 Employee Benefits
Group
2009 2008
S$ S$
8 Finance Expense
Group
2009 2008
S$ S$
Interest expense
– term loan 201,229 90,042
– share margin financing facility 45,016 117,864
– finance lease liabilities 21,304 3,652
– other 302 69,556
267,851 281,114
9 Income Taxes
Group
2009 2008
S$ S$
The tax expense on the profit/(loss) before income tax differs from the amount that would arise
using the Singapore standard rate of income tax as explained below:
Group
2009 2008
S$ S$
The corporate income tax rate applicable to Singapore was reduced to 17% for the year of
assessment 2010 onwards from 18% for year of assessment 2009.
56 ADROIT INNOVATIONS LIMITED 09
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Basic earnings/(loss) per share is calculated by dividing the net profit/(loss) attributable to
equity holders of the Company of S$9,216,781 (2008: loss of S$14,126,410) by the weighted
average number of ordinary shares outstanding during the financial year of 954,150,013 (2008:
874,345,491).
Diluted earnings/(loss) per share is the same as the basic earnings/(loss) per share as there were
no dilutive potential ordinary shares for both the financial years ended 31 December 2009 and
31 December 2008.
Group Company
2009 2008 2009 2008
S$ S$ S$ S$
For the purpose of presenting the consolidated statement of cash flows, the consolidated cash
and cash equivalents comprise the following:
Group
2009 2008
S$ S$
Bank deposits and balances of the Group were pledged to banks to secure bank facilities for
the Group [Notes 24(b) and (f)].
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57
Group
2009 2008
S$ S$
At fair value
Listed securities:
Equity securities – Singapore 23,246,000 8,917,780
Equity securities – Malaysia 586,481 2,409,965
23,832,481 11,327,745
At the end of the reporting period, financial assets, at fair value through profit or loss of the Group
amounting to S$2,244,481 (2008: S$2,163,040) have been pledged as security for borrowings of
a subsidiary [Note 24(a)].
Group Company
2009 2008 2009 2008
S$ S$ S$ S$
Trade receivables
– third parties 576,772 176,514 – 44,134
Less: Allowance for impairment
of receivables
– third parties – (47,546) – (44,134)
Trade receivables – net 576,772 128,968 – –
Group Company
2009 2008 2009 2008
S$ S$ S$ S$
14 Inventories
Group
2009 2008
S$ S$
At cost:
Raw materials 4,521 6,075
Finished goods 1,616 1,372
6,137 7,447
The cost of inventories recognised as an expense and included in “Raw materials and consumables
used” amounted to S$2,531 (2008: S$4,877).
15 Other Assets
Group Company
2009 2008 2009 2008
S$ S$ S$ S$
Current
Deposits 91,414 765,462 23,245 33,415
Prepayments 95,809 61,856 13,740 23,459
187,223 827,318 36,985 56,874
Non-current
Deposits 8,055 7,770 – –
Total other assets 195,278 835,088 36,985 56,874
16 Development Properties
Group
2009 2008
S$ S$
(a) The following interest was capitalised as cost of development properties for sale:
Group
2009 2008
S$ S$
(b) The weighted average capitalisation rate on funds borrowed is 8% per annum (2008: 8%
per annum).
(c) At the end of the reporting period, certain development properties amounting to S$382,054
(2008: S$387,091) were mortgaged to a bank to secure a credit facility of a subsidiary which
has yet to be utilised [Note 24(f)].
Tenure, Stage of
(unexpired Completion
terms) and and (Expected Effective
Description and Land Area Year of Interest in
Location Usage (square metre) Completion) Property Net Book Value
2009 2008
% S$ S$
Malaysia
H.S. (D) 181352, P.T. No. 948,
Section 13, Town of Shah Alam,
District of Petaling, Selangor
Malaysia
Kota Kinabalu Country
Lease No. 015400987,
Town of Menggatal,
District of Kota Kinabalu, Sabah
8,968,053 7,698,641
60 ADROIT INNOVATIONS LIMITED 09
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Company
2009 2008
S$ S$
Loans to subsidiaries are unsecured, interest-free and settlement is neither planned nor likely
to occur in the foreseeable future. As the amount is, in substance, a part of the Company’s net
investment in the equity of the subsidiary, it is stated at cost, less impairment, if any.
The Company has written back an impairment charge of S$999,998 on investment in subsidiary
and S$1,839,199 on receivables from subsidiaries during the financial year as the management
has determined that the recoverable amount (i.e. value-in-use or fair value less cost to sell) is
higher than the carrying value of investment in subsidiary and receivable from subsidiaries,
respectively.
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61
(b) The subsidiaries held by the Company and the sub-subsidiaries are listed below:
(b) The subsidiaries held by the Company and the sub-subsidiaries are listed below: (cont’d)
(a)
Audited by Moore Stephens LLP, Singapore.
(b)
In the process of striking off the Register under Section 308 (1) of the Malaysia Companies Act, 1965.
(c)
Audited by Moore Stephens AC, Malaysia, a member firm of Moore Stephens International Limited of which Moore
Stephens LLP is also a member.
(d)
Audited by Paul Hadiwinata, Hidajat, Arsono & Rekan, Indonesia.
(e)
Audited by Moore Stephens HT, Malaysia, a member firm of Moore Stephens International Limited of which Moore
Stephens LLP is also a member.
(f)
This subsidiary was disposed during the financial year.
On 11 November 2008, the Group entered into a conditional sale and purchase agreement with
an individual to purchase 1,150,000 ordinary shares, or the remaining 25% shareholding in the
capital of Trackplus Sdn Bhd for RM3,125,000. The consideration was satisfied by the issuance of
87,059,479 new ordinary shares in the Company on the basis of S$0.015 each, which amounted
to S$1,305,892.
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Consequently, Trackplus Sdn Bhd became a wholly-owned subsidiary of the Group. The
acquisition of additional interests in Trackplus Sdn Bhd resulted in negative goodwill on
acquisition of S$234,786 recognised in profit or loss of the Group, details of which as follows:
S$
Cost of investment:
Consideration paid by issuance of shares (Note 28) 1,305,892
Transaction cost: Stamp duty 3,976
1,309,868
The management has assessed that the identifiable assets and liabilities approximate the fair
value at the date of acquisition.
