Yanlord Land Annual Report 2008
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YANLORD LAND 仁信治业
持之以恒
Chairman’s Statement Financial Highlights
Operations Review YANLORD LAND GROUP LIMITED 仁恒置地集团有限公司 REG.NO. 200601911K
2008 Annual Report 2008年报
仁信治业
持之以恒
YANLORD LAND
CONTENTS 01
ABOUT YANLORD MISSION STATEMENT
02
CHAIRMAN’S STATEMENT
06
主席致词
08
FINANCIAL HIGHLIGHTS
10
OPERATIONS REVIEW
16
业务回顾
20
OPERATIONAL HIGHLIGHTS
23
DEVELOPMENT SCHEDULE SUMMARY
26
OUR PROJECT SHOWCASE
34
BOARD OF DIRECTORS
38
KEY MANAGEMENT
41 CORPORATE GOVERNANCE STATEMENT
66 NOTES TO THE FINANCIAL STATEMENTS
49 REPORT OF THE DIRECTORS
114 STATEMENT OF DIRECTORS
56 INDEPENDENT AUDITORS’ REPORT
115 INTERESTED PERSON TRANSACTIONS USE OF PROCEEDS
58 BALANCE SHEETS 116 SHAREHOLDING STATISTICS 60 CONSOLIDATED PROFIT AND LOSS STATEMENT 61 STATEMENTS OF CHANGES IN EQUITY 64 CONSOLIDATED CASH FLOW STATEMENT
118 NOTICE OF ANNUAL GENERAL MEETING PROXY FORM CORPORATE INFORMATION
About Yanlord Yanlord develops high-end quality properties that distinguish themselves amidst the localities that they are in. Properties developed by our company are characterised by outstanding architectural design and quality construction. With a track record in developments located at prime locations, our brand name, just like the properties we build, is an icon in itself.
Mission Statement Managing with benevolence and integrity, achieving perpetuity through perseverance
仁信治业
持之以恒
YANLORD LAND
Mr. Zhong Sheng Jian Chairman and CEO
钟声坚 先生
02
集团董事局主席兼总裁
YANLORDLAND 2008 ANNUAL REPORT
Chairman’s Statement
Gross margin grows to 55.5% from 45.1% on the back of a 32.6% increase in ASP Dear Shareholders
S$221.5 million in FY2007 to S$225.8 million in
It is with great pleasure that I present to you Yanlord
FY2008 – a continued indication of the strong
Land Group Limited’s (“Yanlord” and together with
brand value, ability to command premium pricing
its group of companies, “Group”) annual report
and consumer confidence that Yanlord and its
for the financial year ended 31 December 2008
various subsidiaries possess in the PRC high-end
(“FY2008”). In addition to the usual highlights and
residential market.
review of our operating and financial performance over the year, I would like to share with our loyal
While near-term market conditions remain
shareholders my views on the outlook of the PRC
volatile, we are confident of the long-term
real-estate industry and the Group’s development
outlook
plans going forward.
Leveraging on the vast experience of our
of
the
PRC
real
estate
sector.
dedicated and talented management team,
Operational Highlights
we will continue to focus on enhancing our
FY2008 had been a challenging year. Despite this
competitive advantages in high-end residential
challenging operating environment, the Group
development and further augment the Yanlord
remained resilient and achieved a total revenue of
brand name within the PRC real-estate sector.
S$1.01 billion with a total gross floor area (“GFA”)
Our Group has won numerous accolades
of 285,926 sqm delivered in FY2008. While total
as a result of our continue commitment to
GFA delivered and revenue recognized in FY2008
quality and design. Building on our successful
were lower than that of FY2007 by 40.6% and
business model to provide a comprehensive
18.0% respectively, the average selling prices
package that includes differentiating designs,
(“ASP”) of Yanlord’s properties increased 32.6%
quality developments and professional property
to RMB17,294 per sqm (equivalent to S$3,536)
management services, the Group has developed
in FY2008. Attributable to the strong ASP
a strong brand equity in the high-end residential
achieved in FY2008, gross profit margin grew
sector which is well recognised by the market.
10.4% to 55.5% from 45.1% in FY2007 while net
Our commitment to quality continues to attract
profit attributable to shareholders rose 2% from
discerning customers who are willing to pay
03 YANLORDLAND 2008 ANNUAL REPORT
Chairman’s Statement
premium prices and underlines the continued increase in the
accreditation in 2008. The successive nominations reflect the
ASPs for our developments.
success and scalability of our property management services model, and further enhances the Yanlord brand name
As a pan-region premier real-estate developer that excels
with the assurance that residents of our developments will
in the provision of fully-fitted apartment units as well as
continue to enjoy similar standards of living in every Yanlord
quality commercial and integrated property projects in
development.
strategically selected key high-growth cities within the PRC, Yanlord is committed to providing high quality products and
On the back of these successes, the Group was named as China’s
excellent services to our customers. Adhering to its guiding
“Top 10 Foreign Real Estate Company China Investment” by
principle of “Developing land with devotion; building quality
overall ranking and “Top 10 Brand of Foreign Real Estate Company
accommodations with passion”, Yanlord consistently sets
Invested in China” in September 2008 by the China Real Estate
new benchmarks within the PRC real estate sector through
TOP 10 Research Team, who also estimates the Group’s current
the combination of avant-garde designs, quality materials and
brand value to be worth approximately RMB 4.06 billion.
premier finishing to create an environment that balances both form and functionality.
Building our land bank reserves I strongly believe that overcoming adversity is the only way that
Our developments in various high-growth cities in the PRC,
success is forged. The turbulent market conditions will undoubtedly
including Shanghai, Suzhou, Nanjing and Zhuhai, continue to
create opportunities to augment the future development of the Group
enjoy significant brand equity and strong demand by consumers.
and we will capitalise on our strengths to seize such opportunities
Reflecting the market support for its fully furnished quality
for growth when they arise.
developments, one of the Group’s projects in Shanghai, Yanlord Riverside City was ranked by domestic real estate portal Soufun
In February 2008, the Group invested in a residential development
as the residential development with the highest sales revenue
project in Tianjin – Haihe Development Project. The site has a total
in Shanghai for 2008. Separately, our development in Zhuhai
planned GFA of over 320,000 sqm and is ideally situated along
– Yanlord New City Gardens Phase 1 – was accredited with
the picturesque riverfronts of the Xinkai and Ziya rivers. With the
the highest level “Triple A residential project” rating by the PRC
limited availability of prime land within the urban regions of Northern
Ministry of Construction.
China, this project will serve to further extend the Group’s market presence within the Bohai Economic Zone.
The Group’s property management division is an extension of our philosophy to providing buyers of its residential units with
In July 2008, the Group successfully acquired a prime
a comfortable and endearing living environment. Subsequent
residential development site with a total planned GFA of
to our property management company in Shanghai being
approximately 160,000 sqm in Waigaoqiao District, Pudong,
selected as a national model for property management
Shanghai. Strategically situated within Shanghai’s planned
services by the PRC Ministry of Construction, our property
largest eco-development district, the site is amongst the few prime
management company in Nanjing was also awarded the same
residential usage land parcels released for sale in Shanghai in
04 YANLORDLAND 2008 ANNUAL REPORT
Chairman’s Statement
2008 and have been slated for development into high-end
true mettle of a company and discern the long-term economic
prime residential apartments. The site is in close proximity to
viability of an enterprise. As management guru Peter Ferdinand
Shanghai’s comprehensive metro and highway networks and
Drucker once said, “It is only through surviving crisis that a
offer easy access to the city’s financial centre.
business may grow into a successful enterprise.” And as a Chinese poem goes: A hero is differentiated by his ability to
Expansion of investment property portfolio
overcome obstacles, as a flower blooms even more fragrantly
As a key well-balanced business strategy, the Group will continue
after surviving the harsh winter weather.
to focus on delivering stable recurrent income streams through developing premier retail and commercial developments. Currently,
Through its illustrious history, Yanlord has encountered and
the Group has retained an aggregate GFA of approximately 500,000
surmounted many obstacles. These experiences have and
sqm spread across key Chinese cities such as Chengdu, Tianjin
will continue to enhance the Group’s ability to rise above any
and Zhuhai for the development of various commercial properties.
potential challenges. While the current market environment may be challenging, we remain confident of the long-term potential
Construction of our major projects in Chengdu (Yanlord
of the PRC real estate sector. Moving forward, the Group will
Landmark) and Tianjin (Yanlord Riverside Plaza) continues
continue to maintain a sound financial policy, prudent investment
to be on-track. Of particular note, construction of Yanlord
strategies while focusing on improving our quality control,
Landmark in Chengdu remains on schedule despite the
property management, human resources, cultural and other
Szechuan earthquake in 2008. Slated to open in end 2009, the
operational aspects to enhance the value of our products and
tender for units at Yanlord Landmark had attracted renowned
services. It is only through such efforts that we can cater to the
international fashion brands who have signed preliminary lease
long-term benefits of Yanlord shareholders.
agreements with payment of initial rental deposits.
In appreciation In addition, the Group’s key development in Tianjin – Yanlord
On behalf of our Board of Directors, I would like to express our
Riverside Plaza – continues to attract the interest of many globally
sincerest gratitude to our shareholders for their trust and support.
renowned retailers. Slated to open in 2011, the Group has recently
In appreciation, the Board of Directors has proposed a first and
signed a preliminary anchor tenant lease agreement with an Asian
final dividend of 1.23 Singapore cents per share, representing
based multi-national departmental store for approximately 50,000
a dividend payout of approximately 10% of FY2008 net profit
sqm GFA, and continues to receive enquiries for other shop lots
attributable to equity holders. We will continue to build on our
within the development.
success towards future developments and endeavor to increase shareholder value.
Outlook 2008 has been one of the most turbulent years in recent memory with shockwaves from the financial sector resonating across all aspects of the global economy. However, it is in such challenging times that we are able to put to test the
05 YANLORDLAND 2008 ANNUAL REPORT
主席致辞 尊敬的各位股东： 本人在此呈报仁恒置地集团2008年度诸项业绩，同时也与各位股东 分享本人对中国地产业及集团未来发展前景的一些思考。
经营业绩亮点纷呈 与2007年相比，2008年的地产市场呈现巨大波动。虽然2008年销 售面积为285,926平方米，同比减少40.6%，但是集团2008年的销 售均价同比上升32.6%，达到每平方米人民币17,294元（等同新币 3,536元）；2008年的毛利率为55.5%，同比上升10.4个百分点。虽
受惠于物业平均销售价上 扬32.6%，2008年毛利率由 45.1%劲升至55.5%
然2008年的销售收入约为新币10亿零7百万元，同比减少18.0%， 但2008年公司股东权益的净利润约为新币2亿2,584万元，同比上升 2%；显示出仁恒各成员企业在中国不同地区高端房地产市场的开 发实力、溢价能力和品牌价值。
商业操守，集团的市场影响和品牌价值稳步提升，被专业机构 评为“2008年海外在中国投资房地产上市公司综合实力TOP10企
面对市场的波动，集团管理层冷静思考，深入分析，沉着应对，进
业”和“2008海外在中国投资的房地产公司品牌TOP10”，企业品
一步增强仁恒在高端物业领域的竞争优势。集团在项目开发与产品
牌价值跃升至40.63亿元人民币。
链的每一个环节上精益求精，通过差异化设计、精细化施工、专业 化物业管理等一系列举措为客户创造更高的附加值。集团的经营模
土地储备稳步增加
式成就了仁恒的品牌价值，赢得了市场，满足了客户需求，得到了
我坚信，严冬孕育着春蕾，市场的波动与行业的调整孕育着更大的
各方的高度认可。
机遇。本着稳健经营的原则，2008年集团在天津、上海再添优质地 块，进一步增强了持续发展能力。
作为一个在中国从事跨区域、跨城市、跨业态开发经营的企业，仁 恒高度重视产品与服务的品质，以“善待土地、用心造好房”作为
2008年1月，集团收购了天津滨河水岸项目。项目毗邻新开河与子牙
自己持续追求的目标和不懈奋斗的动力。2008年，集团在上海、苏
河，建筑面积超过32万平方米，是中国北部城市稀缺的优质地块。
州、南京、珠海等地的楼盘均以优良品质受到消费者和业内同行的
集团在渤海湾经济区的市场地位进一步得到巩固。
认可。其中上海仁恒河滨城项目再次获得上海市年度住宅销售冠 军，销售业绩和市场反响令业内瞩目；珠海仁恒星园一期更是达到
2008年7月，集团摘牌获得了上海浦东新区外高桥五洲大道地块，
了中国国家建设主管部门对住宅产品的最高认定标准：“3A”级。
该地块是08年上海出让的为数不多的几个住宅地块之一，位置优
继上海仁恒物业管理公司之后，南京仁恒物业管理公司亦被评为
越，邻近轨道交通，处于规划中上海最大的绿地公园之内，建筑
国家物业管理一级资质企业。正是由于集团稳固的市场地位及
面积近16万平方米，适合开发高端的国际社区。
06 YANLORDLAND 2008 ANNUAL REPORT
主席致辞
持有投资物业稳步推进 集团目前在建的商用物业分布在成都、天津与珠海等地, 持有投 资物业总面积约50万平方米。值得一提的是，成都仁恒置地广场 （“置地广场”）项目进展顺利，没有因四川强震而滞后。项目招 商正按计划进行，已与多个国际一线品牌签订了意向协议，并收取 了租赁定金。置地广场的商场计划约于2009年底试营业，届时将成 为成都市最高档的购物中心之一。 集团位于天津的海河广场项目也进展顺利，集团已就其中面积达 5万平方米的主力百货商场与亚洲知名的企业集团签订了租赁意向 协议，预计2011年开始营业。
未来展望 2008年是世界动荡的一年，一场百年一遇的金融危机席卷了全世 界，也波及了中国经济。仁恒在发展的过程中曾经受了多次市场 考验和洗礼。但仁恒不断学会在危机中提高自己，在危机中继续 发展。正如管理学家德鲁克所说：只有经过多次危机洗礼的企 业，才能成长为伟大的企业。正可谓：自古英雄多磨难，梅花香 自苦寒来。 面对目前的困难与多变的市场环境，集团将继续保持稳健的财务政 策、审慎的投资策略，不断地提高质量控制、企业管理、人才、 制度、及文化等方面的水平，使我们的产品在各个环节都做得更 好，从而提升仁恒产品的附加值。只有这样，我们才能对股东的 长远利益负责。 Yanlord International Apartments Clubhouse
致谢 本人代表集团感谢所有股东的信任和支持。作为回报，集团董事 局建议以约净利润的10%派发股息，每股的首次及末期分红为新币 1.23仙。集团上下将继续努力，为股东创造更大价值。
07 YANLORDLAND 2008 ANNUAL REPORT
仁信治业
持之以恒
YANLORD LAND
Financial Highlights
08 YANLORDLAND 2008 ANNUAL REPORT
Financial Highlights
Revenue and Profitability FY2006 - FY2008
Revenue
Gross Profit
(s$million)
Profit for the Year
(s$million)
Net Profit Attributable to Equity Holders
(s$million)
06
07
08
FY
337 281
559
553 438
200
200
100
06
07
08
FY
100
06
07
08
FY
226
FY
200
300
222
500
400 1,007
1,014
1,000
300
07
08
171
600
1,228
1,500
314
(s$million)
06
Credit Ratios As at 31 December
2006
2007
2008
Net Debt / Equity Total Debt / Equity Total Debt / Capitalization(1)
Net Cash 47% 29%
19% 65% 33%
64% 84% 40%
(1) Capitalization = Total debt + Equity attributable to equity holders of the Company + Minority interests
09 YANLORDLAND 2008 ANNUAL REPORT
仁信治业
持之以恒
YANLORD LAND Yanlord Peninsula
Operations Review
Yanlord continues to extend its market penetration and product diversity to complement existing revenue streams and derive greater value for shareholders
10 YANLORDLAND 2008 ANNUAL REPORT
Operations Review
Profit and Loss Highlights Net Profit Margin
(S$’000)
(%)
(%)
Revenue
60
40
20
31
27
40
45
56
Gross Profit Margin
2008 1,007,217
Gross profit
553,296
559,468
Profit before income tax
537,591
580,883
Profit for the year
336,704
313,956
Net profit attributable to equity holders
221,500
225,841
20
EPS (on the weighted average number of ordinary shares) (S$ cents)
FY
2007 1,227,932
07
08
FY
07
08
Delivered GFA (sqm) ASP (RMB)
12.52
12.35
481,028
285,926
13,038
17,294
Operations Review
Balance Sheet Highlights
Despite the market volatility witnessed in FY2008, the
(S$’000)
2007
2008
Group continues to remain resilient, net profit attributable to
Current assets
2,032,970
2,265,901
shareholders grew by 2.0% from S$221.5 million in FY2007
Non-current assets
1,750,927
2,553,279
to S$225.8 million in FY2008. While total GFA delivered in
Total assets
3,783,897
4,819,180
FY2008 was 40.6% or 195,102 sqm lower at 285,926 sqm
Current liabilities
945,037
1,219,672
than 481,028 sqm recognised in FY2007, average selling
Non-current liabilities
849,061
1,269,132
prices (“ASP”) of Yanlord’s delivered properties increased by
Total liabilities
1,794,098
2,488,804
32.6%, from RMB13,038 per sqm in FY2007 to RMB17,294
Minority interests
454,607
461,051
per sqm in FY2008. The Group’s resilient performance
Equity attributable to equity holders
1,535,192
1,869,325
0.84
1.02
reflects the strong brand equity and consumer confidence which Yanlord possesses in the PRC high-end residential
Net asset value per share (S$ )
market, overcoming the recessionary impacts brought on by
the global economic downturn.
Borrowings and Debt Short term debt
173,670
350,027
Earnings per share (“EPS”) remained stable in FY2008 from
Long term debt
525,940
898,930
FY2007 at 12.35 Singapore cents, while EPS on a fully diluted
Convertible notes
299,195
323,562
basis was 11.66 Singapore cents.
Total debt
998,805
1,572,519
11 YANLORDLAND 2008 ANNUAL REPORT
Operations Review
The Group recorded a total 527,018 sqm of completed GFA in Shanghai, Nanjing, Suzhou and Chengdu in FY2008. Total GFA
(1) Commitment to product and service quality standards to ensure that additional value is generated for our customers.
under development as at 31 December 2008 was 1,228,650 sqm distributed across Shanghai, Nanjing, Suzhou, Zhuhai, Tianjin and Chengdu. In FY2008, the Group commenced construction work
(2) Complement existing marketing efforts with more marketing channels to broaden the target client groups.
on 494,380 sqm GFA located mainly in Shanghai, Nanjing, Zhuhai and Suzhou. The Group has also acquired additional land bank
(3) Augment core competencies of the marketing team.
of 485,574 sqm GFA in Tianjin (Haihe land plot) and Shanghai (Waigaoqiao land plot).