On 17 August 2009, the Company disposed of its entire interest in Hartamas Alpha Sdn. Bhd. for
cash consideration of S$1,635. The attributable net tangible liabilities of the subsidiary company
disposed of was S$4,401. The Company has recognised a gain from disposal of this subsidiary
amounting to S$6,036.
On 4 September 2009, Venturistic Holdings Pte. Ltd. increased its share capital to 1,000 shares
and issued 430 shares to minority shareholders. This transaction had no material impact in the
consolidated financial statements.
64 ADROIT INNOVATIONS LIMITED 09
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Group
2009 2008
S$ S$
Representing:
Balance at beginning of the year 270,358 4,297,249
Share of loss (270,358) (179,176)
Impairment losses – (3,897,848)
Currency translation differences – 50,133
Balance at end of the year – 270,358
Movement in the allowance for impairment losses on loan to associated company is as follow:
Group
2009 2008
S$ S$
(a) Equity cost of investment includes goodwill of S$3,897,848, which has been written off in
2008.
(b) The Group’s share of loss in its associate for the year was S$270,358 (2008: S$179,176).
The Group has not recognised losses relating to Grand Prosper Group Limited, totalling
S$282,132 in 2009, since the Group has no obligation in respect of these losses.
In 2009 and 2008, the Group did not receive dividends from its associate.
(c) The loan to the associated company forms part of the Group’s net investment in the
associate. The loan is unsecured and interest-free, and settlement is neither planned nor
likely to occur in the foreseeable future. As the amount is, in substance, a part of the
Group’s net investment in the entity, it is stated at cost, less impairment, if any.
(a)
Unaudited
Group
2009 2008
S$ S$
19 Investment Properties
Group
2009 2008
S$ S$
(a) Investment properties are carried at fair value at the end of the reporting period as
determined by independent professional valuers. Valuations are made based on the
properties’ highest-and-best use using valuation methods such as the Direct Market
Comparison Method.
(c) As at the end of the reporting period, the details of the investment properties are as
follows:
Tenure,
(unexpired
Description and Location Usage terms) Net Book Value
Years 2009 2008
S$ S$
(d) Investment properties are leased to non-related parties under operating leases.
Group
2009 2008
S$ S$
Group Company
2009 2008 2009 2008
S$ S$ S$ S$
The Group has recognised full impairment loss of S$405,715 (2008: Nil) against the unquoted
equity investments during the financial year.
68
Office,
Furniture computer
Freehold Freehold and and other Cobalt Motor
land building Renovations fittings equipment isotope vehicles Total
S$ S$ S$ S$ S$ S$ S$ S$
(a) Group
2009
ADROIT INNOVATIONS LIMITED
Cost
At 1 January 2009 1,118,125 637,686 78,940 13,743 894,991 1,096,010 532,429 4,371,924
annual report
Currency translation
09
Accumulated depreciation
At 1 January 2009 – 147,529 23,208 13,205 572,437 468,637 110,679 1,335,695
Currency translation differences – 22,352 (23) (3) 57,949 71,365 13,366 165,006
Depreciation during the year – 35,116 29,129 691 97,661 117,689 82,544 362,830
Disposals – – (16,000) – – – (24,191) (40,191)
At 31 December 2009 – 204,997 36,314 13,893 728,047 657,691 182,398 1,823,340
NOTES TO THE FINANCIAL STATEMENTS
Office,
Furniture computer
Freehold Freehold and and other Cobalt Motor
land building Renovations fittings equipment isotope vehicles Total
S$ S$ S$ S$ S$ S$ S$ S$
Accumulated depreciation
At 1 January 2008 – 135,271 7,429 13,066 533,773 419,332 111,475 1,220,346
Currency translation differences – (22,840) (30) (4) (58,931) (72,009) (14,476) (168,290)
Depreciation during the year – 35,098 15,809 143 97,595 121,314 62,365 332,324
Disposals – – – – – – (48,685) (48,685)
At 31 December 2008 – 147,529 23,208 13,205 572,437 468,637 110,679 1,335,695
Office,
Furniture computer
and and other Motor
Renovations fittings equipment vehicle Total
S$ S$ S$ S$ S$
(b) Company
2009
Cost
At 1 January 2009 73,228 13,041 195,161 236,900 518,330
Additions 11,684 – – – 11,684
Disposals (16,000) – – – (16,000)
At 31 December 2009 68,912 13,041 195,161 236,900 514,014
Accumulated depreciation
At 1 January 2009 21,875 13,041 189,446 8,461 232,823
Depreciation during the year 24,009 – 2,710 33,842 60,561
Disposals (16,000) – – – (16,000)
At 31 December 2009 29,884 13,041 192,156 42,303 277,384
2008
Cost
At 1 January 2008 73,228 13,041 191,962 194,112 472,343
Additions – – 3,199 236,900 240,099
Disposals – – – (194,112) (194,112)
At 31 December 2008 73,228 13,041 195,161 236,900 518,330
Accumulated depreciation
At 1 January 2008 7,229 13,041 186,948 27,730 234,948
Depreciation during the year 14,646 – 2,498 29,259 46,403
Disposals – – – (48,528) (48,528)
At 31 December 2008 21,875 13,041 189,446 8,461 232,823
(c) Included in additions in the consolidated financial statements are motor vehicles acquired under
finances leases amounting to S$89,111 (2008: S$250,320).
At Group, the carrying amount of motor vehicles held under finance leases at 31 December 2009
amounted to S$432,198 (2008: S$351,988).
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71
22 Intangible Assets
Group
2009 2008
S$ S$
Composition:
Goodwill arising on consolidation (a) 131,188 555,113
License rights (b) 120,000 –
251,188 555,113
Cost
Balance at beginning of the year 1,442,529 1,467,130
Currency translation differences 26,232 (24,601)
Balance at end of the year 1,468,761 1,442,529
Property
development Sterilisation
2009 2008 2009 2008
S$ S$ S$ S$
Indonesia – – – –
Malaysia 131,188 555,113 – –
131,188 555,113 – –
The goodwill allocated to the sterilisation business segment was fully impaired in 2006.
The recoverable amount of the CGU was determined based on either value-in-use
calculations or on a valuation performed on the fair value of the business.
72 ADROIT INNOVATIONS LIMITED 09
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The key assumptions for the value-in-use calculations, as approved by the management, are
those regarding the discount rates, growth rates and cash flow projections from financial
budgets expected to be generated from the sale of development properties covering
a two-year period. A pre-tax discount rate that reflects current market assessments of
the risks specific to the CGU of 5.5% (2008: 6.5%) and growth rate based on expected
units to be sold on development properties were applied in determining the recoverable
amount. Gross margin is based on average values expected to be achieved for the entire
development of the properties.
For valuation performed on the fair value, the recoverable amount is determined based on
a valuation performed by independent professionals.
Impairment loss on goodwill of S$450,157 (2008: Nil) was included in other expenses in
the statement of comprehensive income.
Group
2009 2008
S$ S$
Cost
Balance at beginning of the year – –
Additions 120,000 –
Balance at end of the year 120,000 –
In September 2009, the Company acquired the license rights of Insight Academy of Higher
Learning (formerly known as “Wesley Business School”) from a third party.
The recoverable amount of the educational business has been determined based on a
value-in-use calculation using cash flow projections based on financial budgets covering
a five-year period.
The pre-tax discount rate applied to the cash flow projection is 15% and reflects specific
risks relating to the business segment and cash flow beyond the one-year period. The
growth rates used are 3% for cash flow projections beyond a five-year period.
ADROIT INNOVATIONS LIMITED 09
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73
Group Company
2009 2008 2009 2008
S$ S$ S$ S$
Current
Trade payables – third parties 1,153,398 388,250 16,152 16,575
Course fees received in advance 15,957 – – –
Other payables (a) 864,321 810,590 3,053 11,815
Accrued operating expenses 308,188 349,041 169,200 235,677
Amount due to a director (b) 599,351 774,230 356,586 597,000
Advances from customers 35,922 35,390 – –
2,977,137 2,357,501 544,991 861,067
Non-current
Loan from minority shareholders
of a subsidiary (c) 257,310 – – –
(a) In 2008, other payables included a deposit from a third party which amounted to S$640,000
for the sale and purchase agreement of certain financial assets, at fair value through profit
or loss which was due on 30 June 2009.
On 23 November 2009, a termination agreement was signed to terminate the sale and
purchase agreement and the deposit will be converted into financial assets, at fair value
through profit or loss. The transfer of financial assets, at fair value through profit or loss
has been completed on 11 February 2010.
(c) The loan from minority shareholders of a subsidiary is unsecured, interest-free and
repayable within two years from September 2009. As at 31 December 2009, the fair value
of non-current loan from minority shareholders of a subsidiary is S$234,322 discounted at
market borrowings rates of 5.5% which approximates the carrying value.
74 ADROIT INNOVATIONS LIMITED 09
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24 Borrowings
Group Company
2009 2008 2009 2008
S$ S$ S$ S$
Current
Share margin financing facility (a) 945,960 1,223,335 – –
Term loan (b) 231,314 189,227 – –
Term loan (c) 140,060 – – –
Finance lease liabilities (Note 25) (d) 82,491 52,230 24,456 25,400
1,399,825 1,464,792 24,456 25,400
Non-current
Term loan (b) 3,576,566 3,881,478 – –
Term loan (c) 501,882 – – –
Finance lease liabilities (Note 25) (d) 176,240 170,232 75,318 97,367
4,254,688 4,051,710 75,318 97,367
(a) The share margin financing facility is secured by financial assets, at fair value through profit
or loss with a carrying amount of S$2,244,481 (2008: S$2,163,040) (Note 12). Interest is
charged on a fixed rate basis of 8% per annum and on a floating rate basis of 6% per
annum.
(b) The term loan is secured by a corporate guarantee from the Company, first legal charge
on one of the Group’s investment properties with a carrying amount of S$5,734,400 (2008:
S$5,810,000) [Note 19(b)], deed of assignment of the rental proceeds from the said property
and all monies standing to the credit of the Group’s receiving operating account in respect
of the investment property maintained by the Group with the bank (Note 11).
The term loan shall be repaid in full by 2022. The interest is payable on a monthly basis
and at a rate ranging from 3.5% to 6.00%.
(c) The term loan is secured on a subsidiary’s investment property with a carrying amount of
S$1,875,612 (2008: Nil) [Note 19(b)]. Interest is charged on a floating rate basis of 11.5%
per annum.
(d) Finance lease liabilities of the Group are effectively secured over the leased motor vehicles
[Note 21(c)], as the legal title is retained by the lessor and will be transferred to the Group
upon full settlement of the finance lease liabilities. The weighted average effective interest
rates of finance lease liabilities is ranges from 4.33% – 18.75% (2008: 4.33% – 17.08%)
per annum.
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75
24 Borrowings (cont’d)
Group Company
2009 2008 2009 2008
S$ S$ S$ S$
The fair values above are determined from the cash flow analyses, discounted at market
borrowing rates of an equivalent instrument at the statement of financial position date which
the directors expect to be available to the Group as follows:
Group Company
2009 2008 2009 2008
% % % %
The Group has an undrawn borrowing credit facility of S$146,579 (2008: S$145,250).
The undrawn borrowing facility is secured on bank deposits of S$134,139 and certain
development properties with a carrying amount of S$382,054 (2008: S$387,091) [Note
16(c)] with expiry dates of not later than one year.