(4) Continued focus in developing Yanlord’s brand equity and recognition within the industry; leveraging on our brand equity to drive sales as
The Group was named as China’s “Top 10 Foreign Real Estate
well as increasing flexibility on adjusting to prevailing market trends.
Company China Investment” by overall ranking and “Top 10 Brand of Foreign Real Estate Company Invested in China” by
As at 31 December 2008, Yanlord attained total contracted but un-
the China Real Estate TOP 10 Research Team, a joint research
booked pre-sales of approximately S$238.1 million, representing a
group consisting of Development Research Center of the State
total undelivered GFA of approximately 56,894 sqm.
Council, Real Estate Research Institute of Tsinghua University and China Index Academy, in September 2008. The study
Property Development
also estimates the Group’s current brand value to be worth
The Group continued its steady pace of new developments in FY2008.
approximately RMB 4.06 billion.
For the year under review, we completed a total GFA of 527,018 sqm with key developments in Shanghai, Nanjing, Suzhou and Chengdu.
Sale of Properties
This brings the Group’s cumulative total completed GFA to 2,926,844
In FY2008, the Group’s revenue was derived from mainly the
sqm. Adhering to our corporate philosophy “to develop land with
sale of properties at Yanlord Riverside City Phase 2 and 3
devotion and building quality accommodation with passion” we
(Shanghai), Yanlord Yunjie Riverside Gardens (Shanghai),
continue to strive for safety and excellence in our developments which
Bamboo Gardens Phase 3 (Nanjing), Yanlord International
has won recognition from our clients and industry peers.
Apartments (Nanjing), Yanlord Peninsula (Suzhou) and Hengye Star Gardens (Chengdu).
Testament to the Group’s development quality, our Zhuhai Yanlord New City Gardens Phase 1 development was awarded with a
In view of market volatility and changing regulatory policies, the
“Triple A residential project” accreditation by the PRC Ministry of
Group has initiated a series of key measures that will enable it
Construction while our Shanghai Yanlord Riverside City development
to capitalise on potential growth trends and further enhance the
was similarly awarded the Gold award for quality development by
Group’s property sales revenue. The key measures include:
the Shanghai Real Estate Association.
12 YANLORDLAND 2008 ANNUAL REPORT
Operations Review
Commercial Property Portfolio
Group – with an 80% ownership in the project - plans to develop
The development of our commercial property portfolio represents
the plot of land into fully-fitted apartments.
the Group’s strategic initiative to leverage on Yanlord’s brand equity in the development of premier residences and create
In July 2008, the Group successfully tendered for a prime residential
additional revenue streams to complement the Group’s existing
development site with a site area of 97.074 sqm and a total planned
businesses.
GFA of approximately 160,000 sqm in Waigaoqiao District, Pudong, Shanghai. Strategically situated within Shanghai’s planned largest eco-
The Group has retained an aggregate GFA of approximately 500,000
development district, the site was amongst the few prime residential
sqm in various key high-growth PRC cities such as Chengdu, Zhuhai,
usage land parcels released for sale in Shanghai in 2008 which is slated
Nanjing and Tianjin for the development of high-end commercial
for development into high-end prime residential apartments. These
developments. Sited in city-centric locations, these developments
sites are in close proximity to Shanghai’s comprehensive metro and
possess high intrinsic value and development potential.
highway networks and offer easy access to the city’s financial centre.
Focused on developing high-end commercial projects that include
As at 31 December 2008, the Group has a total land bank of 3.78
retail malls, grade A office suites, five-star hotels and serviced
million sqm in GFA sited in city-centric locations within key high-growth
apartments, the Group optimises the mix of each investment
cities of the PRC, and which possess high growth and development
property project to maximize returns and generate a recurring
potential. Of the total land bank, properties under development
revenue stream that will boost shareholder’s value.
accounted for approximately 1.23 million sqm GFA.
Land Bank Reserves
Product Development
In view of market fluctuations and turbulences surrounding the real-
Yanlord places great emphasis in developing quality projects.
estate sector in FY2008, the Group was proactive in monitoring
Through deployment of the latest technologies and techniques,
market developments and targeted regions that exhibit high
we continuously enhance the quality of our developments and
economic growth potential, high standards of living and of prime
customize each development according to regional requirements.
locations for investments to strategically grow the Group’s land bank and development potential.
For instance, at our Shanghai Yanlord Riverside City, the Group used an “aquatic floor radiant-heating system” to generate
In February 2008, the Group invested in a residential development
temperature appropriate for the human body. In addition, this
project in Tianjin – Haihe Development Project. The site is over
technology generates up to a 10-15% in energy savings. The
130,000 sqm with a total planned GFA of approximately 320,000
Group also initiated the construction of an innovative eco-friendly
sqm and is ideally situated along the picturesque riverfronts of
underground carpark which is illuminated by direct sunlight, giving
the Xinkai and Ziya rivers. Located within central Tianjin city, the
the underground car-park a green and fresh environment.
13 YANLORDLAND 2008 ANNUAL REPORT
Operations Review
For Yanlord Riverside Plaza, located in Tianjin, the Group has
Human Resource
constructed a unique “Ecological Atrium” within the interior
Yanlord regards human resource as one of its most valuable
compounds of the Plaza to mitigate the harsh northern winters and
assets and a key contributor to the Group’s continued success.
create a lush environment for its residents and retail customers.
The Group has also adopted a series of effective selection, development, reward and retention policies to attract and
The Group constantly exceeds the changing demands of our
retain talented employees that contribute to the Group’s
discerning customers through a focused development strategy
continued development. Operating on our mission statement
to amalgamate the latest building designs and techniques
of “Managing with benevolence and integrity, achieving
with premium quality finishing. We have also taken into account
perpetuity through perseverance”, we believe in treating our
environmental concerns and have started various ecological
employees with trust, understanding and respect. We actively
initiatives to further enhance our developments.
seek to maintain a working environment that is conducive for
Property Management
continuous learning thereby allowing employees to develop to their full potential.
The Group is one of the pioneers in introducing international property management concepts to the PRC. In applying the
Yanlord regards employee development and training as an
Group’s management philosophy to render a comfortable and
integral function. We attach great importance to the development
endearing living environment for our customers, the Group employs
of working teams within the organisation, and regard the role of
the latest technology and quality assurance standards to optimise
the manager as one of “managing operations” and “nurturing
our management model. The Group works tirelessly in improving
employees”. The Group has in place a series of training programs
our property management service levels and through such efforts,
for managers to enhance their management capabilities.
offer our clients a unique “Yanlord” experience in superior living conditions and excellence in service and care for our customers.
Investor Relations Corporate transparency and timely disclosure of information to
Currently our Shanghai and Nanjing property management
shareholders is of key importance to Yanlord. We endeavor to
companies have received national level accreditation for Class
maintain a high standard of corporate governance and proactively
1 Property Management Companies. Combining our wealth of
seek to engage the investment community to facilitate the
experience and capability in property management, we have
understanding of our Group’s business strategies and growth
developed an experienced and professional management
potentials. Quarterly financial reports as well as announcements
team that continues to excel in the provision of quality property
and press releases are also promptly posted on the SGX website
management services. To-date our property management
and our corporate website, ensuring that investors receive timely
teams have won numerous awards at the national, provincial
and accurate information.
and municipal levels.
14 YANLORDLAND 2008 ANNUAL REPORT
Yanlord International Apartments Lobby Area
业务回顾 经营业绩概况 2008
1,227,932
1,007,217
毛利润
553,296
559,468
税前利润
537,591
580,883
净利润
336,704
313,956
股东应占净利润
221,500
225,841
毛利率 (%)
净利润率 (%)
60
40
每股盈利(新币,仙)
40
12.52
12.35
实现面积(平方米)
481,028
285,926
实现均价(人民币)
13,038
17,294
(以加权平均股数计算)
45
56
20
31
营业收入
2007
27
(新加坡币,千元)
20
FY
07
08
FY
07
08
资产负债概况 (新加坡币,千元) 流动资产
2007 2,032,970
2008 2,265,901
非流动资产
1,750,927
2,553,279
总资产
3,783,897
4,819,180
业绩概要
流动负债
945,037
1,219,672
2008年，虽然面临市场波动，但全年公司股东权益的净利润仍录
非流动负债
849,061
1,269,132
得新币2亿2,584万元，同比上升2.0%。尽管2008年集团物业实现
1,794,098
2,488,804
销售面积为285,926平方米，相比2007年481,028平方米，减少了
小数股东权益
454,607
461,051
40.6%或195,102平方米，但集团2008年物业实现销售均价从2007年
股东应占权益
1,535,192
1,869,325
的每平方米人民币13,038元上升至每平方米人民币17,294元，上涨
0.84
1.02
总负债
幅度为32.6%。上述经营业绩是在金融海啸全球扩散、世界经济动 每股资产净值(新币,元)
取得的，再次显示了仁恒在中国高端房地产市场的开发实力、溢
借贷及债务 短期借贷
173,670
荡不安、中国地产市场波动调整、消费者信心受到冲击的情况下 价能力和品牌价值。
350,027
长期借贷
525,940
898,930
2008年集团每股盈利为新币12.35仙，摊薄后每股盈利为新币
可换股债券
299,195
323,562
11.66仙，均与2007年度基本持平。
总贷款额
998,805
1,572,519
16 YANLORDLAND 2008 ANNUAL REPORT
业务回顾
2008年，集团竣工面积527,018平方米，主要分布于上海、南京、
项目开发
苏州和成都等四大城市；年末在建面积1,228,650平方米，主要分
2008年，集团各大项目的开发建设稳步推进。全年竣工建筑面积为
布于上海、南京、苏州、珠海、天津和成都等六大城市；新开工
527,018平方米，主要分布于上海、南京、苏州和成都等四大城市。
面积494,380平方米，主要分布于上海、南京、珠海、天津等四大
至此，集团中国境内累计竣工交付面积达到2,926,844平方米。
城市。2008年，集团新增土地储备485,574平方米，分别是天津的 滨河水岸项目和上海的五洲大道项目。
集团坚持“善待土地、用心造好房”的开发理念，各交付项目均 在工程质量和产品品质上精益求精，获得了市场和业主的广泛
集团的开发实力、经营业绩和品牌价值获得了市场和客户的高度
认可，如：珠海星园一期通过国家建设部3A级住宅性能认定，
认可。2008年，集团被国务院发展研究中心企业研究所、清华大
上海仁恒河滨城被上海市房地产行业协会评为上海市优秀住宅
学房地产研究所和中国指数研究院共同发起设立的“中国房地产
金奖。
TOP10研究组”评为“2008年海外在中国投资房地产上市公司综合 实力TOP10企业”，并被评为“2008海外在中国投资的房地产公司
商业地产
品牌TOP10”，企业品牌价值跃升至40.6亿元人民币。
商业地产开发经营是集团面向未来、增强综合竞争力的战略性举 措。集团以高档社区购物中心、中央商务区的都市型购物中心、
物业销售
甲级写字楼、五星级酒店及服务式公寓作为未来商业房地产开发
集团2008年销售物业主要包括：上海的仁恒河滨城二期、三期和仁
的主要发展方向，优化不同业态的组合，实现住宅和商业地产的
恒运杰河滨花园项目；南京的仁恒翠竹园三期和仁恒国际公寓；苏
优势互补，互相促进，获取持续稳定的现金流及持续的物业增值，
州的星岛仁恒和星屿仁恒以及成都的恒业星园项目。
为股东创造更多的价值。
面对全球经济和国内市场波动，集团深入分析市场形势，密切关
集团在中国的一些主要城市中心地段投资建设高端商用物业，总
注政策走向，积极把握行业发展动态，采取多项措施促进物业销
建筑面积约50万平方米。主要分布在成都、珠海、南京、天津。
售，主要包括：
这些物业位置优越，具有非常可观的价值。
（1） 坚持以产品和客户为导向，精益求精提升产品品质和服务质
土地储备
量，不断提高产品附加值，给予客户更多的增值服务。
面对2008年房地产市场的调整与波动，集团紧密跟踪市场动态，重
（2） 积极拓展各类渠道，充分挖掘各方潜力聚集目标客户。
点在经济发达、生活富裕的国际化城市考察和投资位置优越、富有
（3） 加强营销团队的建设，提高营销专业能力。
增值潜力的项目和地块，进一步增强公司的持续发展能力。
（4） 推动品牌建设和推广，扩大仁恒品牌知名度和行业影响力， 以品牌带动销售，增强适应市场变化的能力。
2008年2月，集团收购了天津仁恒滨河水岸项目。项目毗邻新 开河与子牙河，是中国北部城市稀缺的优质地块。项目占地约
于2008年12月31日，集团尚有56,894平方米已销售物业未交付结
13万平方米，建筑面积约320,000平方米，集团占80%的权益，
算，合同金额总计新币2.38亿元。
将建造成为天津市中心城区精装修、生态型、国际化的高档滨 河社区。
17 YANLORDLAND 2008 ANNUAL REPORT
业务回顾
2008年7月，集团摘牌获得了上海浦东新区外高桥五洲大道地块，
目前，仁恒物业旗下拥有上海仁恒物业和南京仁恒物业两家国
该地块是08年上海出让的为数不多的几个住宅地块之一，位置优
家物业管理一级资质企业，形成了一支拥有丰富物业管理经验
越，邻近轨道交通，处于规划中上海最大的绿地公园之内。项目
的专业团队。仁恒物业管理的项目获得了多项市优、省优、国
占地面积97,074平方米，建筑面积约160,000平方米，将建造成上
优荣誉。
海浦东又一高品质、精装修的国际化社区。
人力资源 截至2008年年底，集团储备土地可开发面积约为378万平方米，其
仁恒通过优秀的企业文化来吸引和保留员工，视员工为企业的合
中在建面积约为123万平方米。这些项目多位于中国高增长城市的
作伙伴，信任、理解并善待员工，一直保持着员工队伍的相对稳
核心地段，具有可观的升值潜力。
定和不断成长。
产品研发
仁恒认为人才是企业的无形资产、第一资源，通过采取一系列措
仁恒高度重视产品研发工作，注重对新型、环保、绿色生态建筑
施，来有效实现对高素质管理团队和员工队伍的选、用、育、留
的研究与实践，根据项目情况采用各类先进技术和工艺，提升项
和激励。
目品质，满足客户对产品品质日益提高的需求。 公司在整个集团范围内，坚持并倡导统一的企业宗旨和核心价值 例如在上海仁恒河滨城项目中，公司采用了低温热水地板辐射采
观：“仁信治业，持之以恒”，并以此作为招募选拔和评估考核
暖技术，创造出真正符合人体散热要求的热环境，并节省采暖能
人才的标准。集团通过营造“低调务实，快乐向上”的组织氛围
耗10-15%；同时创新地建造超大面积下沉式阳光内庭地下车库，将
和人性化管理，来为员工提供展现能力和实现个人价值的平台，
地面的自然景观延伸到地下，为车库引入阳光及清新空气。
积极为员工营建适合而富有创造性的发展空间，鼓励员工积极而 卓越的工作，实现企业与员工的“双赢”发展。
在天津海河广场项目中，公司设计了生态中庭，针对北方四季变 化的气候特征，在寒冷的冬季，为消费者和小区业主提供了一处
对员工的持续培训与教育被认为是管理层一项非常重要的任务，
宝贵的绿色休闲空间。
集团非常重视职业经理人队伍建设，明确经理人的职责在于“做 事”与“育人”，借助涵盖全体员工的各类丰富的培训机会，辅
物业管理
之以人力资源优化措施，集团也由此实现了人力资源质量持续提
仁恒物业在中国大陆较早引入国际上先进的物业管理经验和理念，
升的战略目标。
将“恒心服务，一生呵护”的服务宗旨融入到“以人为本，客户至 上，注重细节，追求完美”的服务中去。
投资关系 集团注重向投资者提供及时、准确的讯息批露，并建立了一系列
仁恒物业注重引入新的科技成果和质量保证体系，持续完善和优化
有系统的沟通管道，向股东、投资者及分析员提供定期及可靠的
自身的管理模式，不断提升物业管理服务水平，以出色的服务使
讯息。季度业绩报告及各项公告和新闻稿均通过新加坡证券交易
业主享受中国内地超前的“星级酒店管家式”服务和“仁恒”个
所的官方网站公告及仁恒置地集团网站及时发布。
性化服务。
18 YANLORDLAND 2008 ANNUAL REPORT
仁信治业
持之以恒
YANLORD LAND
Operational Highlights Gross Property Sales by City in FY2008
Nanjing 20.3%
Shanghai 61.9%
GFA Contribution by City in FY2008
Suzhou 12.8%
20
Chengdu Hengye Star Gardens 5.6% Nanjing Yanlord International Apartments 8.2%
Chengdu 5.6% Others 2.2%
Shanghai Yanlord Riverside City (Phase 2) 34.3%
Suzhou Yanlord Peninsula 10.0% Yunjie Riverside Gardens Phase 1 4.3%
GFA Contribution by Project in FY2008 Shanghai 35.1%
Others 5.0%
Nanjing Bamboo Gardens (Phase 3) 11.9%
Suzhou 10.0%
Others 4.6%
Chengdu 21.8%
Gross Property Sales by Project in FY2008
Chengdu Hengye Star Gardens 21.8%
Others 6.7%
Nanjing Yanlord International Apartments 7.5% Nanjing 25.7%
YANLORDLAND 2008 ANNUAL REPORT
Nanjing Bamboo Gardens (Phase 3) 18.1%
Shanghai Yanlord Riverside City (Phase 3) 20.7%
Shanghai Yanlord Riverside City (Phase 2) 17.7% Shanghai Yanlord Riverside City (Phase 3) 9.3% Yunjie Riverside Gardens Phase 1 6.1% Suzhou Yanlord Peninsula 12.8%
Guiyang 1.7% Zhuhai Suzhou 3.5% 1.3% Chengdu 4.8%
Completed Development Properties
Segregation of GFA by Development Status & Cities
Shanghai 57.8%
Total
Nanjing 30.9%
2.93
million sqm
Properties Under Development
Suzhou 15.4%
Tianjin 15.1%
million sqm
Zhuhai 26.5%
Chengdu 13.6%
Suzhou 13.0%
Tianjin 18.8%
Nanjing 13.5%
Total
1.23
Properties Held for Future Development
Shanghai 15.9%
Total
2.55
million sqm
Zhuhai 8.5%
Shanghai 14.7%
Nanjing 24.1%
Shenzhen 20.9%
21
YANLORDLAND 2008 ANNUAL REPORT
Yanlord Riverside City
仁信治业
持之以恒
YANLORD LAND
Development
Schedule Summary
Completed Development Properties
Project Yanlord Plaza (1) (仁恒广场) Yanlord Apartments (仁恒公寓) Yanlord Gardens (Phase 1-3) (仁恒滨江园，一 - 三期) Yanlord Riverside City (Phase 1) (仁恒河滨城，一期) Yanlord Riverside City (Phase 2) (1) (仁恒河滨城，二期) Yanlord Riverside City (Phase 3) (仁恒河滨城，三期) Yanlord Town (仁恒家园) Yanlord Riverside Gardens (Phase 1) (仁恒河滨花园，一期) Yanlord Riverside Gardens (Phase 2) (仁恒河滨花园，二期) Yunjie Riverside Gardens (Phase 1) (运杰河滨花园，一期) Plum Mansions, including Lakeside Mansions (Phase 1-4) (梅花山庄.湖畔之星) Orchid Mansions (1) (玉兰山庄) Bamboo Gardens (Phase 1) (翠竹园，一期) Bamboo Gardens (Phase 2) (翠竹园，二期) Bamboo Gardens (Phase 3) (翠竹园，三期) Yanlord International Apartments, Tower A (1) (仁恒国际公寓，A栋) Yanlord International Apartments, Tower B (仁恒国际公寓，B栋) Hengye International Plaza (1) (恒业国际广场) Hengye Star Gardens (1) (恒业星园) Xintian Centre (新天商业中心) Yanlord Villas (仁恒别墅) Yanlord New City Gardens (Phase 1) (1) (仁恒星园，一期) Yanlord Peninsula (Townhouse - Phase 1) (星岛仁恒，一期) Total
City
Interest Commencement Attributable Date Completion Date
Remaining Unsold/Held for Investment /Fixed Assets (Saleable GFA (sqm) Area, sqm) Type
Shanghai
67%
March-93
November-96
53,049
4,189
R,S
Shanghai
67%
November-94
November-97
13,579
0
R
Shanghai
67%
November-97
September-03
415,360
957
R
Shanghai
67%
May-03
September-06
264,765
2,419
R
Shanghai
67%
August-05
May-08
265,522
42,278 (2)
R,S
Shanghai
67%
March-07
December-08
110,616
83,836
R
Shanghai
50% September-05
December-07
83,325
486
R
Shanghai
56%
May-02
November-05
191,230
0
R
Shanghai
56%
May-02
March-07
136,132
0
R
Shanghai
51%
March-05
April-08
157,295
18,140
R
Nanjing
100%
May-94
December-02
327,667
1,045
R
Nanjing