Group Company
2009 2008 2009 2008
S$ S$ S$ S$
Group Company
2009 2008 2009 2008
S$ S$ S$ S$
Not later than one year (Note 24) 82,491 52,230 24,456 25,400
Later than one year but not later
than five years (Note 24) 176,240 170,232 75,318 97,367
258,731 222,462 99,774 122,767
26 Employee Compensation
Group
2009 2008
S$ S$
Group
2009 2008
S$ S$
Group
2009 2008
S$ S$
Group
2009 and 2008
Historical information:
Group
31.12.2009 31.12.2008 31.12.2007 31.12.2006 31.12.2005
S$ S$ S$ S$ S$
Present value of
unfunded obligations 426,429 252,536 265,799 251,773 223,957
78 ADROIT INNOVATIONS LIMITED 09
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Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off
current income tax assets against current income tax liabilities and when the deferred income
taxes relate to the same fiscal authority. The amounts, determined after appropriate offsetting,
are shown in the consolidated statement of financial position as follows:
Group
2009 2008
S$ S$
Group
2009 2008
S$ S$
The Group had the following unrecognised tax losses which can be carried forward and used to
offset against future taxable income subject to meeting certain statutory requirements by those
companies with unrecognised tax losses in their respective countries of incorporation:
Group Company
2009 2008 2009 2008
S$ S$ S$ S$
These tax losses have no expiry date except for the following:
Group
2009 2008
S$ S$
Expiry date
– Year 2009 – 463,007
– Year 2010 – 104,476
– Year 2011 – 227,451
– Year 2012 180,902 379,411
180,902 1,174,345
The movements in the deferred tax assets and liabilities (prior to offsetting of balances within the
same tax jurisdiction) during the financial year is as follows:
Accelerated Fair
tax value
depreciation gains Total
S$ S$ S$
Group
2009
Balance at beginning of the year 118,870 – 118,870
Effect of change in tax rate credited to profit or loss (28,492) – (28,492)
Currency translation differences 13,647 – 13,647
Charged to profit or loss 85,758 733,037 818,795
Balance at end of the year 189,783 733,037 922,820
2008
Balance at beginning of the year 174,362 – 174,362
Currency translation differences (21,821) – (21,821)
Credited to profit or loss (33,671) – (33,671)
Balance at end of the year 118,870 – 118,870
80 ADROIT INNOVATIONS LIMITED 09
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Group
2009
Balance at beginning of the year (81,062) – – (81,062)
Effect of change in tax rate charged
to profit or loss 5,802 – – 5,802
Currency translation differences (11,882) – 40 (11,842)
Credited to profit or loss (18,347) – (7,740) (26,087)
Balance at end of the year (105,489) – (7,700) (113,189)
2008
Balance at beginning of the year (79,345) (75,821) – (155,166)
Currency translation differences 12,812 3,964 – 16,776
(Credited)/Charged to profit or loss (14,529) 71,857 – 57,328
Balance at end of the year (81,062) – – (81,062)
28 Share Capital
On 11 November 2008, the Company announced that it had entered into a conditional sale and
purchase agreement with an individual to purchase an aggregate of 1,150,000 ordinary shares
of RM1 each or 25% shareholdings in the capital of Trackplus Sdn Bhd. The consideration was
satisfied by the issue of 87,059,479 new ordinary shares in the Company in November 2008 at
the fair value of S$1,305,892. The newly issued shares rank pari passu in all respects with the
previously issued shares.
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81
At 31 December 2009, on a cumulative basis, the Group has utilised the proceeds from the rights
issue in 2007 of approximately S$5.4 million (2008: S$5.4 million) for advances to and an interest
in an associated company. In addition, on a cumulative basis, the Group’s working capital and
advances to subsidiaries for business expansion amounted to S$5.0 million (2008: S$3.6 million).
Pending for deployment for specific use of the net proceeds, the net proceeds were invested in
quoted financial assets in 2009 and 2008.
Share Options
At an Extraordinary Meeting held on 16 May 2000, the members of the Company approved the
Share Option Scheme II (“ESOS II”).
Under the ESOS II, the Compensation Committee may grant to executives of the Group and
non-executive directors of the Company options to subscribe for unissued ordinary shares in the
Company. Executive and non-executive directors who are controlling shareholders and associates
of such controlling shareholders are not eligible to participate in the ESOS II.
The Compensation Committee may grant options at a price equivalent to the then prevailing
market price of the shares or at a discount of up to twenty per cent of the market price. Where
the options are granted at the then prevailing market price, the options may be exercised not
earlier than the first anniversary of the date on which the option is offered. Where the options
are granted at a discount to the then prevailing market price, the options may be exercised not
earlier than the second anniversary of the date on which the option is offered.
Particulars of the ESOS II and the options granted in 2001 under the ESOS II (“ESOS II Options
2001”) were set out in the Directors’ Report for the financial year ended 30 June 2001.
Particulars of the ESOS II and the options granted in 2002 under the ESOS II (“ESOS II Options
2002”) were set out in the Directors’ Report for the financial year ended 30 June 2002.
The share options granted by the Compensation Committee pursuant to the ESOS II to executives
of the Group were forfeited as the executives left the Group before the options were vested.
The options under ESOS II Options 2001 and 2002 have not been recognised in accordance with
FRS 102 Share-Based Payment as the options were granted on or before 7 November 2002. The
option have not been subsequently modified.
No further options will be granted under the ESOS II after 15 May 2010, provided always it may
be extended for any further period or periods thereafter with the approval of shareholders at a
general meeting of the Company and any relevant approvals which may then be required.
82 ADROIT INNOVATIONS LIMITED 09
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Capital Management
• to safeguard the entity’s ability to continue as a going concern, so that it can continue to
provide returns for shareholders and benefits for other stakeholders; and
The capital structure of the Group consists of equity attributable to equity holders of the Company,
comprising share capital, reserves, accumulated losses and net debts, which includes borrowings
net of cash and cash equivalents.
The Group sets the amount of capital in proportion to risk. The Group manages the capital
structure and makes adjustments to it in the light of changes in economic conditions and the risk
characteristics of the underlying assets. In order to maintain or adjust the capital structure, the
Group may adjust the amount of dividends paid to shareholders, return capital to shareholders,
issue new shares, or sell assets to reduce debts.
Consistently, the Group monitors capital on the basis of the debt-to-adjusted capital ratio. This
ratio is calculated as net debt ÷ adjusted capital. Net debt is calculated as total debt (as shown in
the statements of financial position) less cash and cash equivalents. Adjusted capital comprises
all components of equity (i.e. share capital and retained earnings/accumulated losses) other
than amounts recognised in equity relating to cash flow hedges, and includes some forms of
subordinated debt, if any.
Group Company
2009 2008 2009 2008
S$ S$ S$ S$
29 Reserves
Group Company
2009 2008 2009 2008
S$ S$ S$ S$
(a) foreign exchange differences arising from the translation of the financial statements of
foreign operations whose functional currencies are different from the functional currency
of the Company;
(b) the exchange differences on monetary items which forms part of the Group’s net investment
in foreign operations, provided certain conditions are met.
The fair value reserve includes the cumulative net change in the fair value of available-for-sale
investments held until the investments are derecognised or impaired.
30 Commitments
The Group leases an office and certain office equipment from non-related parties under
non-cancellable operating lease agreements. The lease expenditure charged to profit or
loss during the financial year is disclosed in Note 6.
The future aggregate minimum lease payable under non-cancellable operating leases
contracted for at the end of the reporting date but not recognised as liabilities, are analysed
as follows:
Group Company
2009 2008 2009 2008
S$ S$ S$ S$
30 Commitments (cont’d)
The Group leases out its investment property to non-related parties under non-cancellable
operating leases.
The future minimum lease receivable under non-cancellable operating leases contracted
for at the end of the reporting period but not recognised as receivables, are analysed as
follows:
Group
2009 2008
S$ S$
(d) Others
The Group’s activities expose it to market risk (including currency risk, interest rate risk and
price risk), credit risk and liquidity risk arising in the normal course of the Group’s business. The
Group’s overall risk management strategy seeks to minimise potential adverse effects from the
unpredictability of financial markets on the Group’s financial performance.
The Audit Committee 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. Risk management is carried out by the
Group’s executive management.
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85
The Group operates mainly in Asia and is subject to various currency exposures,
primarily with respect to the Malaysian Ringgit and Indonesian Rupiah. Currency
risk arises from recognised assets and liabilities and net investments in foreign
operations.
The Group has certain investments in foreign operations, whose net assets are
exposed to currency translation risk. Currency exposures to the net assets of the
Group’s foreign operations in Malaysia and Indonesia are kept at a minimal level.
The Group does not presently hedge this foreign exchange exposure. The Group
monitors exposure of foreign currency risk on an ongoing basis by reviewing the liquid
assets and liabilities held in currencies other than the Singapore dollar to ensure that
the net exposure within acceptable parameters.
Group Company
Profit or loss Equity Profit or loss Equity
S$ S$ S$ S$
31 December 2009
Indonesian Rupiah (4,002) – – –
Malaysian Ringgit 38,568 – – –
United States Dollar 5,861 – – –
31 December 2008
Indonesian Rupiah (4,222) – – –
Malaysian Ringgit 32,196 – – –
United States Dollar (2,844) – – –
Sterling Pound – 2,752 – 2,752
A 1% weakening of the Singapore Dollar against the above currencies would have
had the equal but opposite effect on the above currencies to the amounts shown
above, on the basis that all other variables remain constant.
86
2009 2008
United United
ADROIT INNOVATIONS LIMITED
S$ S$ S$ S$ S$ S$ S$
09
Group
For the financial year ended 31 December 2009
Company
Trade and other receivables – – – – – – –
Cash and cash equivalents – – – – – – –
Other financial assets – – – – – – 275,216
NOTES TO THE FINANCIAL STATEMENTS
The Group is exposed to equity securities price risk because of the investments
held by the Group, which are classified on the consolidated statement of financial
position at fair value through profit or loss. These securities are listed in Singapore
and Malaysia. The market value of these investments are affected, amongst others, by
changes in market prices as a result of changes in global economic conditions, macro
and micro economic factors affecting the country, where investments are quoted, and
factors specific to investee corporations. The fluctuations in market prices due to the
above factors are unforeseen and the Group monitors these changes to respond to
them as and when appropriate and necessary.
A 1% increase in the underlying equity prices at the end of the reporting period with
all other variable including tax rate being held constant would increase profit in 2009
and decrease loss in 2008 by the following amount:
Group
2009 2008
S$ S$
Cash flow interest rate risk is the risk that the future cash flows of a financial
instrument will fluctuate because of changes in market interest rates. Fair value
interest rate risk is the risk that the fair value of a financial instrument will fluctuate
due to changes in market interest rates. As the Group has no significant interest-
bearing assets, the Group’s income and operating cash flows are substantially
independent of changes in market interest rates.
The Group’s exposure to cash flow interest rate risk arises primarily from non-current
variable-rate borrowings. The Group does not apply any hedge accounting as the
interest-bearing liabilities were not significant. In addition, the Group also monitors
the exposure of interest rate risk on an ongoing basis by reviewing the interest-
bearing liabilities and to maintain cash equivalents in liquidity position.
The Group’s borrowings at variable rates are denominated in Malaysian Ringgit. If the
Malaysian Ringgit interest rates increase (decrease) by 1% (2008: 1%) with all other
variables including tax rate being held constant, the profit or loss will (decrease)/
increase by S$21,709 (2008: S$24,392) and S$21,464 (2008: S$24,175) as a result
of higher/lower interest expense on these borrowings.
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Credit risk refers to the risk that a counterparty will default on its contractual obligations
resulting in financial loss to the Group, and arises principally from the Group’s receivables
from customers, bank deposits and investment securities. The Group has a credit policy
in place and monitors credit evaluation and exposure to credit risk on an ongoing basis. In
addition, collections and credit limits of customers are monitored by the Group.
The Group established an allowance for impairment that represents its estimate of incurred
losses in respect of trade and other receivables based on expected collectibility of all
receivables.