100%
November-00
September-03
69,649
1,003
R
Nanjing
100%
November-00
October-03
118,230
742
R
Nanjing
100%
December-03
December-07
156,357
668
R
Nanjing
100%
March-06
December-08
118,175
28,414
R
Nanjing
100%
May-04
December-07
60,796
43,567
H
Nanjing
100%
May-04
June-08
52,202
37,409
R
Chengdu
51%
December-04
April-06
40,665
40,665
S
Chengdu
51%
May-06
April-08
101,032
20,361
R,S
Guiyang
67%
November-03
October-04
14,376
996
S
Guiyang
67%
June-04
March-06
36,131
825
R
Zhuhai
90%
September-06
December-07
101,624
3,077
R,S
Suzhou
100%
November-05
January-08
39,067
2,400
R
2,926,844
333,477
R = Residential O = Office S = Shop & Retail H = Hotel & Service Apartment (1) Consists of properties held for investment with unexpired terms of lease between 35-65 years as at 31 December 2008 (2) Consists of 10,362 sqm of saleable area of shop space
23
YANLORDLAND 2008 ANNUAL REPORT
Development Schedule Summary
Properties Under Development
Project Yanlord Peninsula (Townhouse - Phase 2) (星岛仁恒，二期) Yanlord Peninsula (Apartment - Phase 1)
City
Interest Attributable
Actual Commencement Date
Estimated Completion Date GFA (sqm)
Type
Suzhou
100%
May-06
July-09
50,072
R
(星屿仁恒，一期) Yanlord Peninsula (Apartment - Phase 2) (星屿仁恒，二期) Suzhou Wuzhong Area C1 Land - Villas (苏州吴中区C1地块-别墅) Yanlord New City Gardens (Phase 2 - Section1) (仁恒星园，二期一段) Yanlord New City Gardens (Phase 2 - Section2) (仁恒星园，二期二段) Yanlord Riverside City (Phase 3)
Suzhou
100%
May-06
April-09
49,501
R
Suzhou
100%
May-06
1st Quarter 2010
74,831
R
Suzhou
100%
October-08
1st Quarter 2012
15,100
R
Zhuhai
90%
August-07
December-09
107,981
R
Zhuhai
90%
May-08 3rd Quarter 2011
217,779
R
(仁恒河滨城，三期) Yunjie Riverside Gardens (Phase 2) (运杰河滨花园，二期) Yanlord Riverside Plaza (Phase 1) (海河广场，一期) Yanlord Landmark (仁恒置地广场) Yanlord Yangtze Riverside City (Phase 1) (仁恒江湾城，一期)
Shanghai
67%
March-07 2nd Quarter 2010
99,506
R
Shanghai
51%
July-08
4th Quarter 2012
95,290
R
Tianjin
100%
October-07
4th Quarter 2010
185,589
R,S
Chengdu
100%
August-06 3rd Quarter 2010
166,790
O,S,H
Nanjing
60%
166,210
R
Total
R = Residential O = Office S = Shop & Retail H = Hotel & Service Apartment
24 YANLORDLAND 2008 ANNUAL REPORT
January-08
4th Quarter 2010
1,228,649
Development Schedule Summary
Properties Held for Future Development
Project Shanghai San Jia Gang Land Plot (仁恒滨海度假村) Shanghai New Jiangwan Urban Area Land (上海新江湾地块) Shanghai Waigaoqiao Area Land (上海森兰外高桥地块) Shanghai Qingpu District Land (上海青浦地块) Yanlord Yangtze Riverside City (Phase 2) (仁恒江湾城，二期) Yanlord Yangtze Riverside City (Phase 3-4) (仁恒江湾城, 三，四期) Nanjing Hexi New Urban Area Land (南京河西新地块) Yanlord Riverside Plaza (Phase 2) (海河广场，二期) Tianjin Haihe Land (天津海河地块 - 仁恒滨河水岸) Shenzhen Longgang District Redevelopment Project (深圳龙岗区 - 城中村改造项目) Shenzhen Longgang District Economic Residential Housing (深圳龙岗区 - 经济适用房) Yanlord Lakeview Bay (仁恒双湖湾) Yanlord Marina Centre (仁恒滨海中心) Total
Interest City Attributable
Estimated Commencement Date
Estimated Completion Date
GFA (sqm)
Type
Shanghai
67%
Under Planning
Under Planning
35,831
R
Shanghai
100%
2009
2011
65,050
R
Shanghai
100% (1)
2009
2011
158,604
R
Shanghai
51%
2009
2011
117,459
R
Nanjing
60%
2009
2012
191,100
R
Nanjing
60%
2011
2014
330,690
R
Nanjing
60%
2010
2013
93,281
R
Tianjin
100%
Under Planning
Under Planning
151,611
R,O
Tianjin
80%
Under Planning
Under Planning
326,970
R
Shenzhen
75%
Under Planning
Under Planning
390,000
R
Shenzhen
75%
Under Planning
Under Planning
144,064
R
Suzhou
100% (2)
2009
2013
331,188
R
Zhuhai
95%
2009
2015
216,582 R,O,S,H 2,552,430
R = Residential O = Office S = Shop & Retail H = Hotel & Service Apartment
(1) Subject to legal transfer of shareholding interest as provided in our SGXNET announcement dated 27 February 2009 (2) Subject to legal transfer of shareholding interest as provided in our SGXNET announcement dated 27 February 2009
25 YANLORDLAND 2008 ANNUAL REPORT
仁信治业
持之以恒
YANLORD LAND
Our Project
Showcase
Developments in a class of their own Selected Key Projects for FY2009
Tianjin
Nanjing
Chengdu
Shanghai Suzhou
Guiyang Zhuhai Shenzhen
26 YANLORDLAND 2008 ANNUAL REPORT
27 YANLORDLAND 2008 ANNUAL REPORT
Our Project Showcase
SHANGHAI Yanlord Riverside City Yanlord Riverside City carries on Yanlord’s tradition of building high-end residences as represented by Yanlord Gardens and Yanlord Riverside Gardens. The project, part of the Lianyang International Community, is located at the heart of Pudong New Area’s Administrative and Cultural Center. Adjacent to the crossing of major transportation routes of Dingxiang Road and Jinxiu Road, it offers easy connection to Lujiazui Finance and Trade Zone, Pudong International Airport, Jinqiao Export Processing Zone, Waigaoqiao Free Trade Zone and Zhangjiang Hi-tech Park where a large number of foreign invested businesses are in operation. Yanlord Riverside City is blessed with many amenities, including the 140-hectare Century Park to the south, and Shanghai Science and Technology Museum, Oriental Art Center, Tomson Golf Course within its vicinity. Yanlord Riverside City has a GFA of 740,000 m2 . The green area ratio of the project is as high as 60%. It also features a 50-meter wide boulevard, a 40-meter-wide Yangjing Creek meandering through, 7,000 m2 coast-themed sports and recreation area. Yanlord Riverside City is the culmination of Yanlord’s experience in developing fully-fitted residences. As one of the largest international communities in Shanghai, it now accommodates many senior expatriate business executives. Yanlord Riverside City has garnered several awards for its architectural design,
engineering,
landscaping,
decoration
finishing, etc. The widely acclaimed quality has made Yanlord Riverside City a market hit since its launch. To date it has ranked top in sales for residential developments in Shanghai for both 2007 and 2008.
28 YANLORDLAND 2008 ANNUAL REPORT
Jan.2008, Yanlord Riverside City won Golden Award for Quality Housing in Shanghai
Our Project Showcase
Yanlord Yangtze Riverside City
Yanlord Yangtze Riverside City
NANJING Yanlord Yangtze Riverside City Located along Yangtze River in Hexi New Area, Nanjing, Yanlord Yangtze Riverside City occupies a land area of approximately 346,900 square meters, which will be developed into a total GFA of approximately 688,000 square meters. The project is divided into four phases of which the construction of the first phase is presently undertaken.
29 YANLORDLAND 2008 ANNUAL REPORT
Our Project Showcase
Yanlord Landmark Yanlord Landmark is a key investment property project of Yanlord in Western China. Located at the heart of Chengdu CBD along major arterial roads, the project neighbours top-grade office buildings, five-star hotels and luxury department stores. It enjoys the most favorable location with the Metro Line No. 1 and other business resources in close vicinity. Yanlord Landmark has a planned GFA of approximately 166,800 m2 above ground and upon completion will incorporate office areas, serviced apartments, and a high-end shopping mall offering retail, conference, residence, and other business and recreation facilities. It is positioned to be the top-end property that represents the highest technical and service standards and will cater to the needs of MNCs who plan to locate their regional headquarters in Chengdu. Yanlord has engaged a world renowned architectural consultant as well as other renowned professional parties to contribute expertise to ensure that the project excels in all aspects ranging from engineering, landscaping to business operation; contributing to Chengdu’s integration into the global business arena. Work commenced in August 2006, Yanlord Landmark is expected to be completed in 2009 and enter full operation between 2009 and 2010. The office space of the project will meet the demand of international corporations in Chengdu with its high quality fittings and is expected to accommodate regional headquarters of big domestic and foreign companies. The serviced apartments in Yanlord Landmark, in collaboration with Fraser Hospitality from Singapore, will meet the demands of high-end business travelers, affording them with luxury and comfort during their stay in Chengdu. Yanlord Landmark will also be the epitome of the retail market of Chengdu, showcasing latest fashion of the city and the flagship stores of many international luxury brands.
30 YANLORDLAND 2008 ANNUAL REPORT
Yanlord Landmark
CHENGDU
Our Project Showcase
SUZHOU Yanlord Peninsula Yanlord Peninsula is Yanlord’s first project in Suzhou. Situated at 1818 Tongda Road, Yanlord Peninsula is a lakeside villa project in the high-end residential area of Suzhou in the vicinity of Jinji Lake and Dushu Lake. While benefiting from the serenity of the lakeside area, it is also conveniently connected to the old downtown Suzhou and Suzhou Industrial Park. Located on a peninsula protruding into the 11.52 km2 Dushu Lake, Yanlord Peninsula, comprises of 350 townhouses and duplexes, and has a total GFA of around 89,000 m2. The 1.5 km lake coast line, together with crossing canals, offers the project a panoramic view and unprecedented exclusivity. The architecture of the project draws inspiration from a coach house and seeks to provide customers with unique living experiences, and was ranked among the Top 10 Best Properties in the scenic city in 2007.
Yanlord Peninsula
31 YANLORDLAND 2008 ANNUAL REPORT
Our Project Showcase
Yanlord Riverside Plaza
TIANJIN Yanlord Riverside Plaza Yanlord Riverside Plaza represents Yanlord’s venture into the fast-growing Bohai Rim Region. Located in the traditional downtown area of Tianjin, Yanlord Riverside Plaza enjoys local commercial and historical resources. It is also connected to the city’s subway system. Yanlord Riverside Plaza occupies a land area of 95,000 m2 and has a total GFA of approximately 520,000 m2 of which approximately 340,000 m2 is above ground. The project is a modern building complex that incorporates residential apartment, hotel, office building and retail outlets. Adding a large-scale central complex and a pedestrian shopping street to the region, the office building in the northwest will also be the focal point of the project overlooking the Haihe River. Yanlord Riverside Plaza features various ecological initiatives that include a ground level green atrium. An underground green landscape will also be developed to provide perennial greenery to Tianjin. Yanlord Riverside Plaza, with multiple facets of commerce, recreation, and tourism, is set to be an iconic project in Tianjin.
32 YANLORDLAND 2008 ANNUAL REPORT
Yanlord Marina Centre
ZHUHAI Yanlord Marina Centre Yanlord Marina Centre, located along Qinglu Road (South) near the sea coast, is to be built into a landmark of Zhuhai City. Lying adjacent to Gongbei Customs Checkpoint to Macau, the project will enjoy easy access to the entrance of the planned Hong Kong-Zhuhai-Macau Bridge as well as the transport interchange of the light rail connecting Zhuhai and Guangzhou. Yanlord Marina Centre, upon completion, will be a showcase development of Zhuhai City. The total GFA of Yanlord Marina Centre will be 210,000 m2. Construction is expected to commence in 2009. The project comprises a 5star hotel, high-grade residence and retail shops. The group is in discussions with world-renowned hospitality groups to manage the hotel. The sea-view residential apartments and the shopping arcades are slated to be key highlights of Zhuhai’s future skyline.
33 YANLORDLAND 2008 ANNUAL REPORT
仁信治业
持之以恒
YANLORD LAND
Mr. Zhong Sheng Jian Chairman and CEO Mr. Zhong Sheng Jian is the founder, Chairman and CEO of Yanlord Land Group Limited and is responsible for its overall management and strategy development. His last re-election as director was on April 29, 2008. Since the 1980s, Mr. Zhong has founded and established a number of businesses in trading, manufacturing, real estate and financial services spanning China, Singapore, Hong Kong, Australia, Vietnam and Thailand. He started our property development business in the early 1990s through the setting up of our offices in Shanghai and Nanjing, which are now part of the SGX mainboard listed Yanlord Land Group Limited. Due to his investments in and contribution to various parts of China, Mr. Zhong has been awarded Honorary Citizenships in Nanjing, Zhuhai and Shanwei in the PRC. In 2005, he was also awarded the White Magnolia Award in Shanghai for his contributions to the Municipal City of Shanghai. Mr. Zhong is a member of several SingaporeChina investment and trade committees, including Singapore-Sichuan Trade and Investment Committee, Singapore-Tianjin Economic & Trade Council, Singapore-Jiangsu Cooperation Council and Network China. He is also a member of the Tianjin People’s Political Consultative Conference Standing Committee and was recently appointed as Chairman, International Affairs Committee of the Singapore Chinese Chamber of Commerce & Industry.
Board of Directors
34 YANLORDLAND 2008 ANNUAL REPORT
Mr. Zhong Siliang Executive Director Mr. Zhong Siliang is our executive director and was appointed as our director on May 11, 2006. His last re-election as director was on April 27, 2007. Since October 2005, he has held the position of assistant general manager of our Investments Department and in this capacity, Mr. Zhong Siliang assists in the evaluation of new business opportunities and conducts feasibility studies on potential property transactions for investments. He also visits potential and existing property sites to better understand market conditions for our investments. Mr. Zhong Siliang is responsible for establishing relations with architectural firms, real estate consultants and the district and national government officials, for the execution of our investments in the PRC. He also works closely with our CEO and Chairman, Mr. Zhong Sheng Jian, and assists in other group decisions. In addition, Mr Zhong Siliang assists in the overall management of Yanlord Land (Shenzhen) Co., Ltd. and is also the Deputy Director of our operations in the Group since 2007. Mr. Zhong Siliang graduated with a Bachelor Degree in Business Administration from University of Portsmouth, England in 2005.
Board of Directors
Mr. Hong Zhi Hua Executive Director
Ms. Chan Yiu Ling Executive Director
Ms. Chan Yiu Ling is our executive director and was appointed as our director on May 11, 2006. Her last re-election as director was on April 29, 2008. Since 1999, she has been assisting our Chairman and CEO, Mr. Zhong Sheng Jian, and is responsible for various administrative functions of our Group. Prior to that, she was the sales manager of Yanlord Industrial Ltd., where she managed its sales and marketing department for close to 10 years. Ms. Chan has approximately eight years of administration experience working as an administration executive in various companies before joining us. Ms. Chan graduated with a diploma from the Chinese YMCA Secretarial Course in 1982.
Mr. Hong Zhi Hua is our executive director and was appointed as our director on September 20, 2006. His last re-election as director was on April 27, 2007. Mr. Hong has also been our Executive Vice-President since May 2005 and is responsible for human resources, recruitment, and other corporate and administration matters. Prior to joining our Group, he was a director and CEO of Shanghai Hua Hong Investment Management Co., Ltd., assistant general manager of Shanghai Lujiazui Financial District Holdings and vice-president of Shanghai Waigaoqiao Free Zone Holdings. From 1992 to 1999, he was the Deputy Department Head of Shanghai Pudong New District Economics and Trade Commission and was responsible for boosting trade in the area and attracting investments. From 1985 to 1992, he was the honorary secretary for the Youth Division of the Shanghai Communications Bureau, where he was involved in the administration of the Youth Division and its related educational institute. Mr. Hong holds a doctorate in business administration from the University of South Australia and a Master’s degree in Business Administration from La Trobe University. In 1997, he graduated with a Bachelor’s degree in Business Administration from the Shanghai University, PRC.