The allowance account in respect of loans to associated company and trade and other
receivables is used to record impairment loss 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. The amount of allowance for impairment of loan to
associated company and receivables as at 31 December 2009 amounted to S$1,000,040
(2008: Nil) and S$3,360 (2008: S$47,546) [Notes 18 and 13], respectively.
Concentrations of credit risk with respect to trade receivables are limited due to the Group’s
large number of customers, covering a large spectrum of industries and having a variety
of end markets in which they sell. Due to these factors, management believes that there is
no anticipated additional credit risk beyond the amount of allowance for impairment made
in the Group’s trade receivables.
As the Group and Company does not hold any collateral, the maximum exposure to credit
risk for each class of financial instruments is the carrying amount of that class of financial
instruments presented on the statement of financial position, except as follows:
Company
2009 2008
S$ S$
Investments and bank deposits are placed with banks and financial institutions which are
regulated. Given these high credit ratings, management does not expect any counterparty
to fail to meet its obligations.
As at 31 December 2009 and 2008, the Group has no past due but not impaired financial
assets.
The rollforward analysis of the Group’s impaired financial assets is disclosed in Notes 13
and 18 to the financial statements.
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89
The Group monitors its liquidity risk and maintains a level of cash and cash equivalents and
marketable securities 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 90
days; this excludes the potential impact of extreme circumstances that cannot reasonably
be predicted, such as natural disasters.
The table below summarises the maturity profile of the Group’s and the Company’s
financial liabilities at the end of the reporting period based on contractual undiscounted
payments.
Group
31 December 2009
Trade and other payables 3,234,447 3,234,447 2,977,137 257,310 – 3,234,447
Borrowings 5,654,513 6,966,718 1,399,825 2,515,171 3,051,722 6,966,718
8,888,960 10,201,165 4,376,962 2,772,481 3,051,722 10,201,165
31 December 2008
Trade and other payables 2,357,501 2,357,501 2,357,501 – – 2,357,501
Borrowings 5,516,502 7,581,945 1,464,792 2,131,430 3,985,723 7,581,945
7,874,003 9,939,446 3,822,293 2,131,430 3,985,723 9,939,446
Company
31 December 2009
Trade and other payables 544,991 544,991 544,991 – – 544,991
Borrowings 99,774 104,627 24,456 80,171 – 104,627
644,765 649,618 569,447 80,171 – 649,618
31 December 2008
Trade and other payables 861,067 861,067 861,067 – – 861,067
Borrowings 122,767 133,866 25,400 108,466 – 133,866
983,834 994,933 886,467 108,466 – 994,933
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The table below shows the contractual expiry by maturity of the Group’s and the Company’s
contingent liabilities and commitments. The maximum amount of the financial guarantee
contracts are allocated to the earliest period in which the guarantee could be called.
31 December 2008
Financial guarantee contracts 189,227 805,184 3,076,294 4,070,705
Effective 1 January 2009, the Group adopted the amendment to FRS 107 which requires
disclosure of fair value measurements by level of the fair value measurement hierarchy:
The following table presents the assets and liabilities measured at fair value at 31 December
2009.
Group
Financial assets at fair value
through profit or loss
– Trading securities 23,832,481 – – 23,832,481
The fair value of financial instrument traded in active markets (such as trading securities)
is based on quoted market prices at the end of the reporting period. The quoted market
price used for financial assets held by the Group is the current bid price. This instrument
is included in Level 1.
The following summarises the significant methods and assumption used in estimating fair
values of financial instruments of the Group and Company.
The fair value of financial assets, at fair value through profit or loss is determined by
reference to their quoted bid prices at the end of the reporting period.
The carrying amounts of bank borrowings and finance leases approximate fair value
as they bear interest at rates which approximate the current incremental borrowing
rate for similar types of lending and borrowing arrangements.
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.
The following transactions took place between the Group and related parties during the financial
year.
The remuneration of directors, who are the key management personnel of the Group, is
as follows:
Group
2009 2008
S$ S$
The following information relates to the remuneration of directors of the Company during
the financial year:
Company
2009 2008
33 Operating Segments
Management has determined four reportable segments, which are the Group’s strategic business
units. The strategic business units offer different products and services, and are managed
separately because they require different technology and marketing strategies. For each of the
strategic business units, the Company’s Executive Directors review internal management reports
on at least a quarterly basis. The following summary describes the operations in each of the
Group’s reportable segments:
• Property – development of properties for sale and long-term holding of properties for rental
and related income.
Information regarding the results of each reportable segment is included below. Performance is
measured based on segment profit/(loss) before income tax, as included in the internal report
that are reviewed by the Company’s Executive Directors. Segment profit is used to measure
performance as management believes that such information is the most relevant in evaluating
the results of certain segments.
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Investment
holding Sterilisation Property Education Group
S$ S$ S$ S$ S$
Additions to:
– property and equipment 11,684 164,929 – 85,135 261,748
– intangible asset – – – 120,000 120,000
– investment properties – – 111,218 – 111,218
Investment
holding Sterilisation Property Group
S$ S$ S$ S$
Additions to:
– property and equipment 240,099 101,623 80,329 422,051
– investment properties – – 6,045,693 6,045,693
Geographical Segments
The Group’s four business segments operate in three main geographical areas:
• Singapore – the Company is headquartered and has operations in Singapore. The operations
in this area are principally investment holding.
• Malaysia – the operations in this area are principally property development and
investment.
• Indonesia – the operations in this area are principally the sterilisation and polymerisation
services provider and property investment.
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In presenting information on the basis on the geographical location of customers, segment assets
are based on the geographical location of the assets.
Geographical information
External Non-current
revenues assets
S$ S$
2009
Singapore – 437,227
Malaysia 1,295,017 195,731
Indonesia 1,594,550 2,905,520
2,889,567 3,538,478
2008
Singapore – 560,723
Malaysia 236,568 634,302
Indonesia 1,372,740 2,679,303
Others – 1,270,398
1,609,308 5,144,726
Revenues of approximately S$0.16 million (2008: S$0.30 million) are derived from two major
customers. These revenues are attributable to the sterilisation services of the Group.
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Certain new standards, amendments and interpretations to existing standards have been
published and are mandatory for the Group’s accounting periods beginning on or after 1 January
2010 or later periods and which the Group has not early adopted. The Group’s assessment of
the impact of adopting those standards, amendments and interpretations that are relevant to the
Group is set out below:
The revised FRS 24 simplifies the definition of a related party and provides partial exemption
for government-related entities. The revised FRS 24 applies retrospectively for annual
periods beginning on or after 1 January 2011 but earlier application is permitted. The Group
is in the process of assessing the impact on the financial statements.
(b) FRS 27 (revised) Consolidated and Separate Financial Statements (effective for annual
periods beginning on or after 1 July 2009)
FRS 27 (revised) required the effects of all transactions with non-controlling interests to
be recorded in equity if there is no change in control and these transactions will no longer
result in goodwill or gains and losses. The standard also specifies the accounting when
control is lost. Any remaining interest in the entity is re-measured to fair value, and a gain
or loss is recognised in profit or loss. The Group will apply FRS 27 (revised) prospectively
to transaction with minority interests from 1 January 2010.
(c) FRS 103 (revised) Business Combinations (effective for annual periods beginning on or after
1 July 2009)
FRS 103 (revised) continues to apply the acquisition method to business combinations,
with some significant changes. For example, all payments to purchase a business are
to be recorded at fair value at the acquisition date, with contingent payment classified
as debt subsequently re-measured through profit or loss. There is a choice on an
acquisition-by-acquisition basis to measure the non-controlling interest in the acquiree
either at fair value or at the non-controlling interest’s proportionate share of the acquiree’s
net assets. All acquisition-related costs should be expensed. The Group will apply FRS 103
(revised) prospectively to all business combinations from 1 January 2010.
35 Subsequent Event
On 4 March 2010, the Group through Venturistic Holdings Pte. Ltd., incorporated a wholly
owned subsidiary in Singapore known as Insight Academy of Higher Learning Pte. Ltd. which
is a commercial school (including correspondence school) to provide enrichment classes, for a
cash consideration of S$2.
These financial statements were authorised for issue in accordance with a resolution of the Board
of Directors of Adroit Innovations Limited on 24 March 2010.
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Shareholding Statistics
As at 11 March 2010
Substantial Shareholders
No of Shares
Direct Deemed
Name of Shareholders Interest Interest Percentage
(1)
50,000,000 shares, 5,000,000 shares and 43,995,176 shares were held through DMG & Partners Securities Pte Ltd, Lim
& Tan Securities Pte Ltd and other nominees respectively.
(2)
33,300,000 shares and 24,000,000 shares were held through Mayban Nominees (Singapore) Pte Ltd and United Overseas
Bank Nominees Pte Ltd respectively.
(3)
81,992,000 shares were held through DBS Nominees Pte Ltd.
Public Float
Based on information available to the Company as at 11 March 2010, approximately 63.07% of the
issued ordinary shares of the Company is held by the public and, therefore, Rule 723 of the Listing
Manual issued by the Singapore Exchange Securities Trading Limited is complied with.
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Shareholding Statistics
As at 11 March 2010
No. of
S/No. Name Shares Percentage
625,578,370 65.54%
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AS ORDINARY BUSINESS
1. To receive and adopt the Audited Accounts for the financial year ended 31 (Resolution 1)
December 2009 together with the Directors’ Report and the Auditor’s Report
thereon.
2. To approve Directors’ fees of S$65,000.00 for the financial year ended 31 (Resolution 2)
December 2009.
3. To re-elect Mr Richard Chan Sing En who is retiring in accordance with Article (Resolution 3)
110 of the Company’s Articles of Association.
4. To re-elect Mr James Hong Gee Ho who is retiring in accordance with Article (Resolution 4)
110 of the Company’s Articles of Association.
5. To re-appoint Messrs Moore Stephens LLP as Auditors and to authorise the (Resolution 5)
Directors to fix their remuneration.
AS SPECIAL BUSINESS
To consider and, if thought fit, to pass the following as Ordinary Resolutions, with
or without modifications:–
“That, pursuant to Section 161 of the Companies Act, Chapter 50, and the
listing rules of the SGX-ST, approval be and is hereby given to the Directors of
the Company at any time to such persons and upon such terms and for such
purposes as the Directors may in their absolute discretion deem fit, to:
(i) issue shares in the capital of the Company whether by way of rights, bonus
or otherwise;
(ii) make or grant offers, agreements or options that might or would require
shares to be issued or other transferable rights to subscribe for or purchase
shares (collectively, “Instruments”) including but not limited to the creation
and issue of warrants, debentures or other instruments convertible into
shares;
(iii) issue additional Instruments arising from adjustments made to the number of
Instruments previously issued in the event of rights, bonus or capitalisation
issues; and
(ii) new shares arising from exercising share options or vesting of share
awards outstanding or subsisting at the time this resolution is passed
provided the options or awards were granted in compliance with Part
VIII of Chapter 8 of the Listing Manual of the SGX-ST, and
(b) The fifty per cent (50%) limit in (a) above may be increased to hundred per
cent (100%) for the Company to undertake pro-rata renounceable rights
issues.
and such authority shall, unless revoked or varied by the Company at a general
meeting, continue in force until the conclusion of the next Annual General
Meeting or the date by which the next Annual General Meeting of the Company
is required by law to be held, or in relation to sub-paragraph (b) above, 31
December 2010 or such other deadline as may be extended by the SGX-ST
whichever is the earlier.”