35 YANLORDLAND 2008 ANNUAL REPORT
Board of Directors
Mr. Ronald Seah Lim Siang Lead Independent Director Mr. Ronald Seah Lim Siang is our lead independent director and was appointed to the Board on May 11, 2006. His last re-election as director was on April 29, 2008. Over a 25-year period between 1980 and 2005, he held various senior positions within the AIG Group in Singapore, initially as AIA Singapore’s Vice-President and Chief Investment Officer managing the investment portfolio of AIA Singapore and later as AIG Global Investment Corporation (Singapore) Ltd’s Vice President of Direct Investments. Between 2001 and 2005, Mr. Seah was also the Chairman of the Board of AIG Global Investment Corporation (Singapore) Ltd. From 1978 to 1980, Mr. Seah managed the investment portfolio of Post Office Savings Bank as Deputy Head of the Investment and Credit Department. Prior to that, he worked at Singapore Nomura Merchant Bank as an Assistant Manager with responsibilities covering the sale of bonds and securities and offshore (ACU) loan administration for the bank. Between 2002 and 2003, Mr. Seah served on the panel of experts of the Commercial Affairs Department of Singapore.
Mr. Seah graduated with a Bachelor of Arts and Social Sciences (second upper honors) from the then University of Singapore in 1975.
Mr. Ng Ser Miang Independent Director Mr. Ng Ser Miang is our independent director and was appointed as our director on May 11, 2006. His last reelection as director was on April 27, 2007. He has been the Chairman and founder of TIBS International Pte. Ltd. since 1981. He is also the Chairman of the National Trades Union Congress Choice Homes Co-operative Ltd. and NTUC Fairprice Cooperative Ltd. Mr. Ng has served and is serving as independent director on several public listed and private companies ranging from insurance, finance, venture capital, leisure industries and transport. Mr. Ng serves as the Chairman of Network China. He served as a member of the Asia Pacific Economic Cooperation (APEC) Business Advisory Committee (ABAC) from 2001 to September 2008. He is on the Resource Panel (Chinese Newspaper Division) of the Singapore Press Holdings Ltd. He was the Chairman of the Singapore Sports Council from 1991 to 2002. Mr. Ng was appointed a Justice of the Peace in September 2005 and was a Nominated Member of Parliament from June 2002 to January 2005. In 1999, he was also conferred the Public Service Star, a National Day Award, by the Singapore Government and awarded the Outstanding Chief Executive of the Year Award (Singapore Business Award) in 1992. Mr. Ng graduated with a Bachelor’s degree in Business Administration (honors) from the then University of Singapore and was also conferred a Fellow at the Chartered Institute of Transport (FCIT).
36 YANLORDLAND 2008 ANNUAL REPORT
Board of Directors
Ms. Ng Shin Ein Independent Director
Lieutenant-General (Retired) Ng Jui Ping Independent Director
Ms. Ng Shin Ein is our independent director and was appointed to the Board on May 11, 2006. Her last re-election as director was on April 27, 2007. She is the Regional Managing Director for Asia of Blue Ocean Associates Pte Ltd, a pan Asian firm focused on investing in and providing financing solutions to businesses. She is also in charge of the firm’s portfolio of European and U.S. Partners co-investing in Asia. Prior to this, Ms Ng was with the Singapore Exchange, where she was responsible for developing Singapore’s capital market by bringing foreign companies to list in Singapore. Additionally, she was part of the Singapore Exchange’s IPO Approval Committee, where she contributed industry perspectives to the committee, and also acted as a conduit between the marketplace and regulators. Ms Ng practiced as a corporate lawyer in Messrs Lee & Lee for a number of years where she advised on joint ventures, mergers and acquisitions and fund raising exercises. Ng Shin Ein also sits on the boards of NTUC Fairprice, and First Resources Limited, a listed palm oil company.
Lieutenant-General Ng Jui Ping (Retired) is our independent director and was appointed on September 20, 2006. His last re-election as director was on April 27, 2007. He leads his own consulting business and learning institute, August Asia Consulting Pte Ltd and Nanyang Institute of Management, respectively. He holds selective non-executive board positions including that of Independent Director on the board of SGX Mainboard-listed Pacific-Andes (Holdings) Limited. He is Advisor to Chesterton International Property Consultants Pte Ltd. General Ng has a distinguished 30-year military career that culminated with his appointment as the Chief of Defence Force, Singapore, from 1992 to 1995 and before that as the Chief of Army, Singapore, from 1990 to 1992. He was conferred a number of awards for distinguished service to Singapore, including the Meritorious Service Medal (Military) in 1995 and has been conferred prestigious awards by regional countries. . Upon retiring from his military career, General Ng chose to enter the private sector. The IT/Internet company he co-founded, Horizon Technologies Limited was listed on SGX Mainboard in Jan 2000 and he cashed-out in late 2004. Between 1995 and 2008, he held various positions including Deputy Chairman of the Central Provident Fund Board, Singapore; Director of the Port of Singapore Authority International (PSAI), the secondlargest Port Company in the World, and is Chairman of its China and North East Asia region. Chairman of Chartered Industries of Singapore Pte Ltd; Corporate Advisor, Singapore Technologies Pte Ltd; Corporate Advisor, Singapore Technologies Engineering Ltd; Chairman, Singapore Technologies Automotive Ltd and Chairman, Ordnance Development & Engineering of Singapore (1996) Pte Ltd. General Ng holds a Master of Arts degree in History from Duke University, USA and completed the Advanced Management Programme in Harvard Business School, Harvard University, USA. He is a keen golfer and is VicePresident of the Football Association of Singapore.
37 YANLORDLAND 2008 ANNUAL REPORT
仁信治业
持之以恒
YANLORD LAND
Key
Management Mr. Chen Yue has been our Executive Vice-President since April 2005 and is responsible for projects development. He has more than 10 years of management experience as the general manager of Yanlord Investment (Nanjing) Co., Ltd, managing our investments in Nanjing from 1994 to 2005. Prior to joining Yanlord, he was a manager of Lufeng City Finance and Commercial Trading Co., Ltd from 1992 to 1993. He was also the head of three other factories in Lufeng City from 1978 to 1991, namely the Lufeng City Erqing Agency Plastic Material Factory, Lufeng City Donghai Paper Factory and Lufeng City Donghai Glass Factory.
Ms. Tan Shook Yng has been our Group General Counsel and Company Secretary since 2006. She is responsible for our corporate planning and overseeing our legal and regulatory compliance functions. She has more than 10 years of experience as a lawyer practicing cross-border corporate, commercial and corporate finance laws, including areas of mergers and acquisitions, restructuring, initial public offerings, rights and bond issues, private placements, joint ventures, investment advice, stock exchange issues and employee share schemes. Prior to joining our Group, she was a partner of a leading Singapore law firm, co-heading its Greater China Practice Group. Ms. Tan’s prior work experience includes a position as the Senior Assistant Registrar of the Registry of Companies & Businesses of Singapore (now known as Accounting and Corporate Regulatory Authority of Singapore), and a senior associate with international law firm, Baker & McKenzie. She is an advocate and solicitor of the Supreme Court of Singapore and a member of the Singapore Academy of Law.
38 YANLORDLAND 2008 ANNUAL REPORT
Mr. Jim Chan Chi Wai has been our Group Financial Controller since 2003. He is responsible for our day-to-day finance and accounting functions and is also involved in the supervision of our finance staff. He has more than 10 years of experience as an auditor and accountant. Prior to joining our company, he was the financial controller of Komark Hong Kong Co., Ltd., a subsidiary of Komark Corp Berhad, a multinational company listed in Malaysia, for approximately two years. He was also a senior accountant at Cathay International Limited, a multinational company with investments in the United Kingdom and the PRC from 1997 to 2001 and senior audit accountant at Price Waterhouse Coopers from 1993 to 1997. Mr. Chan graduated with a Bachelor of Arts in Accountancy with Second Class Honors, Upper Division, from the City University of Hong Kong in 1993. He is a certified public accountant registered with the Hong Kong Institute of Certified Public Accountant and a fellow of the Association of Chartered Certified Accountants, Hong Kong.
Mr. Zhuang Hui Ping has been the General Manager of our Shanghai operations since 2005 and is responsible for the overall management of our business and properties in Shanghai. From 2004 to 2005, he was responsible for managing our real estate business in Suzhou as a general manager of Suzhou Zhonghui Property Development Co., Ltd. Prior to that, he was the assistant general manager of Yanlord Investment (Nanjing) Co., Ltd from 1996 to 2004. Between 1987 and 1999, he was the assistant general manager of Yanlord Industrial (Shenzhen) Co., Ltd and was also responsible for the sales and marketing policies of the business. Between 1995 and 1996, he was the assistant manager of Riverfront Jin Feng Trading Co., Ltd as an assistant manager. Mr Zhuang graduated from PLA Nanjing Institute of Politics with a Bachelor’s degree.
Key Management
Mr. Zhang Hao Ning has been the General Manager of our Nanjing operations since 2005 and is responsible for the overall management of our business in Nanjing. He was our assistant general manager between 2000 and 2005, and the manager of our operations department from 1994 to 2000. Prior to joining us, he worked as a cost engineer in the Architecture Design Institute, Nanjing and Hong Kong Changjiang Pte Ltd, Nanjing between 1990 and 1994, and was responsible for the management of their engineering budgets and was also involved in the design work of an architecture design institute. Mr. Zhang obtained a Master degree in Economics from the Nanjing University in the PRC in 1995. He is also a registered cost engineer with the Jiangsu Department of Personnel since 1998.
Mr. Xiao Zujun has been the General Manager of our operations in Suzhou since November 2006 and is responsible for the overall business in Suzhou. Prior to this, Mr. Xiao was the assistant general manager of our Suzhou company from 2004 to 2005. Between 2002 and 2004, Mr. Xiao was the general manager of our Chengdu business. In 1992, Mr. Xiao participated in the setting up of Guizhou Hanfang Group and assumed the position of the group’s vice general manager. In the same year, he helped set up Guizhou Hanfang Real Estate Development Company and took responsibilities as the company’s general manager. From 1983 to 1992, Mr. Xiao worked for the Personnel Department of Guizhou University. Mr. Xiao Zujun graduated from Guizhou University in 1983 with a Bachelor’s degree in History. Mr. Xiao qualified as a practicing lawyer in China since 1988.
Mr. Huang Zhong Xin has been the General Manager of our Chengdu operations since 2005 and is responsible for the overall management of our operations in Chengdu. Since 2002, he served as an assistant general manager and later the general manager of Yanlord Industrial (Chengdu) Co., Ltd. He was involved in the day to day operations of the company. Mr. Huang has been with the Yanlord group since 1989. He was first involved in the international trading business of Yanlord Holdings until 1993. Subsequently, he was the assistant general manager of Yanlord Industrial (Shenzhen) Co., Ltd and was responsible for setting up of industrial centres for two years. From 1994 to 2002, he was an assistant manager at Yanlord Investment (Nanjing) Co., Ltd and acting general manager of Yanlord Property Management Co., Ltd and was involved in the marketing, project planning and property management functions of these companies. He graduated with a Bachelor’s degree in Literature from Beijing Humanities Correspondence University in 1988.
Mr. Lam Ching Fung has been the General Manager of our Zhuhai operations since 2005 and is responsible for the overall management of our operations in Zhuhai. He was previously the director of the Zhuhai Special Economic Zone Longshi Bottle Capping Factory where he was responsible for the overall management of the business. Mr. Lam has completed an executive course in Advanced Business Management conducted by the Qinghua University, Zhuhai.
39 YANLORDLAND 2008 ANNUAL REPORT
Key Management
Mr. Dai Gang has been the general manager of our Shenzhen operations since February 2008 in addition to his responsibilities as our Group’s chief engineer and the vice general manager of our Shanghai subsidiary. Mr. Dai joined our Shanghai subsidiary in March 1993 and worked as an electric engineer to project manager, department manager, deputy chief engineer and vice general manager. Mr. Dai has been chairing the committee for fully-fitted apartments under the Residential Property Developers’ Union, Shanghai Federation of Industry & Commerce since October 2005. Mr. Dai graduated from Shanghai Textile Technology College and majored in Industrial Automation. Mr. Dai is a certified supervisory engineer.
Mr. Lin Jun Ting joined our Tianjin operations as Assistant General Manager in January 2004 and, since December 2008, has been responsible for the overall management of our Tianjin business. Prior to joining Yanlord, he served as director and general manager of Hong Kong Art and Decoration Co. Ltd., and as director and general manager at a catering management company in Canada. Mr. Lin graduated from LaSalle College of Montreal Canada in 1993 and majored in hotel management.
Mr. Lin Hai Tao has served as our Assistant General Manager of our operations in Guiyang since October 2007 and is responsible for the overall planning and management of our business in Guiyang. Prior to the transfer to our Guiyang office, he served as assistant general manager of our Shanghai Office since 2003. From 2001 to 2003, Mr. Lin worked in our Guiyang subsidiary as an assistant general manager. Before joining our company, Mr. Lin was the director and assistant general manager of Shanghai Kam Wan Real Estate Co., Ltd., overseeing its sales and administrative functions. Mr. Lin obtained a Master degree in Business Administration in Real Estate from Chongqing University in 2003.
40 YANLORDLAND 2008 ANNUAL REPORT
Mr. Chung Chiu Yan has been an Executive Director of one of our subsidiaries, Yanlord Investment (Nanjing) Co., Ltd. since 2004. Prior to joining us, he worked as an executive at Guangdong Province Lufeng Supplies Association for five years. Between 1980 and 1985, he worked at Guangdong Province Lufeng City West River Sanitisation Factory. He was a teacher at Guangdong Province Lufeng New Light Primary School from 1975 to 1980. Mr. Chung graduated from China Guangdong Province Lufeng Longshan High School in 1965.
Mr. Zheng Xi has been serving as the Vice-Chairman on the board of one of our subsidiaries, Yanlord Investment (Nanjing) Co., Ltd. since 1995 and is responsible for the day to day operations of the Group’s business in Nanjing. Prior to joining us, Mr. Zheng was the assistant general manager of Guangdong Province Shenzhen Yanlord Huayou Co., Ltd. for five years. Between 1969 and 1988, he was the deputy supervisor of Guangdong Province Lufeng Supplies Association. Mr. Zheng majored in business management in the Guangdong Province China Finance and Trade Management College and graduated in 1986.
Corporate Governance Statement Yanlord Land Group Limited (“Company” and its group of companies, “Group”) is committed to complying with the Code of Corporate Governance 2005 (“Code”) so as to safeguard the interests of the shareholders (“Shareholders”). This statement outlines the Company’s corporate governance processes and activities that were in place during the financial year. The Company aims to improve its corporate governance processes in line with the Code.
BOARD MATTERS Principle 1:
Board’s Conduct of Affairs
The principal functions of the board of directors of the Company (“Board”) include, among others, supervising the overall management and performance of the business and affairs of the Group and approving the Group’s corporate and strategic policies and direction. Matters which are specifically reserved for the Board’s approval include, among others, significant corporate matters and major undertakings. The Board dictates the strategic direction and management of the Company through quarterly reviews of the financial performance of the Group. To facilitate effective management, certain functions of the Board have been delegated to various Board’s committees, namely, the Audit Committee (“AC”), the Nominating Committee (“NC”), the Remuneration Committee (“RC”) and the Risk Management Committee (“RMC”) (collectively, “Board Committees”). The Company’s Articles of Association (“AA”) are sufficiently flexible to allow a Director to participate at a meeting via telephone, video conference or by means of similar communication equipment. In the course of the financial year under review, the number of meetings held and attended by each of the Board and Board Committees is as set out below: BOARD Meetings Directors
AC Meetings
NC Meetings
RC Meetings
RMC Meetings
Held* Attendance Held* Attendance Held* Attendance Held* Attendance Held* Attendance
Mr. Zhong Sheng Jian
6
6
–
–
1
1
–
–
1
1
Mr. Zhong Siliang
6
6
–
–
–
–
–
–
–
–
Ms. Chan Yiu Ling
6
6
–
–
–
–
–
–
–
–
Mr. Hong Zhi Hua
6
6
–
–
–
–
–
–
–
–
Mr. Ronald Seah Lim Siang
6
6
4
4
1
1
1
1
–
–
Mr. Ng Ser Miang
6
4
–
–
1
1
–
–
1
0
Ms. Ng Shin Ein
6
6
4
4
–
–
1
1
1
1
Lt-Gen (Ret) Ng Jui Ping
6
6
4
4
–
–
1
1
1
1
Notes: *:
Reflects the number of meetings held during the time that the director held office.
-:
Indicates that the director was not a member of that committee during the year.
New directors, upon appointment, are given information on the Group’s business, structure and corporate and strategic direction. The directors are also encouraged to visit the development sites of the Group as and when time permits, and to receive further relevant briefings, particularly on relevant new laws and regulations, from time to time, if necessary.
41
YANLORDLAND 2008 ANNUAL REPORT
Corporate Governance Statement Principle 2:
Board Composition and Guidance
The Board comprises: 1.
Mr. Zhong Sheng Jian:
Chairman and Chief Executive Officer
2.
Mr. Zhong Siliang:
Executive Director
3.
Ms. Chan Yiu Ling:
Executive Director
4.
Mr. Hong Zhi Hua:
Executive Director
5.
Mr. Ronald Seah Lim Siang:
Lead Independent Director
6.
Mr. Ng Ser Miang:
Independent Director
7.
Ms. Ng Shin Ein:
Independent Director
8.
Lt-Gen (Ret) Ng Jui Ping:
Independent Director
There is a strong and independent element on the Board, with independent directors making up half of the Board. The Board believes that the size and composition of the Board, their experience and core competencies in various fields are appropriate and effective, taking into consideration the scope and nature of operations of the Company. Principle 3:
Chairman and Chief Executive Officer
Mr. Zhong Sheng Jian currently fulfills the role of Chief Executive Officer (“CEO”) and Chairman of the Board (“Chairman”). The Board has not adopted the recommendation of the Code to have separate directors appointed as the Chairman and the CEO. This is because the Board is of the view that there is a sufficiently strong independent element on the Board to enable independent exercise of objective judgement on the corporate affairs of the Group. Pursuant to the recommendation in the Code, the Company has also appointed Mr. Ronald Seah Lim Siang as its lead independent director. The Chairman, Mr. Zhong Sheng Jian is responsible for, among others, exercising control over the quality, quantity and timeliness of the flow of information between the management of the Company (“Management”) and the Board, and assisting in ensuring compliance with the Company’s guidelines on corporate governance. Principle 4: Principle 5:
Board Membership Board Performance
Nominating Committee (“NC”) The NC makes recommendations to the Board on all board appointments. The majority of the members of the NC, including its chairman, are independent. The chairman of the NC is Mr. Ng Ser Miang who is not directly associated with a substantial shareholder as prescribed in the Code. The other 2 members are Mr. Zhong Sheng Jian and Mr. Ronald Seah Lim Siang. The NC is guided by its terms of reference which set out its responsibilities. The NC will be responsible for: (a)
reviewing and recommending the nomination and re-election of our directors having regard to the director’s contribution and performance;
42
YANLORDLAND 2008 ANNUAL REPORT
Corporate Governance Statement (b)
determining on an annual basis whether or not a director is independent; and
(c)
assessing the performance of our Board and contribution of each director to the effectiveness of the Board.
New directors are appointed by the Board after taking into consideration the recommendation made by the NC of such Board appointments. The AA of the Company requires new directors appointed during the year to submit themselves for re-election at the next Annual General Meeting (“AGM”) of the Company. The AA also requires one-third of the Board to retire by rotation at every AGM. This means that no director may stay in office for more than three years without being re-elected by shareholders. The Company has in place a system to assess the performance of the Board as a whole and the contribution of each director to the effectiveness of the Board (“Performance Assessment”). The results of the Performance Assessment were reviewed by the NC and circulated to the Board for consideration thereafter. The NC, in considering the re-appointment of any director, evaluates the performance of the director. The assessment parameters include attendance record at meetings of the Board and Board Committees, intensity of participation at meetings and the quality of interventions. The Board adopts the independence test recommended by the Code. Taking into account the independence test, the NC considers and determines the independence of directors. Key information regarding the directors is set out in this Annual Report under the heading entitled “Board of Directors”. Principle 6:
Access to Information
The Board was provided with financial information, as well as relevant background information and documents relating to items of business to be discussed at Board meetings prior to the scheduled meetings. The directors may (whether individually or as a group), in the furtherance of their duties, take independent professional advice (e.g. auditors), if necessary, at the Company’s expense. The Board has separate and independent access to the Company’s Management and Company Secretary at all times. The Company Secretary attends all Board and Board Committees meetings. The role of the Company Secretary includes responsibility for ensuring that Board procedures are followed and applicable rules and regulations are complied with. Under the direction of the Chairman, the Company Secretary also ensures good information flows within the Board and its Board Committees and between the Management and independent directors.
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YANLORDLAND 2008 ANNUAL REPORT
Corporate Governance Statement REMUNERATION MATTERS Principle 7: Principle 8: Principle 9:
Procedure for Developing Remuneration Policies Level and Mix of Remuneration Disclosure of Remuneration
Remuneration Committee (“RC”) The RC comprises 3 members, all of whom are independent directors. The chairman of the RC is Lt-Gen (Ret) Ng Jui Ping and the other 2 members are Mr. Ronald Seah Lim Siang and Ms. Ng Shin Ein. The RC is guided by its terms of reference, which set out its responsibilities. The RC recommends to our Board, a framework of remuneration for the directors and reviews the remuneration packages of the executive directors. The recommendations of our RC are submitted for endorsement by the Board. All aspects of remuneration, including but not limited to directors’ fees, salaries, allowances, bonuses and benefits in kind are reviewed by our RC. The RC also reviews the remuneration of senior management and administers the Company’s Share Option Scheme 2006. No director or member of the RC has been involved in deciding his own remuneration package. The total remuneration mix for the CEO, executive directors, executive officers and key employees of the Group comprises three key components, namely, basic salary, annual performance incentive and other benefits including benefitsin-kind. Save for directors’ fees, which have to be approved by the Shareholders at every AGM, the independent directors do not receive any remuneration from the Company. The remuneration (which includes basic salaries, annual performance incentive, directors’ fees and other benefits including benefits-in-kind) paid or payable to each of our directors, executive officers and other key employees as at 31 December 2008 based on their respective employment periods served in FY2008, in bands of S$250,000, are as follows: (1)
Remuneration of Directors for FY2008
Remuneration Bands
Annual Performance Basic Salary Incentive
Directors’ Fees
Other benefits including benefits in kind
Total
S$3,500,000 to S$3,749,999 Zhong Sheng Jian
7%
91%
0
2%
100%
Chan Yiu Ling
74%
26%
0
0
100%
Hong Zhi Hua
74%
26%
0
0
100%
Zhong Siliang
79%
21%
0
0
100%
Ronald Seah Lim Siang
0
0
100%
0
100%
Ng Ser Miang
0
0
100%
0
100%
Ng Shin Ein
0
0
100%
0
100%
Ng Jui Ping
0
0
100%
0
100%
Below S$250,000
44
YANLORDLAND 2008 ANNUAL REPORT
Corporate Governance Statement (2)
Remuneration of Executive Officers and Other Key Employees (who are not also directors) for FY2008
Remuneration Bands
No. of Executive Officers and Key Employees
S$250,000 to S$499,999
5
Below S$250,000
10
Total:
15
The Group’s executive officers and other key employees’ remuneration are presented by number of employees in the bands of S$250,000 as set out above. This gives a macro perspective of the remuneration pattern of the executive officers and key employees while maintaining confidentiality of staff remuneration matters. (3)
Employees who are immediate family members (i.e. spouse, child, adopted child, step-child, brother, sister and parent) of a director or the CEO, and whose remuneration exceed S$150,000 during the year. Two key employees whose remuneration exceeds S$150,000 during FY2008 are related to our Chairman and CEO, Mr. Zhong Sheng Jian and our Executive Director, Mr. Zhong Siliang. The remuneration of both key employees are within the remuneration band of below S$250,000 each.
The Company has the following share option schemes: (1)
Yanlord Land Group Pre-IPO Share Option Scheme; and
(2)
Yanlord Land Group Share Option Scheme 2006 (collectively, the “Schemes”).
Details of the Schemes are set out in the Report of the Directors.
ACCOUNTABILITY AND AUDIT Principle 10:
Accountability
The Board understands its accountability to the shareholders for the Group’s performance, and Management understands its role in providing all members of the Board with financial accounts and information, which present a balanced and comprehensive assessment of the Group’s performance, financial position and prospects on a regular basis. The Management is accountable to the Board and presents to the Board, quarterly and full-year financial results after the same are reviewed by the Audit Committee. The Board reviews and approves the results and authorises the release of results to the public via SGXNET.
45
YANLORDLAND 2008 ANNUAL REPORT
Corporate Governance Statement Principle 11:
Audit Committee (“AC”)
The AC comprises 3 independent directors. The chairman of the AC is Mr. Ronald Seah Lim Siang and the other 2 members are Ms. Ng Shin Ein and Lt-Gen (Ret) Ng Jui Ping. The AC is guided by its terms of reference which set out its responsibilities. Our AC will assist our Board in discharging its responsibility to safeguard our assets, maintain adequate accounting records, develop and maintain effective systems of internal control, with the overall objective of ensuring that the Management creates and maintains an effective control environment in our Group. Our AC will provide a channel of communication between the Board, the Management and our external auditors on matters relating to audit. Our AC will meet periodically to perform the following functions: (a)
review with the external auditors and where applicable, our internal auditors, their audit plans, their evaluation of the system of internal accounting controls, their letters to Management and the Management’s response;
(b)
review quarterly and annual financial results announcements before submission to the Board for approval, focusing in particular on changes in accounting policies and practices, major risk areas, significant adjustments resulting from the audit, compliance with accounting standards and compliance with the SGXST Listing Manual and any other relevant statutory or regulatory requirements;
(c)
review the internal control procedures and ensure co-ordination between the external auditors and the Management, and review the assistance given by the Management to the auditors, and discuss problems and concerns, if any, arising from audits, and any matters which the auditors may wish to discuss (in the absence of the Management, where necessary);
(d)
review and discuss with the external auditors any suspected fraud or irregularity, or suspected infringement of any relevant laws, rules or regulations, which has or is likely to have a material impact on our operating results or financial position, and the Management’s response;
(e)
consider and recommend the appointment or re-appointment of the external auditors and matters relating to the resignation or dismissal of the auditors;
(f)
review interested person transactions (if any) falling within the scope of Chapter 9 of the Listing Manual;
(g)
review potential conflicts of interest, if any;
(h)
undertake such other reviews and projects as may be requested by the Board, and report to the Board its findings from time to time on matters arising and requiring the attention of our AC; and
(i)
generally undertake such other functions and duties as may be required by statute or the SGX-ST Listing Manual, or by such amendments as may be made thereto from time to time.
46
YANLORDLAND 2008 ANNUAL REPORT
Corporate Governance Statement Our AC meets, at a minimum, on a quarterly basis. In the event that a member of the AC is interested in any matter being considered by the AC, he will abstain from reviewing that particular transaction or voting on that particular resolution. If necessary, the AC also meets with the internal and external auditors without the presence of Management. The internal and external auditors have unrestricted access to the AC and vice versa. The AC has been given full access to and co-operation of the Management and has reasonable resources to enable it to discharge its function properly. The AC, having reviewed all non-audit services provided by the external auditors to the Group in FY2008, is satisfied that the nature and extent of such services would not affect the independence of the external auditors. Principle 12:
Internal Controls
The Board is responsible for the Company’s internal control measures to safeguard shareholders’ investments. The internal controls are intended to provide reasonable but not absolute assurance against material misstatements or losses and include the safeguarding of assets, the maintenance of proper accounting records, the reliability of financial information, compliance with appropriate legislations, regulations and best practices, and the identification and containment of business risks.
Risk Management Committee (“RMC”) The RMC comprises 4 members. The chairman of the RMC is Ms. Ng Shin Ein and the other 3 members are Mr. Zhong Sheng Jian, Mr. Ng Ser Miang and Lt-Gen (Ret) Ng Jui Ping. The RMC is guided by its terms of reference which set out its responsibilities including: (a)
identifying, measuring, managing and controlling risks that may have a significant impact on our property development activities;
(b)
reviewing and assessing our risk related policies and methodologies; and
(c)
considering and reviewing matters that may have a significant impact on the stability and integrity of the property market in China.
The Board and AC are satisfied that there are adequate internal controls in the Company. Principle 13:
Internal Audit
The Group has an in-house internal audit function (“Internal Audit”) that is independent of the activities it audits. The Internal Audit reports directly to the AC chairman, and administratively to the Chairman and CEO. The key role of the Internal Audit is to promote effective internal control in the Group and to monitor the performance and effective application of internal audit procedures. The Internal Audit is expected to meet the standard set by internationally recognised professional bodies including the Standards for the Professional Practice of Internal Auditing set by The Institute of Internal Auditors. The AC is satisfied that the Company’s internal audit function is adequately resourced.
47
YANLORDLAND 2008 ANNUAL REPORT
Corporate Governance Statement COMMUNICATION WITH SHAREHOLDERS Principles 14 & 15:
Communication with Shareholders
In line with continuous disclosure obligations of the Company, the Board’s policy is that shareholders be informed promptly of any major development that may have a material impact on the Group’s performance. Information is communicated to shareholders on a timely basis, through annual reports that are to be issued to all shareholders within the mandatory period, quarterly financial statements announcements, press releases and other relevant announcements via SGXNET. The Company does not practice selective disclosure. The Company operates its corporate website at www.yanlordland.com through which shareholders will be able to access updated information on the Group. The website provides corporate announcements, press releases and other information of the Group. At the AGM, shareholders will be given the opportunity to express their views and make enquiries regarding the business and operations of the Group. Separate resolutions are proposed for substantially separate issues at the AGM.
DEALINGS IN SECURITIES The Company has adopted and implemented an internal compliance code to provide guidance to its Directors and key employees in relation to the dealings in its securities issued by the SGX-ST. Directors and key employees who have access to material price sensitive information are prohibited from dealing in securities of the Company prior to the announcement of a matter that involves material unpublished price sensitive information. They are also prohibited from dealing in the Company’s securities one month prior to the announcement of the Company’s half year and full year financial results and 14 days before the announcement of the Company’s first quarter and third quarter financial results.
48
YANLORDLAND 2008 ANNUAL REPORT
Report of the Directors The directors present their report together with the audited consolidated financial statements of the Group and the balance sheet and statement of changes in equity of the Company for the financial year ended December 31, 2008.
1
DIRECTORS The directors of the Company in office at the date of this report are: Zhong Sheng Jian Zhong Siliang Chan Yiu Ling Hong Zhi Hua Ronald Seah Lim Siang Ng Ser Miang Ng Shin Ein Ng Jui Ping
2
ARRANGEMENTS TO ENABLE DIRECTORS TO ACQUIRE BENEFITS BY MEANS OF THE ACQUISITION OF SHARES AND DEBENTURES Neither at the end of the financial year nor at any time during the financial year did there subsist any arrangement whose object is to enable the directors of the Company to acquire benefits by means of the acquisition of shares or debentures in the Company or any other body corporate, except for the options mentioned in paragraph 5 of the Report of the Directors.
49
YANLORDLAND 2008 ANNUAL REPORT
Report of the Directors 3
DIRECTORS’ INTERESTS IN SHARES AND DEBENTURES The directors of the Company holding office at the end of the financial year had no interests in the share capital and debentures of the Company and related corporations as recorded in the register of directors’ shareholdings kept by the Company under Section 164 of the Singapore Companies Act (“Act”) except as follows: Holdings registered in the name of directors Name of directors and companies in which interests are held
At beginning of year
At end of year
1,987,000
1,987,000
Holdings in which directors are deemed to have an interest At beginning of year
At end of year
The Company a.
Ordinary shares Zhong Sheng Jian(1) Zhong Siliang
20,000
20,000
–
–
(2)
20,000
20,000
5,000
5,000
(3)
310,000
310,000
–
–
Chan Yiu Ling Hong Zhi Hua
Ronald Seah Lim Siang
50,000
50,000
–
–
200,000
300,000
–
–
38,000
38,000
–
–
Ng Ser Miang
–
500
–
–
Ng Shin Ein
–
250
–
–
Ng Ser Miang Ng Shin Ein b.
1,271,000,000 1,277,514,000
Convertible notes due 2012 (S$’000)
(1)
Zhong Sheng Jian is deemed to be interested in 1,277,514,000 ordinary shares in the Company held by Yanlord Holdings Pte. Ltd. (“YHPL”). YHPL is a company which is owned by Zhong Sheng Jian (95% shareholding interest) and his spouse (5% shareholding interest).
(2)
5,000 shares in the Company held by the spouse of Chan Yiu Ling.
(3)
Interest held via nominee account.
50
YANLORDLAND 2008 ANNUAL REPORT
Report of the Directors 3
DIRECTORS’ INTERESTS IN SHARES AND DEBENTURES (Cont’d) The directors’ beneficial interest in other related corporations’ shares and debentures were as follows: Holdings registered in the name of directors Name of directors and companies in which interests are held
Holdings in which directors are deemed to have an interest
At beginning of year
At end of year
At beginning of year
At end of year
95,000,000
95,000,000
5,000,000
5,000,000
–
–
1
1
–
–
1
1
Immediate holding company Yanlord Holdings Pte. Ltd. (Ordinary shares) Zhong Sheng Jian Related corporations (i)
Yanlord Capital Pte. Ltd. (Ordinary shares) Zhong Sheng Jian
(ii)
Yanlord Industries Pte. Ltd. (Ordinary shares) Zhong Sheng Jian
By virtue of Section 7 of the Singapore Companies Act, Zhong Sheng Jian is deemed to have an interest in the Company and all the related corporations of the Company. The directors’ interest in the shares and convertible notes of the Company as at January 21, 2009 were the same as at December 31, 2008.
4
DIRECTORS’ RECEIPT AND ENTITLEMENT TO CONTRACTUAL BENEFITS Except as disclosed in the financial statements, since the beginning of the financial year, no director has received or become entitled to receive a benefit which is required to be disclosed under Section 201(8) of the Act, 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 other than salaries, bonuses and other benefits. Certain directors received remuneration from related corporations in their capacity as directors and/or executives of those related corporations.
51
YANLORDLAND 2008 ANNUAL REPORT
Report of the Directors 5
SHARE OPTIONS AND CONVERTIBLE NOTES
5.1
Yanlord Land Group Pre-IPO Share Option Scheme (“Pre-IPO ESOS”) (a)
On June 21, 2006, the options to subscribe for an aggregate of 14,592,000 ordinary shares in the capital of the Company pursuant to the Pre-IPO ESOS were duly granted. The Pre-IPO ESOS is non-recurring and there will be no further issue of any options under this Scheme. The options under the Pre-IPO ESOS grant the right to the holder to subscribe for new ordinary shares of the Company at a discount of fifteen percent (15%) of the IPO offer share price of $1.08. The options granted under the Pre-IPO ESOS will be exercisable after the second anniversary of the date of grant of the options and all options must be exercised before the fifth anniversary from the date of grant of the options. Each option grants the holder the right to subscribe for one ordinary share in the Company. The options may be exercised in full or in part thereof. The Pre-IPO ESOS is administered by the Pre-IPO Share Option Management Committee (the “PreIPO ESOS Committee”) comprising the following members: Zhong Sheng Jian Zhong Siliang Chan Yiu Ling Ronald Seah Lim Siang
Chairman and Chief Executive Officer Executive Director Executive Director Lead Independent Director
In exercising its discretion, the Pre-IPO ESOS Committee must act in accordance with any guidelines that may be provided by the Board of Directors. (b)
(c)
The details of the movement of the options granted under the Pre-IPO ESOS during the financial year are set out below:
Date of grant
Balance at beginning of year
Granted
Exercised
June 21, 2006
13,032,000
–
(5,520,000)
Lapsed
Exercise period
(110,000)
7,402,000
June 22, 2008 to June 20, 2011
$0.92
The details of share options granted under the Pre-IPO ESOS to the directors of the Company are as follows:
Options granted during the year
Aggregate options granted since commencement of Pre–IPO ESOS up to end of year
Aggregate options lapsed since commencement of Pre–IPO ESOS up to end of year
Aggregate options outstanding as at end of year
Chan Yiu Ling
–
700,000
–
700,000
Hong Zhi Hua
–
300,000
–
300,000
Zhong Siliang
–
300,000
–
300,000
Directors
52
Exercise price per share
Balance at end of year
YANLORDLAND 2008 ANNUAL REPORT
Report of the Directors 5
SHARE OPTIONS AND CONVERTIBLE NOTES (Cont’d)
5.1
Yanlord Land Group Pre-IPO Share Option Scheme (“Pre-IPO ESOS”) (Cont’d) The directors’ interest in the options of the Company as at January 21, 2009 were the same as at December 31, 2008. (d)
5.2
During the financial year, (i)
no participant to the Pre-IPO ESOS is a controlling shareholder of the Company nor its associates; and
(ii)
save as disclosed above, no participant to the Pre-IPO ESOS received options which represent 5% or more of the total number of options available under the Pre-IPO ESOS.