7. Authority to issue shares (other than on a pro-rata basis) with a maximum (Resolution 7)
discount of twenty per cent (20%)
“That subject to and pursuant to the share issue mandate in the Resolution 6
above being obtained, authority be and is hereby given to the Directors to issue
new shares other than on a pro-rata basis to shareholders of the Company at
an issue price per new share which shall be determined by the Directors in their
absolute discretion provided that such price shall not represent more than a
twenty per cent (20%) discount for new shares to the weighted average price per
share determined in accordance with the requirements of the SGX-ST and such
authority shall, unless revoked or varied by the Company at a general meeting,
continue in force until the conclusion of the next Annual General Meeting or the
date by which the next Annual General Meeting of the Company is required by
law to be held, or 31 December 2010 or such other deadline as may be extended
by the SGX-ST whichever is the earlier.”
8. Authority to grant options and issue shares under Adroit Innovations Limited (Resolution 8)
Share Option Scheme II (“the Scheme”)
“That pursuant to Section 161 of the Companies Act, Cap. 50, approval be and
is hereby given to the Directors of the Company to allot and issue from time
to time such number of shares in the capital of the Company pursuant to the
exercise of options granted in accordance with the provisions of the Scheme,
and, pursuant to the Scheme, to offer and grant options from time to time until
15 May 2010 in accordance with the provisions of the Scheme, provided always
that the aggregate number of the Scheme Shares shall not exceed fifteen (15)
per cent of the total number of issued shares excluding treasury shares of the
Company from time to time.”
Singapore,
8 April 2010
(i) Ordinary Resolution 6 is to empower the Directors, from the date of the passing of Ordinary
Resolution 6 to the date of the next Annual General Meeting, to issue Shares in the capital of the
Company and to make or grant instruments (such as warrants or debentures) convertible into
Shares, and to issue Shares in pursuance of such instruments, up to an amount not exceeding in
total 50% of the issued Shares (excluding treasury shares) in the capital of the Company, with a
sub-limit of 20% of the issued Shares (excluding treasury shares) for issues other than on a pro
rata basis to shareholders. The foregoing is subject to the exception that where the Company
undertakes a renounceable pro rata issue of Shares (including Shares to be issued pursuant to
such instruments), the maximum number of such Shares that can be issued is 100% of the issued
Shares (excluding treasury shares) in the capital of the Company.
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(ii) Ordinary Resolution 7 is to empower the Directors, pursuant to the general mandate to issue Shares
set out in Ordinary Resolution 6, to issue Shares other than on a pro rata basis to shareholders of
the Company, at a discount to the weighted average price of the Shares on the SGX-ST for the
full market day on which the placement or subscription agreement is signed (or if not available,
the weighted average price based on the trades done on the preceding market day), exceeding
10% but not more than 20%.
In exercising the authority conferred by Ordinary Resolution 7, the Company shall comply with the
requirements of the SGX-ST (unless waived by the SGX-ST), all applicable legal requirements and
the Company’s Articles of Association. Rule 811(1) of the SGX-ST Listing Manual presently provides
that an issue of shares must not be priced at more than 10% discount to the weighted average
price for trades done on the SGX-ST for the full market day on which the placement or subscription
agreement is signed (or if not available, the weighted average price based on the trades done
on the preceding market day). The Press Release also included a new measure allowing issuers
to undertake placements of new shares using the general mandate to issue shares, priced at
discounts of up to 20%, subject to the conditions that the issuer seeks shareholders’ approval
in a separate resolution at a general meeting to issue new shares on a non pro-rata basis at a
discount exceeding 10% but not more than 20%, and the general share issue mandate resolution
is not conditional on this resolution. Ordinary Resolution 7 has been included following this new
measure. The Press Release states that this new measure will also be in effect until 31 December
2010 when it will be reviewed by the SGX-ST.
(iii) Ordinary Resolution 8 is to empower the Directors to offer and grant options under the Scheme
until 15 May 2010, the expiration date of the Scheme, and to allot and issue shares in the Company
pursuant to the exercise of options granted under the Scheme not exceeding fifteen per centum
(15%) of the total number of issued shares excluding treasury shares of the Company from time
to time.
Notes:
(1) A member of the Company entitled to attend and vote at the Meeting is entitled to appoint a proxy
to vote in his stead.
(2) A proxy need not be a member of the Company.
(3) If the appointor is a corporation, the proxy must be executed under seal or the hand of its duly
authorised officer or attorney.
(4) The instrument appointing a proxy must be deposited at the registered office of the Company at
3 Phillip Street, #09-03 Commerce Point, Singapore 048693 not later than 48 hours before the
time appointed for the Meeting.
ADROIT INNOVATIONS LIMITED IMPORTANT
1. For investors who have used their CPF monies to
(Incorporated in the Republic of Singapore)
buy Adroit Innovations Limited shares, the Annual
Company Registration No. 199302554G
Report is forwarded to them at the request of
their CPF Approved Nominees and is sent 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
PROXY FORM them.
I/We (Name)
of (Address)
being a member/members of Adroit Innovations Limited (the “Company”) hereby appoint:
NRIC/Passport Proportion of
Name Address Number Shareholding (%)
NRIC/Passport Proportion of
Name Address Number Shareholding (%)
as my/our proxy/proxies to vote for me/us on my/our behalf and, if necessary, to demand a poll at the AGM of the
Company, to be held at Level 2 Room Nautica 1, Republic of Singapore Yacht Club, 52 West Coast Ferry Road,
Singapore 126887 on 23 April 2010 at 9.00 a.m. and at any adjournment thereof. I/We direct my/our proxy/proxies
to vote for or against the Resolutions to be proposed at the AGM as indicated hereunder. If no specific directions
as to voting are given, the proxy/proxies will vote or abstain from voting at his/their discretion, as he/they will on
any other matter arising at the AGM. If no person is named in the above boxes, the Chairperson of the AGM shall
be my/our proxy/proxies to vote, for or against the Resolutions to be proposed at the AGM as indicated hereunder,
for me/us and on my/our behalf at the AGM and at any adjournment thereof.
* Please indicate your vote “For” or “Against” with an “X” within the box provided.
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 appointer or his attorney duly authorised in
writing. Where the instrument appointing a proxy or proxies is executed by a corporation, it must be executed 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 3 Phillip Street,
#09-03 Commerce Point, Singapore 048693 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 appointer are not ascertainable from the instructions of the appointer 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.
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