Yanlord Land Group Share Option Scheme 2006 (“ESOS 2006”) The ESOS 2006 will provide eligible participants with the opportunity to participate in the equity of the Company and motivate them towards better performance through increased dedication and loyalty. The aggregate number of shares that may be issued or issuable under the plan at any time may not exceed 15% of the then issued share capital. The Remuneration Committee (“RC”) comprises 3 independent directors, and they are Ng Jui Ping, Ronald Seah Lim Siang and Ng Shin Ein. The RC administers the ESOS 2006. Options may be granted to employees and directors of the Company or any of the related entities, which include the subsidiaries or any entities in which the Company holds a substantial ownership interest, including any such employees or directors who are associates of the controlling shareholder. The controlling shareholder is not eligible to participate in the ESOS 2006. In general, the plan administrator determines the exercise price of an option. The exercise price may be a fixed or variable price related to the fair market value of the ordinary shares. The term of each award will be stated in the award agreement. The term of an award will not exceed 10 years from the date of the grant, or five years from the date of grant in the case of options granted to non-executive directors or employees of related entities other than subsidiaries. In general, the plan administrator determines, or the award agreement specifies, the vesting schedule. The Board of Directors may at any time amend, suspend or terminate the ESOS 2006. Amendments to the plan are subject to shareholder approval to the extent required by law, or stock exchange rules or regulations. Additionally, shareholder approval is specifically required to increase the number of shares available for issuance under the plan or to extend the term of an option beyond 10 years. Unless terminated earlier, the plan will expire and no further awards may be granted after the tenth anniversary of the shareholder’s approval of the plan. This scheme will continue to be in force at the discretion of the RC subject to a maximum period of 10 years commencing on the date the ESOS 2006 was adopted by the Company in general meeting. However, ESOS 2006 may continue beyond the above stipulated period with the approval of shareholders by ordinary resolution in general meeting and of any relevant authorities that may then be required. During the financial year, no option was granted under the ESOS 2006.
53
YANLORDLAND 2008 ANNUAL REPORT
Report of the Directors 5
SHARE OPTIONS AND CONVERTIBLE NOTES (Cont’d)
5.3
Convertible Notes In 2007, the Company issued convertible notes as disclosed in Note 20 to the financial statements.
6
OPTIONS EXERCISED During the financial year, 5,520,000 shares were issued pursuant to the exercise of options granted under the Pre-IPO ESOS. Save as disclosed above, no share of the Company or any corporation in the Group was allotted and issued by virtue of the exercise of options to take up unissued shares of the Company or any corporation in the Group.
7
UNISSUED SHARES UNDER OPTIONS Save as disclosed above, there was no option granted by the Company or any corporation in the Group to any person to take up unissued shares of the Company or any corporation in the Group as at the end of the financial year.
8
AUDIT COMMITTEE At the date of this report, the Audit Committee comprises the following members: Ronald Seah Lim Siang Ng Jui Ping Ng Shin Ein
Chairman and Lead Independent Director Independent Director Independent Director
The Audit Committee carried out its functions in accordance with Section 201B(5) of the Singapore Companies Act, Cap. 50. The functions performed are detailed in the Corporate Governance Report. The Audit Committee has recommended to the directors the nomination of Deloitte & Touche LLP for reappointment as external auditors of the Group at the forthcoming Annual General Meeting of the Company.
54
YANLORDLAND 2008 ANNUAL REPORT
Report of the Directors 9
AUDITORS The auditors, Deloitte & Touche LLP, have expressed their willingness to accept re-appointment.
ON BEHALF OF THE DIRECTORS
Zhong Sheng Jian
Chan Yiu Ling
March 27, 2009
55
YANLORDLAND 2008 ANNUAL REPORT
Independent Auditors’ Report To the Members of Yanlord Land Group Limited We have audited the accompanying financial statements of Yanlord Land Group Limited (the Company) and its subsidiaries (the Group) which comprise the balance sheets of the Group and the Company as at December 31, 2008, the profit and loss statement, statement of changes in equity and cash flow statement of the Group and the statement of changes in equity of the Company for the year then ended, and a summary of significant accounting policies and other explanatory notes, as set out on pages 58 to 113.
Management’s Responsibility 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: devising and maintaining a system of internal accounting controls sufficient to provide a reasonable assurance that assets are safeguarded against loss from unauthorised use or disposition; and transactions are properly authorised and that they are recorded as necessary to permit the preparation of true and fair profit and loss statement and balance sheets and to maintain accountability of assets; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances.
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 whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation 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 control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion In our opinion, (a)
the consolidated financial statements of the Group and the balance sheet and statement of changes in equity of the Company are properly drawn up in accordance with the provisions of the Act and Singapore Financial Reporting Standards so as to give a true and fair view of the state of affairs of the Group and of the Company as at December 31, 2008 and of the results, changes in equity and cash flows of the Group and changes in equity of the Company for the year ended on that date; and
56
YANLORDLAND 2008 ANNUAL REPORT
Independent Auditors’ Report To the Members of Yanlord Land Group Limited (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.
Deloitte & Touche LLP Public Accountants and Certified Public Accountants
Singapore March 27, 2009
57
YANLORDLAND 2008 ANNUAL REPORT
Balance Sheets December 31, 2008
GROUP Note
2008 $’000
COMPANY 2007 $’000
2008 $’000
2007 $’000
ASSETS Non-current assets Property, plant and equipment
7
39,078
28,669
–
–
Investment properties
8
347,324
219,901
–
–
Properties for development
9
2,150,667
1,443,124
–
–
Investments in subsidiaries
10
–
–
515,319
515,319
Available-for-sale investments
11
10,445
52,384
–
–
Intangible asset
12
128
–
–
–
Deferred tax assets
13
5,637
6,849
–
–
2,553,279
1,750,927
515,319
515,319
477
3,261
–
–
Total non-current assets Current assets Inventories Completed properties for sale
9
506,244
117,484
–
–
Properties under development for sale
9
1,246,708
1,067,147
–
–
1,547
449
–
–
14
41,923
51,496
–
588
Subsidiaries
5
–
–
1,352,640
1,195,969
Minority shareholders of subsidiaries
15
83,808
83,718
–
–
Other related party
6
80
80
–
–
Held-for-trading investments
16
1,101
3,323
–
–
Pledged bank deposits
17
8,272
3,155
–
–
Cash and bank balances
17
375,741
702,857
380
93,459
Total current assets
2,265,901
2,032,970
1,353,020
1,290,016
Total assets
4,819,180
3,783,897
1,868,339
1,805,335
Trade receivables Other receivables and deposits Non-trade amounts due from:
58
YANLORDLAND 2008 ANNUAL REPORT
Balance Sheets December 31, 2008
GROUP
COMPANY
Note
2008 $’000
2007 $’000
2008 $’000
2007 $’000
18
1,226,168
1,219,081
1,226,168
1,219,081
643,157
316,111
35,093
(4,149)
1,869,325
1,535,192
1,261,261
1,214,932
461,051
454,607
–
–
2,330,376
1,989,799
1,261,261
1,214,932
EQUITY AND LIABILITIES Capital and reserves Share capital Reserves Equity attributable to equity holders of the Company Minority interests Total capital and reserves Non-current liabilities Bank loans – due after one year
19
829,366
525,940
–
–
Convertible notes
20
323,562
299,195
323,562
299,195
Deferred tax liabilities
13
46,640
23,926
–
–
15
69,564
–
–
–
1,269,132
849,061
323,562
299,195
Non-trade amount due to: A minority shareholder of a subsidiary Total non-current liabilities Current liabilities Trade payables
21
335,511
311,565
–
–
Other payables
22
223,790
275,395
463
794
A subsidiary
5
–
–
271,538
287,434
Directors
6
7,186
8,611
7,045
2,980
A shareholder
6
4,470
10
4,470
–
Minority shareholders of subsidiaries
15
3,984
36,962
–
–
Other related party
6
1
18
–
–
297,391
165,408
–
–
347,339
147,068
–
–
Total current liabilities
1,219,672
945,037
283,516
291,208
Total equity and liabilities
4,819,180
3,783,897
1,868,339
1,805,335
Non-trade amounts due to:
Income tax payable Bank loans – due within one year
19
See accompanying notes to financial statements.
59
YANLORDLAND 2008 ANNUAL REPORT
Consolidated Profit and Loss Statement Financial year ended December 31, 2008
GROUP Note
2008 $’000
2007 $’000
23
1,007,217
1,227,932
Cost of sales
(447,749)
(674,636)
Gross profit
559,468
553,296
112,414
83,869
Selling expenses
(20,469)
(17,595)
Administrative expenses
(61,131)
(65,352)
(4,660)
(1,276)
(4,739)
(15,351)
580,883
537,591
Revenue
Other operating income
24
Other operating expenses Finance cost
25
Profit before income tax Income tax
26
(266,927)
(200,887)
Profit for the year
27
313,956
336,704
225,841
221,500
88,115
115,204
313,956
336,704
– Basic
12.35
12.52
– Diluted
11.66
12.13
Attributable to: Equity holders of the Company Minority interests
Earnings per share (cents)
See accompanying notes to financial statements.
60
YANLORDLAND 2008 ANNUAL REPORT
28
Statements of Changes in Equity Financial year ended December 31, 2008
Note
Share capital $’000
Currency Merger translation Equity Statutory reserve reserve reserve reserves (deficit) $’000 $’000 $’000 $’000
Attributable to equity Other Accumulated holders of Minority reserve profits the Company interests $’000 $’000 $’000 $’000
Total $’000
GROUP Balance at January 1, 2007
780,175
(55,884)
1,265
Acquisition of additional interest in a subsidiary
–
–
–
–
Currency translation difference
–
39,571 (386,571)
–
531,286
909,842
153,178 1,063,020
–
(48,628)
–
(48,628)
–
(48,628)
–
–
–
–
15,401
9,499
24,900
–
15,401
Net income/expense recognised directly in equity
–
15,401
–
–
–
(48,628)
–
(33,227)
9,499
(23,728)
Net profit for the year
–
–
–
–
–
–
221,500
221,500
115,204
336,704
Total recognised income and expenses for the year
–
15,401
–
–
–
(48,628)
221,500
188,273
124,703
312,976
Issuance of shares pursuant to international offerings exercise, net of expenses (Note A)
299,213
–
–
–
–
–
–
299,213
–
299,213
Conversion of convertible notes
139,693
–
(19,381)
–
–
–
–
120,312
–
120,312
–
–
66,546
–
–
–
–
66,546
–
66,546
–
–
2,290
–
–
–
–
2,290
–
2,290
–
–
–
–
–
–
–
–
37
37
–
–
–
–
–
–
–
–
401
401
–
–
–
–
–
–
–
–
247,954
247,954
–
–
–
–
–
–
(51,284)
(51,284)
–
(51,284)
Dividends paid to minority shareholders
–
–
–
–
–
–
–
–
(71,666)
(71,666)
Appropriations
–
–
–
3,571
–
–
(3,571)
–
–
–
1,219,081
(40,483)
50,720
43,142 (386,571)
(48,628)
697,931
1,535,192
Recognition of equity component of convertible notes, net of expenses (Note A) Recognition of equity-settled sharebased payments
32
Change of interest in a subsidiary Acquisition of subsidiaries
31
Cash injection by a minority shareholder Dividends
Balance at December 31, 2007
29
454,607 1,989,799
61
YANLORDLAND 2008 ANNUAL REPORT
Statements of Changes in Equity Financial year ended December 31, 2008
Note
Balance at January 1, 2008
Currency Merger translation Equity Statutory reserve reserve reserve reserves (deficit) $’000 $’000 $’000 $’000
Share capital $’000
Attributable to equity Other Accumulated holders of Minority reserve profits the Company interests $’000 $’000 $’000 $’000
Total $’000
1,219,081
(40,483)
50,720
43,142
(386,571)
(48,628)
697,931
1,535,192
454,607
1,989,799
Currency translation difference
–
124,158
–
–
–
–
–
124,158
27,011
151,169
Net income recognised directly in equity
–
124,158
–
–
–
–
–
124,158
27,011
151,169
Net profit for the year
–
–
–
–
–
–
225,841
225,841
88,115
313,956
Total recognised income for the year
–
124,158
–
–
–
–
225,841
349,999
115,126
465,125
7,087
–
(2,009)
–
–
–
–
5,078
–
5,078
–
–
1,148
–
–
–
–
1,148
–
1,148
–
–
–
–
–
–
–
–
(15)
(15)
Issuance of shares under Pre-IPO Share Option Scheme Recognition of equitysettled share-based payments
32
Change of interest in a subsidiary Acquisition of a subsidiary
–
–
–
–
–
–
–
–
637
637
Return of minority shareholder’s share of reserves
–
–
–
–
–
–
–
–
(14,298)
(14,298)
Capital injection by minority shareholders
–
–
–
–
–
–
–
–
14,691
14,691
–
–
–
–
–
–
(22,092)
(22,092)
–
(22,092)
Dividends declared to minority shareholders
–
–
–
–
–
–
–
–
(109,697)
(109,697)
Appropriations
–
–
–
26,036
–
–
(26,036)
–
–
–
1,226,168
83,675
49,859
69,178
(386,571)
(48,628)
875,644
1,869,325
461,051
2,330,376
Dividends
Balance at December 31, 2008
31
29
Note A: Included in the total share issue expenses in 2007 was non-audit fees paid to the auditors of the Company amounting to $234,728 in connection with the international offering of shares, convertible notes and initial offering exercise of the Company.
See accompanying notes to financial statements.
62
YANLORDLAND 2008 ANNUAL REPORT
Statements of Changes in Equity Financial year ended December 31, 2008
Share capital $’000
Equity reserve $’000
Accumulated losses $’000
Total $’000
780,175
1,265
(2,807)
778,633
Net loss for the year
–
–
(778)
(778)
Total recognised expense for the year
–
–
(778)
(778)
Issuance of shares pursuant to international offerings exercise, net of expenses (Note A)
299,213
–
–
299,213
Conversion of convertible notes
139,693
(19,381)
–
120,312
–
66,546
–
66,546
Note
COMPANY Balance at January 1, 2007
Recognition of equity component of convertible notes, net of expenses (Note A) Recognition of equity-settled share-based payments
32
–
2,290
–
2,290
Dividends
29
–
–
(51,284)
(51,284)
1,219,081
50,720
(54,869)
1,214,932
Net profit for the year
–
–
62,195
62,195
Total recognised income for the year
–
–
62,195
62,195
7,087
(2,009)
–
5,078
Balance at December 31, 2007
Issuance of shares under Pre-IPO Share Option Scheme Recognition of equity-settled share-based payments
32
–
1,148
–
1,148
Dividends
29
–
–
(22,092)
(22,092)
1,226,168
49,859
(14,766)
1,261,261
Balance at December 31, 2008
Note A: Included in the total share issue expenses in 2007 was non-audit fees paid to the auditors of the Company amounting to $234,728 in connection with the international offering of shares, convertible notes and initial offering exercise of the Company.
See accompanying notes to financial statements.
63
YANLORDLAND 2008 ANNUAL REPORT
Consolidated Cash Flow Statement Financial year ended December 31, 2008
GROUP 2008 $’000
2007 $’000
Operating activities Profit before income tax
580,883
537,591
(15)
37
1,148
2,290
Adjustments for: (Gain) loss on acquisition of additional interest from a minority shareholder Equity-settled share-based payment expense Goodwill written off
632
–
3,900
2,786
(81,220)
(39,634)
2,155
(1,721)
(11)
28
–
(4,123)
Net loss (gain) on disposal of investment properties
109
(361)
Dividend income from held-for-trading investments
(27)
(73)
Dividend income from an available-for-sale investment
(3,115)
(2,257)
Finance cost
4,739
15,351
Interest income
(7,957)
(21,236)
–
482
Depreciation expense Fair value gain on investment properties Fair value loss (gain) on held-for-trading investments Net (gain) loss on disposal of property, plant and equipment Net gain on disposal of held-for-trading investments
Provision for decrease in value of completed properties for sale Allowance (recovery) for doubtful debts and bad debts written off Operating cash flows before movement in working capital Properties for development Inventories Completed properties for sale Properties under development for sale Trade and other receivables and deposits Trade and other payables Cash used in operations Interest paid Income tax paid Net cash used in operating activities
64
YANLORDLAND 2008 ANNUAL REPORT
1
(299)
501,222
488,861
(527,134)
(1,217,554)
2,783
(2,743)
(405,903)
(44,796)
48,878
(693)
8,437
(30,408)
(166,142)
87,181
(537,859)
(720,152)
(90,307)
(29,129)
(130,912)
(92,748)
(759,078)
(842,029)
Consolidated Cash Flow Statement Financial year ended December 31, 2008
GROUP Note
Investing activities Interest received Dividend received from held-for-trading investments Dividend received from an available-for-sale investment Purchase of property, plant and equipment Purchase of an intangible asset Purchase of held-for-trading investments Purchase of an available-for-sale investment Proceeds on disposal of property, plant and equipment Proceeds on disposal of held-for-trading investments Proceeds on disposal of investment properties Repayment from a third party Acquisition of additional interest in a subsidiary Acquisition of subsidiaries Increase in pledged bank deposits Advance to minority shareholders of subsidiaries Net cash used in investing activities
2007 $’000
7,247 27 3,115 (8,930) (128) – – 90 – 1,094 – – (134,742) (5,117) (67,313) (204,657)
21,192 73 2,257 (5,149) – (13,817) (42,510) 43 22,027 3,320 503 (48,628) (9,708) (612) (42,959) (113,968)
(22,092) 3,565 36,302 (1,425) (17) – –
(51,284) (15,767) (80,466) (81) (1,074) 459,855 299,213
5,078 696,725 (213,457) (41,719) (14,298) 14,691 463,353
– 535,976 (300,555) (71,666) – 247,954 1,022,105
17
(500,382) 702,857
66,108 622,237
17
173,266 375,741
14,512 702,857
31
Financing activities Dividend paid Advance from (repayment to) a shareholder Advance from (repayment to) minority shareholders of subsidiaries Repayment to directors Repayment to related parties Net proceeds on issue of convertible notes Net proceeds on issue of new shares Net proceeds on issure of new shares under Pre-IPO Share Option Scheme Proceeds from bank loans Repayment of bank loans Dividends paid to minority shareholders of subsidiaries Return of minority shareholder’s share of reserves Cash injection from minority shareholders of subsidiaries Net cash from financing activities (Decrease) increase in cash and cash equivalents Cash and cash equivalents at beginning of year Effect of exchange rate changes on the balance of cash held in foreign currencies Cash and cash equivalents at end of year
2008 $’000
See accompanying notes to financial statements.
65
YANLORDLAND 2008 ANNUAL REPORT
Notes to Financial Statements December 31, 2008 1
GENERAL The Company (Registration No. 200601911K) is incorporated in the Republic of Singapore with its principal place of business and registered office at 9 Temasek Boulevard, #36-02 Suntec Tower Two, Singapore 038989. The Company is listed on the Singapore Exchange Securities Trading Limited. The financial statements are expressed in Singapore dollars. The principal activity of the Company is to carry on the business of an investment holding company. The principal activities of the subsidiaries are disclosed in Note 10 to the financial statements. The consolidated financial statements of the Group and balance sheet and statement of changes in equity of the Company for the financial year ended December 31, 2008 were authorised for issue by the Board of Directors on March 27, 2009.
2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES BASIS OF ACCOUNTING – The financial statements are prepared in accordance with the historical cost convention, except as disclosed in the accounting policies below, and are drawn up in accordance with the provisions of the Singapore Companies Act and Singapore Financial Reporting Standards (“FRS”). ADOPTION OF NEW AND REVISED STANDARDS – In the current financial year, the Group has adopted all the new and revised FRSs and Interpretations of FRSs (“INT FRSs”) that are relevant to its operations and effective for annual periods beginning on or after January 1, 2008. The adoption of these new/revised FRSs and INT FRSs does not result in changes to the Group’s and the Company’s accounting policies and has no material effect on the amounts reported for the current or prior years. At the date of authorisation of these financial statements, the following FRSs, INT FRSs and amendments to FRSs that are relevant to the Group and the Company were issued but not effective: FRS FRS FRS FRS
1 23 102 108
– – – –
Presentation of Financial Statements (Revised) Borrowing Costs (Revised) Share-based Payment (Amendments relating to vesting conditions and cancellations) Operating Segments
Consequential amendments were also made to various standards as a result of these new/revised standards. The management anticipates that the adoption of the above FRSs, INT FRSs and amendments to FRSs in future periods will have no material impact on the financial statements of the Group and of the Company in the period of their initial adoption except for the following: FRS 1 – Presentation of Financial Statements (Revised) FRS 1 (Revised) will be effective for annual periods beginning on or after January 1, 2009, and will change the basis for presentation and structure of the financial statements. It does not change the recognition, measurement or disclosure of specific transactions and other events required by other FRSs.
66
YANLORDLAND 2008 ANNUAL REPORT
Notes to Financial Statements December 31, 2008 2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont’d) FRS 108 – Operating Segments FRS 108 will be effective for annual financial statements beginning on or after January 1, 2009 and supersedes FRS 14 – Segment Reporting. FRS 108 requires operating segments to be identified on the basis of internal reports about components of the Group that are regularly reviewed by the chief operating decision maker in order to allocate resources to the segment and to assess its performance. In contrast, FRS 14 requires an entity to identify two sets of segments (business and geographical), using a risks and rewards approach, with the entity’s system of internal financial reporting to key management personnel serving only as the starting point for the identification of such segments. Following the adoption of FRS 108, the Group’s current basis of segment reporting is not expected to change significantly as the identification of the reportable segments is based on the internal management reports submitted to management for decision making. BASIS OF CONSOLIDATION – The consolidated financial statements incorporate the financial statements of the Company and entities controlled by the Company (its subsidiaries). Control is achieved where the Company has the power to govern the financial and operating policies of the investee enterprise so as to obtain benefits from its activities. The results of subsidiaries acquired or disposed of during the year are included in the consolidated profit and loss statement from the effective date of acquisition or up to the effective date of disposal, as appropriate. All intra-group transactions, balances, income and expenses are eliminated on consolidation. Minority interests in the net assets of consolidated subsidiaries are identified separately from the Group’s equity therein. Minority interests consist of the amount of those interests at the date of the original business combination (see below) and the minority’s share of changes in equity since the date of the combination. Losses applicable to the minority in excess of the minority’s interest in the subsidiary’s equity are allocated against the interests of the Group except to the extent that the minority has a binding obligation and is able to make an additional investment to cover its share of those losses. In the Company’s financial statements, investments in subsidiaries are carried at cost less any impairment in net recoverable value that has been recognised in profit or loss. BUSINESS COMBINATIONS – The acquisition of subsidiaries from a common shareholder is accounted for using the merger accounting method. Under this method, the Company has been treated as the holding company of the subsidiaries for the financial years presented rather than from the date of acquisition of the subsidiaries. The acquisition of subsidiaries from a party other than a common shareholder is accounted for using the purchase method. The cost of the acquisition is measured at the aggregate of the fair values, at the date of exchange, of assets given, liabilities incurred or assumed, and equity instruments issued by the Group in exchange for control of the acquiree, plus any costs directly attributable to the business combination. The acquiree’s identifiable assets, liabilities and contingent liabilities that meet the conditions for recognition under FRS 103 are recognised at their fair values at the acquisition date.
67
YANLORDLAND 2008 ANNUAL REPORT
Notes to Financial Statements December 31, 2008 2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont’d) Goodwill arising on acquisition is recognised as an asset and initially measured at cost, being the excess of the cost of the business combination over the Group’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities recognised. If, after reassessment, the Group’s interest in the net fair value of the acquiree’s identifiable assets, liabilities and contingent liabilities exceeds the cost of the business combination, the excess is recognised immediately in profit or loss. The interest of minority shareholders in the acquiree is initially measured at the minority’s proportion of the net fair value of the assets, liabilities and contingent liabilities recognised. FINANCIAL INSTRUMENTS – Financial assets and financial liabilities are recognised on the Group’s balance sheet when the Group becomes a party to the contractual provisions of the instrument. Financial assets Investments are recognised and de-recognised on a trade date where the purchase or sale of an investment is under a contract whose terms require delivery of the investment within the timeframe established by the market concerned, and are initially measured at fair value, plus transaction costs except for those financial assets classified as at fair value through profit or loss which are initially measured at fair value. Other financial assets are classified into the following specified categories: “financial assets at fair value through profit or loss”, “available-for-sale financial assets” and “loans and receivables”. The classification depends on the nature and purpose of financial assets and is determined at the time of initial recognition. Effective interest method The effective interest method is a method of calculating the amortised cost of a financial instrument and of allocating interest income or expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts or payments (including all fees on points paid or received that from an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the financial instrument, or where appropriate, a shorter period. Income and expense is recognised on an effective interest rate basis for debt instruments other than those financial instruments “at fair value through profit or loss”. Financial assets at fair value through profit or loss (FVTPL) Financial assets are classified as at FVTPL where the financial asset is either held for trading or it is designated as at FVTPL. A financial asset is classified as held-for-trading if: z
it has been acquired principally for the purpose of selling in the near future; or
z
it is a part of an identified portfolio of financial instruments that the group manages together and has a recent actual pattern of short-term profit-taking; or
z
it is a derivative that is not designated and effective as a hedging instrument.
FVTPL are stated at fair value, with any resultant gain or loss recognised in profit or loss. The net gain or loss recognised in profit or loss incorporates any dividend or interest earned on the financial asset.
68
YANLORDLAND 2008 ANNUAL REPORT
Notes to Financial Statements December 31, 2008 2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont’d) Available-for-sale financial assets Available-for-sale financial assets are those non-derivative financial assets that are not classified into any of the other categories. Investments in equity instruments that do not have a quoted market price in an active market and whose fair value cannot be reliably measured are measured at cost less impairment loss. Loans and receivables Trade receivables, loans and other receivables that have fixed or determinable payments that are not quoted in an active market are classified as “loans and receivables”. Loans and receivables are measured at amortised cost using the effective interest method less impairment. Interest is recognised by applying the effective interest method, except for short-term receivables when the recognition of interest is immaterial. Impairment of financial assets Financial assets, other than those at fair value through profit or loss, are assessed for indicators of impairment at each balance sheet date. Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows of the investment have been impacted. For financial assets carried at amortised cost, the amount of the impairment is the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the original effective interest rate. The carrying amount of the financial asset is reduced by the impairment loss directly for all financial assets with the exception of trade receivables where the carrying amount is reduced through the use of an allowance account. When a trade receivable is uncollectible, it is written off against the allowance account. Subsequent recoveries of amounts previously written off are credited against the allowance account. Changes in the carrying amount of the allowance account are recognised in profit or loss. With the exception of available-for-sale equity instruments, if, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment loss was recognised, the previously recognised impairment loss is reversed through profit or loss to the extent the carrying amount of the investment at the date the impairment is reversed does not exceed what the amortised cost would have been had the impairment not been recognised. In respect of available-for-sale equity instruments, any subsequent increase in fair value after an impairment loss, is recognised directly in equity. Derecognition of financial assets The Group derecognises a financial asset only when the contractual rights to the cash flows from the asset expire, or it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity. If the Group neither transfers nor retains substantially all the risks and rewards of ownership and continues to control the transferred asset, the Group recognises its retained interest in the asset and an associated liability for amounts it may have to pay. If the Group retains substantially all the risks and rewards of ownership of a transferred financial asset, the Group continues to recognise the financial asset and also recognises a collaterialised borrowing for the proceeds received.
69
YANLORDLAND 2008 ANNUAL REPORT
Notes to Financial Statements December 31, 2008 2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont’d) Financial liabilities and equity instruments Classification as debt or equity Financial liabilities and equity instruments issued by the Group are classified according to the substance of the contractual arrangements entered into and the definitions of a financial liability and an equity instrument. Equity instruments An equity instrument is any contract that evidences a residual interest in the assets of the Group after deducting all of its liabilities. Equity instruments are recorded at the proceeds received, net of direct issue costs. Financial liabilities Trade and other payables are initially measured at fair value, net of transaction costs, and are subsequently measured at amortised cost, using the effective interest method, with interest expense recognised on an effective yield basis. Interest-bearing bank loans are initially measured at fair value, and are subsequently measured at amortised cost, using the effective interest method. Any difference between the proceeds (net of transaction costs) and the settlement or redemption of borrowings is recognised over the term of the borrowings in accordance with the Group’s accounting policy for borrowing costs (see below). Financial guarantee contract liabilities are measured initially at their fair values and subsequently at the higher of the amount of obligation under the contract recognised as a provision in accordance with FRS 37 – Provision, Contingent Liabilities and Contingent Assets and the amount initially recognised less cumulative amortisation in accordance with FRS 18 – Revenue. Derecognition of financial liabilities The Group derecognises financial liabilities when, and only when, the Group’s obligations are discharged, cancelled or they expire. Convertible notes Convertible notes are regarded as compound instruments, consisting of a liability component and an equity component. The component parts of compound instruments are classified separately as financial liabilities and equity in accordance with the substance of the contractual arrangement. At the date of issue, the fair value of the liability component is estimated using the prevailing market interest rate for a similar nonconvertible instrument. This amount is recorded as a liability on an amortised cost basis until extinguished upon conversion or at the instrument’s maturity date. The equity component is determined by deducting the amount of the liability component from the fair value of the compound instrument as a whole. This is recognised and included in equity, net of income tax effects, and is not subsequently remeasured. Upon conversion, the liability component is derecognised, the amortised cost of the notes converted and the original equity component recognised are reclassified to share capital. No gain or loss is recognised on conversion. LEASES – Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.
70
YANLORDLAND 2008 ANNUAL REPORT
Notes to Financial Statements December 31, 2008 2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont’d) The Group as lessor Rental income from operating leases is recognised on a straight-line basis lease unless another systematic basis is more representative of the time derived from the leased asset is diminished. Initial direct costs incurred in operating lease are added to the carrying amount of the leased asset and basis over the lease term.
over the term of the relevant pattern in which use benefit negotiating and arranging an recognised on a straight-line
The Group as lessee Rentals payable under operating leases are charged to profit and loss statement on a straight-line basis over the term of the relevant lease unless another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed. Contingent rentals arising under operating leases are recognised as an expense in the period in which they are incurred. PROPERTIES FOR DEVELOPMENT – Properties for development are mainly vacant leasehold land for development and land where management is obtaining permits prior to the commencement of physical construction and are stated at cost less allowance for impairment in value made by the management. These land properties include all land acquired where management has yet to decide whether to develop it for long term retention or for sale. When the intention is clear and action initiated or the physical construction and development are commenced, land to be developed for long term retention is reclassified as investment properties whereas land to be developed for sale and expected to be realised in the normal course of the Group’s property development cycle is reclassified as properties under development for sale under current assets. PROPERTIES UNDER DEVELOPMENT FOR SALE – Properties under development for sale are stated at lower of cost or estimated net realisable value. Net realisable value takes into account the price ultimately expected to be realised and the anticipated costs to completion. Cost of property in the course of development comprises land cost, development costs and borrowing costs capitalised during the development period. When completed, the units held for sale are classified as completed properties for sale. COMPLETED PROPERTIES FOR SALE – Completed properties for sale but remaining unsold at year end are stated at lower of cost or net realisable value. Cost is determined by apportionment of the total land cost, development costs and borrowing costs capitalised attributable to the unsold properties. Net realisable value is determined by reference to sale proceeds of properties sold in the ordinary course of business less all estimated selling expenses after the balance sheet date, or by management estimates based on prevailing market conditions. PROPERTY, PLANT AND EQUIPMENT – Property, plant and equipment are stated at cost less accumulated depreciation and any accumulated impairment losses. Construction-in-progress consists of construction costs and finance costs incurred during the period of construction.
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YANLORDLAND 2008 ANNUAL REPORT
Notes to Financial Statements December 31, 2008 2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont’d) Depreciation is charged so as to write off the cost of property, plant and equipment, other than construction-in-progress, over their estimated useful lives, using the straight-line method, substantially on the following bases: Leasehold land and buildings Furniture, fixtures and equipment Motor vehicles
– – –
2% to 5% 20% 10% to 25%
The estimated useful lives, residual values and depreciation method are reviewed at each year end, with the effect of any changes in estimate accounted for on a prospective basis. Fully depreciated property, plant and equipment still in use are retained in the financial statements. The gain or loss arising on the disposal or retirement of a property, plant and equipment is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognised in the profit or loss. INVESTMENT PROPERTIES – Investment properties, which are properties held to earn rentals and/or for capital appreciation, are measured initially at its cost, including transaction costs. Subsequent to initial recognition, investment property is measured at fair value. The fair value of an investment property is the price at which the property could be exchanged between knowledgeable, willing parties in an arm’s length transaction. Professional valuations are obtained at least once in three years. Gains or losses arising from changes in the fair value of investment property are included in profit or loss for the period in which they arise. GOODWILL – Goodwill arising on the acquisition of a subsidiary or a jointly-controlled entity from third parties represents the excess of the cost of acquisition over the Group’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities of the subsidiary or jointly controlled entity recognised at the date of acquisition. Goodwill is initially recognised as an asset at cost and is subsequently measured at cost less any accumulated impairment losses. For the purpose of impairment testing, goodwill is allocated to each of the Group’s cash-generating units expected to benefit from the synergies of the combination. Cash-generating units to which goodwill has been allocated are tested for impairment annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit. An impairment loss recognised for goodwill is not reversed in a subsequent period. On disposal of a subsidiary or a jointly-controlled entity, the attributable amount of goodwill is included in the determination of the profit or loss on disposal. INTANGIBLE ASSET – This relates to a club membership held on a long-term basis and is stated at cost less impairment losses. IMPAIRMENT OF TANGIBLE AND INTANGIBLE ASSETS EXCLUDING GOODWILL – At each balance sheet date, the Group reviews the carrying amounts of its tangible and intangible assets other than investment properties carried at fair value, to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs.
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YANLORDLAND 2008 ANNUAL REPORT
Notes to Financial Statements December 31, 2008 2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont’d) Intangible assets with indefinite useful lives and intangible assets not yet available for use are tested for impairment annually, and whenever there is an indication that the asset may be impaired. Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss. Where an impairment loss subsequently reverses, the carrying amount of the asset (cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss. PROVISIONS – Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that the Group will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation. The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the balance sheet date, taking into account the risks and uncertainties surrounding the obligation. Where a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows. When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, the receivable is recognised as an asset if it is virtually certain that reimbursement will be received and the amount of the receivable can be measured reliably. SHARE-BASED PAYMENTS – The Group issues equity-settled share-based payments to certain employees. Equity-settled share-based payments are measured at fair value of the equity instruments (excluding the effect of non market-based vesting conditions) at the date of grant. Details regarding the determination of the fair value of equity-settled share-based transactions are set out in Note 32. The fair value determined at the grant date of the equity-settled share-based payments is expensed on a straight-line basis over the vesting period, based on the Group’s estimate of the number of equity instruments that will eventually vest and adjusted for the effect of non market-based vesting conditions. At each balance sheet date, the Group revises the estimate of the number of equity instruments expected to vest. The impact of the revision of the original estimates, if any, is recognised over the remaining vesting period with a corresponding adjustment to the equity-settled employee benefits reserve. MERGER RESERVE – Merger reserve represents the difference between the nominal amount of the share capital of the subsidiaries at the date on which it was acquired by the Group and the nominal amount of the share capital issued as consideration for the acquisition under the merger accounting (see above). STATUTORY RESERVE – Statutory reserve represents the amount transferred from profit after taxation of the subsidiaries incorporated in the People’s Republic of China (excluding Hong Kong) (the “PRC”) in accordance with the PRC requirement. The statutory reserve cannot be reduced except where approval is obtained from the relevant PRC authority to apply the amount either in setting off any accumulated losses or increasing capital.
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YANLORDLAND 2008 ANNUAL REPORT
Notes to Financial Statements December 31, 2008 2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont’d) OTHER RESERVE – Other reserve represents the difference between the purchase consideration and the carrying amount of net assets of the additional interest acquired in the subsidiaries at the date of acquisition. REVENUE RECOGNITION – Revenue is measured at the fair value of the consideration received or receivable. Revenue is reduced for estimated customer returns, rebates and other similar allowances. Sale of properties developed Revenue from properties developed for sale is recognised when the legal title passes to the buyer or when the equitable interest in the property vest in the buyer upon release of the handover notice of the respective property to the buyer, whichever is the earlier. Payments received from buyers prior to this stage are recorded as advances from customers for sales of properties and are classified as current liabilities. Rendering of services Management fee income and service income are recognised in the year when services have been rendered. Interest income Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable. Dividend income Dividend income from investments is recognised when the shareholders’ rights to receive payment have been established. Rental income Rental income from investment properties is recognised on a straight-line basis over the term of the relevant lease. TAX SUBSIDIES – Tax subsidies are credited to the profit and loss statement when received from the relevant authorities. GOVERNMENT SUBSIDIES – Government subsidies are not recognised until there is reasonable assurance that the Company will comply with the conditions attaching to them and the subsidies will be received. Government subsidies are recognised as income over the periods necessary to match them with the related costs. Government subsidies related to expense items are recognised in the same period as those expenses are charged to the profit and loss statement or are reported separately as “other operating income”. BORROWING COSTS – Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of these assets, until such time as the assets are substantially ready for their intended use or sale. Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalisation.
74
YANLORDLAND 2008 ANNUAL REPORT
Notes to Financial Statements December 31, 2008 2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont’d) All other borrowing costs are recognised in profit and loss statement in the period in which they are incurred. RETIREMENT BENEFIT COSTS – Payments to defined contribution retirement benefit plans are charged as an expense as they fall due. Payments made to state-managed retirement benefit schemes, such as the Singapore Central Provident Fund, are dealt with as payments to defined contribution plans where the Group’s obligations under the plans are equivalent to those arising in a defined contribution retirement benefit plan. Pursuant to the relevant regulations of the PRC government, the PRC subsidiaries of the Group (“PRC Subsidiaries”) have participated in central pension schemes (“the Schemes”) operated by local municipal governments whereby the PRC Subsidiaries are required to contribute a certain percentage of the basic salaries of their employees to the Schemes to fund their retirement benefits. The local municipal governments undertake to assume the retirement benefit obligations of all existing and future retired employees of the PRC Subsidiaries. The only obligation of the PRC Subsidiaries with respect to the Schemes is to pay the ongoing required contributions under the Schemes mentioned above. Contributions under the Schemes are charged to the profit and loss statement as incurred. EMPLOYEE LEAVE ENTITLEMENT – Employee entitlements to annual leave are recognised when they accrue to employees. A provision is made for the estimated liability for annual leave as a result of services rendered by employees up to the balance sheet date. INCOME TAX – Income tax expense represents the sum of the tax currently payable and deferred tax. The tax currently payable is based on taxable profit for the year. Taxable profit differs from profit as reported in the profit and loss statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are not taxable or tax deductible. The Group’s liability for current tax is calculated using tax rates (and tax laws) that have been enacted or substantively enacted in countries where the Company and subsidiaries operate by the balance sheet date. Deferred tax is recognised on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit. Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries, except where the Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.
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YANLORDLAND 2008 ANNUAL REPORT
Notes to Financial Statements December 31, 2008 2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont’d) Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset realised based on the tax rates (and tax laws) that have been enacted or substantively enacted by the balance sheet date. Deferred tax is charged or credited to profit or loss, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Group intends to settle its current tax assets and liabilities on a net basis. Current and deferred tax are recognised as an expense or income in profit or loss, except when they relate to items credited or debited directly to equity, in which case the tax is also recognised directly in equity, or where they arise from the initial accounting for a business combination. In the case of a business combination, the tax effect is taken into account in calculating goodwill or determining the excess of the acquirer’s interest in the net fair value of the acquiree’s identifiable assets, liabilities and contingent liabilities over cost. FOREIGN CURRENCY TRANSACTIONS AND TRANSLATION – The individual financial statements of each Group entity are measured and presented in the currency of the primary economic environment in which the entity operates (its functional currency). The consolidated financial statements of the Group and the balance sheet of the Company are presented in Singapore dollars, which is the functional currency of the Company and the presentation currency for the consolidated financial statements. In preparing the financial statements of the individual entities, transactions in currencies other than the entity’s functional currency are recorded at the rates of exchange prevailing on the date of the transaction. At each balance sheet date, monetary items denominated in foreign currencies are retranslated at the rates prevailing on the balance sheet date. Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rates prevailing on the date when the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated. Exchange differences arising on the settlement of monetary items, and on retranslation of monetary items are included in profit or loss for the period. Exchange differences arising on the retranslation of non-monetary items carried at fair value are included in profit or loss for the period except for differences arising on the retranslation of non-monetary items in respect of which gains and losses are recognised directly in equity. For such non-monetary items, any exchange component of that gain or loss is also recognised directly in equity. For the purpose of presenting consolidated financial statements, the assets and liabilities of the Group’s foreign operations (including comparatives) are expressed in Singapore dollars using exchange rates prevailing on the balance sheet date. Income and expense items (including comparatives) are translated at the average exchange rates for the period, unless exchange rates fluctuated significantly during that period, in which case the exchange rates at the dates of the transactions are used. Exchange differences arising, if any, are classified as equity and transferred to the Group’s translation reserve. Such translation differences are recognised in profit or loss in the period in which the foreign operation is disposed of. On consolidation, exchange differences arising from the translation of the net investment in foreign entities (including monetary items that, in substance, form part of the net investment in foreign entities) are taken to the translation reserve.
76
YANLORDLAND 2008 ANNUAL REPORT
Notes to Financial Statements December 31, 2008 2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont’d) Goodwill and fair value adjustments arising on the acquisition of a foreign operation are treated as assets and liabilities of the foreign operation and translated at the closing rate. CASH AND CASH EQUIVALENTS – Cash and cash equivalents comprise cash on hand and demand deposits and are subject to an insignificant risk of changes in value.
3
CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY In the application of the Group’s accounting policies, which are described in Note 2 above, management is required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods. Critical judgements in applying the Group’s accounting policies The following are the critical judgements, apart from those involving estimations (see below), that management has made in the process of applying the Group’s accounting policies and that have the most significant effect on the amounts recognised in the financial statements. Taxation The Group accounts for income taxes under the provisions of FRS 12 – Income Taxes. The Group has recorded deferred tax assets on tax loss of $22.7 million (2007 : $27.0 million) because the management believes it is more likely than not that such tax loss can be utilised (Note 13). In the event the management determines that the Group would not be able to realise such deferred tax assets in the future in excess of their recorded amount, an adjustment to the Group’s deferred tax assets would decrease the Group’s income in the period such determination is made. Likewise, if the management determines that the Group is able to realise all or part of the Group’s unrecognised deferred tax on tax loss of $21.8 million (2007 : $16.4 million), which is currently not expected to be utilised in the future, an adjustment to the Group’s deferred tax assets would increase the Group’s income in the period such determination is made. The Group records deferred tax using the balance sheet liability method at the rates that have been enacted by the balance sheet date. Land Appreciation Tax (“LAT”) All income from sale of properties in the PRC is subject to LAT at progressive rates under the PRC tax laws and regulations. The management estimates and provides for LAT in accordance with the PRC tax laws and regulations. However, prior to October 1, 2006, the Group has not been levied any LAT for the sale of properties located in Shanghai Pudong New District and this applies also to all property development companies in Shanghai Pudong New District. The management, after taking into consideration its due diligence, as described in Note 26, consider the provision of LAT to be adequate.
77
YANLORDLAND 2008 ANNUAL REPORT
Notes to Financial Statements December 31, 2008 3
CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY (Cont’d) Key sources of estimation uncertainty The key assumptions concerning the future, and other key sources of estimation uncertainty at the balance sheet date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are discussed below. Carrying amounts of properties for development, properties under development for sale and completed properties for sale The aggregate carrying amount of these properties totaled $3,903.6 million as at December 31, 2008 (2007 : $2,627.8 million), details of which are disclosed in Note 9. They are stated at cost less allowance for impairment in value or at the lower of cost and estimated net realisable values, assessed on an individual project basis. When it is probable that the total project costs will exceed the total projected revenue net of selling expenses i.e., net realisable value, the amount in excess of net realisable value is recognised as an expense immediately. The process of evaluating the net realisable value for each property is subject to management judgement and the effect of assumptions in respect of development plans, timing of sale and the prevailing market conditions. Management performs cost studies for each project, taking into account the costs incurred to date, the development status and costs to complete each development project. Any future variation in plans, assumptions and estimates can potentially impact the carrying amounts of the respective properties. Valuation of investment properties As disclosed in Note 8 to the financial statements, investment properties are stated at fair value based on the valuation performed by an independent professional valuer. In determining the fair values, the valuer has made reference to both the comparable sales transactions as available in the relevant market of these properties and the capitalisation of the existing and reversionary rental income potential. The valuer, has in its valuation report, drawn attention to the fact that the current volatility in the global financial system has created a significant degree of turbulence in commercial real estate markets across the world. Furthermore, the lack of liquidity in the capital markets means that it may be very difficult to achieve a successful sale of property assets in the short-term. In relying on the independent professional valuation report, management considered the method of valuation and the Group’s marketing strategy and is of the view that the estimated values are reasonable. Depreciation of property, plant and equipment The management exercises their judgement in estimating the useful lives of the depreciable assets. Depreciation is provided to write off the cost of property, plant and equipment (Note 7) over their estimated useful lives, using the straight line method. Share-based payment FRS 102 Shared-based Payment requires the recognition of equity-settled share-based payments at fair value at the date of grant. As disclosed in Note 32 to the financial statements, the management used the Black-Scholes pricing model to measure fair value at the date of grant. The fair value determined at the grant date of equity-settled share-based payments is expensed on a straight-line basis over the vesting period, based on the Group’s estimate of shares that will eventually vest and adjusted for the effect of non market-based vesting conditions.
78
YANLORDLAND 2008 ANNUAL REPORT
Notes to Financial Statements December 31, 2008 4
FINANCIAL RISKS AND MANAGEMENT (a)
Categories of financial instruments The following table sets out the financial instruments as at the balance sheet date: GROUP 2008 $’000 Financial assets Fair value through profit or loss: Held-for-trading investments Loans and receivables (including cash and cash equivalents) Available-for-sale investments Financial liabilities Amortised cost
(b)
COMPANY 2007 $’000
2008 $’000
2007 $’000
1,101
3,323
–
–
498,017 10,445
828,493 52,384
1,353,020 –
1,289,428 –
2,008,973
1,358,125
606,615
589,941
Financial risk management policies and objectives The management of the Group monitors and manages the financial risks relating to the operations of the Group to ensure appropriate measures are implemented in a timely and effective manner. These risks include market risk (including foreign exchange risk, interest rate risk, equity price risk), credit risk and liquidity risk. The Group does not hold or issue derivative financial instruments for speculative purposes. There has been no change to the Group’s exposure to these financial risks or the manner in which it manages and measures the risks. Market risk exposures are measured using sensitivity analysis indicated below. (i)
Foreign exchange risk management The Group transacts business in various foreign currencies, including the United States (“US”) dollar, Hong Kong (“HK”) dollar and Renminbi (“RMB”) and therefore is exposed to foreign exchange risk. The Group does not enter into derivative foreign exchange contracts and foreign currency borrowings to hedge its foreign exchange risk. At the reporting date, the carrying amounts of monetary assets and monetary liabilities denominated in currencies other than the respective entities’ functional currencies are as follows: GROUP Liabilities 2008 2007 $’000 $’000 US dollars HK dollars RMB
– – 291,190 293,233 – –
COMPANY
Assets 2008 2007 $’000 $’000 18,760 3,126 15,443
Liabilities 2008 2007 $’000 $’000
109,647 – 3,323 287,836 – –
Assets 2008 2007 $’000 $’000
– 995,087 973,368 293,210 109,996 65,702 – – –
79
YANLORDLAND 2008 ANNUAL REPORT
Notes to Financial Statements December 31, 2008 4
FINANCIAL RISKS AND MANAGEMENT (Cont’d) (b)
Financial risk management policies and objectives (Cont’d) (i)
Foreign exchange risk management (Cont’d) The Company has a number of investments in foreign subsidiaries, whose net assets are exposed to currency translation risk. The Group has not designated its foreign currency denominated debt obligations as hedging instruments for managing of foreign currency translation risk relating to the net assets of its foreign operations. Foreign currency sensitivity The following table details the sensitivity to a 6% increase in the exchange rate for the relevant foreign currencies against the functional currency of each entity of the Group. 6% is the sensitivity rate used when reporting foreign currency risk internally to key management personnel and represents management’s assessment of the possible change in foreign exchange rates. The sensitivity analysis includes only outstanding foreign currency denominated monetary items and adjusts their translation at the year end for a 6% change in foreign currency rates. A positive number below indicates an increase in profit before income tax when the functional currency of each Group entity strengthens 6% against the relevant foreign currencies. For a 6% weakening of the functional currency of each Group entity against the relevant foreign currencies, there would be equal and opposite impact on the profit before income tax. US dollar impact
HK dollar impact
RMB impact
2008 $’000
2007 $’000
2008 $’000
2007 $’000
2008 $’000
(1,062)
(6,262)
16,317
16,409
(874)
–
(56,337)
(55,109)
10,068
12,878
–
–
2007 $’000
GROUP (Decrease) increase in profit before income tax COMPANY (Decrease) increase in profit before income tax
The Group’s sensitivity to US dollar exchange rate has decreased during the current year due to the reduction of US dollar balances in cash and bank balances at current year end as compared with the preceding year end. The Group’s sensitivity to HK dollar exchange rate during the current year approximates that of the preceding year as there is no significant change in the HK dollar denominated net monetary liabilities. The Group’s sensitivity to RMB exchange rate during current year is attributable to the RMB denominated amounts due from minority shareholders. The Company’s sensitivity to US dollar exchange rate has increased during the current year mainly due to the increase in US dollar denominated non-trade amount due from a subsidiary at current year end as compared with the preceding year end. The Company’s sensitivity to HK dollar exchange rate has decreased during the current year mainly due to the decrease in HK dollar denominated net liabilities at current year end as compared with the preceding year end. In management’s opinion, the sensitivity analysis is unrepresentative of the inherent foreign exchange risk as the year end exposure does not reflect the exposure during the year.
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YANLORDLAND 2008 ANNUAL REPORT
Notes to Financial Statements December 31, 2008 4
FINANCIAL RISKS AND MANAGEMENT (Cont’d) (b)
Financial risk management policies and objectives (Cont’d) (ii)
Interest rate risk management Summary quantitative data of the Group’s interest-bearing financial instruments can be found in Section (v) of this Note. The Group’s policy is to maintain cash and cash equivalents and borrowings in fixed rate instruments. However, it sometimes borrows at variable rates as well. Interest rate sensitivity The sensitivity analysis below has been determined based on the exposure to interest rates for non-derivatives instruments at the balance sheet date and the stipulated change taking place at the beginning of the financial year and held constant throughout the reporting year in the case of instruments that have floating rates. A 100 basis point increase or decrease is used when reporting interest rate risk internally to key management personnel and represents management’s assessment of the possible change in interest rates. If interest rates had been 100 basis points higher or lower and all other variables were held constant, the Group’s: z
profit before income tax for the year ended December 31, 2008 would decrease/ increase respectively by $11.8 million (2007 : decrease/increase respectively by $6.8 million). This is mainly attributable to the Group’s exposure to its variable rate of borrowings. It is the Group’s accounting policy to capitalise borrowing costs relevant to property development. Hence, the above mentioned interest rate fluctuation may not fully impact the profit in the year where interest is accrued but may affect profit in future financial years.
The Group’s sensitivity to interest rates has increased during the current year mainly due to the increase in variable rate debt instruments. In 2008, the management is of the view that the interest rate risk is not significant for the Company. Hence, no sensitivity analysis is presented for the Company. The Company’s profit and loss for the year ended December 31, 2007 was not affected by the changes in interest rates as the interest-bearing instruments carry fixed interest rate. (iii)
Equity price risk management The Group is exposed to equity price risk arising from equity investments classified as held-for-trading. Available-for-sale investments are held for strategic rather than trading purposes. The Group does not actively trade available-for-sale investments. Further details of these equity investments can be found in Notes 11 and 16 to the financial statements. The management is of the view that the equity price risk is not significant for the Group. Hence no sensitivity analysis is presented.
81
YANLORDLAND 2008 ANNUAL REPORT
Notes to Financial Statements December 31, 2008 4
FINANCIAL RISKS AND MANAGEMENT (Cont’d) (b)
Financial risk management policies and objectives (Cont’d) (iv)
Credit risk management Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Group. The Group has adopted a policy of only dealing with creditworthy counterparties and obtaining sufficient collateral where appropriate, as a means of mitigating the risk of financial loss from defaults. For sales of properties, sales proceeds are fully settled upon delivery of properties. The Group does not have any significant credit risk exposure to any single counterparty or any group of counterparties having similar characteristics except for non-trade amounts due from minority shareholders. The credit risk on financial assets is limited because the counterparties are mainly PRC government agents (Note 14) which management considers to be creditworthy and certain minority shareholders where securities are provided by undistributed retained earnings of a subsidiary yet to be declared as dividends and future dividend distributions by a subsidiary to the minority shareholders (Note 15). The sum of the carrying amount of financial assets recorded in the financial statements, grossed up for any allowances for losses represents the Group’s maximum exposure to credit risk. In addition to the credit risk in respect of the financial assets, the Group has provided guarantees of approximately $228.8 million (2007 : $224.3 million) to banks for the benefit of the Group’s customers in respect of mortgage loans provided by the banks to these customers for the purchase of the Group’s development properties, as elaborated in Note 35 to the financial statements.
(v)
Liquidity risk management The Group maintains cash and cash equivalents and external bank loans with staggered repayment dates, some of which are in excess of two years. The Group also minimises liquidity risk by keeping committed credit lines available. At December 31, 2008, the Group had available $169.3 million (2007 : $374.2 million) of undrawn committed bank credit facilities in respect of which all precedent conditions had been met. In managing liquidity risk, the management prepares cash flow forecasts using various assumptions and monitors the cash flows of the Group. Liquidity and interest risk analyses Non-derivative financial liabilities The following tables detail the remaining contractual maturity for non-derivative financial liabilities. The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Group and Company can be required to pay. The table includes both interest and principal cash flows. The adjustment column represents the estimated future interest attributable to the instrument included in the maturity analysis which is not included in the carrying amount of the financial liabilities on the balance sheet.
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YANLORDLAND 2008 ANNUAL REPORT
Notes to Financial Statements December 31, 2008 4
FINANCIAL RISKS AND MANAGEMENT (Cont’d) (b)
Financial risk management policies and objectives (Cont’d) (v)
Liquidity risk management (Cont’d) Non-derivative financial liabilities (Cont’d) Weighted average On effective demand More than More than interest or within 1 year to 2 years to rate 1 year 2 years 5 years Adjustments % $’000 $’000 $’000 $’000
Total $’000
GROUP 2008 Non-interest bearing Variable interest rate instruments
6.7
Fixed interest rate instruments
8.1
436,454
–
–
–
436,454
373,474
750,889
207,906
(152,876)
1,179,393
–
32,741
390,064
(29,679)
393,126
809,928
783,630
597,970
(182,555)
2,008,973
359,320
–
–
–
359,320
2007 Non-interest bearing Variable interest rate instruments
6.5
156,627
165,933
458,222
(107,774)
673,008
Fixed interest rate instruments
7.9
28,438
–
338,250
(40,891)
325,797
544,385
165,933
796,472
(148,665)
1,358,125
280,365
–
–
–
280,365
COMPANY 2008 Non-interest bearing Variable interest rate instruments
6.5
2,863
–
–
(175)
2,688
Fixed interest rate instruments
8.0
–
–
338,250
(14,688)
323,562
283,228
–
338,250
(14,863)
606,615
83
YANLORDLAND 2008 ANNUAL REPORT
Notes to Financial Statements December 31, 2008 4
FINANCIAL RISKS AND MANAGEMENT (Cont’d) (b)
Financial risk management policies and objectives (Cont’d) (v)
Liquidity risk management (Cont’d) Non-derivative financial liabilities (Cont’d) Weighted average On effective demand More than More than interest or within 1 year to 2 years to rate 1 year 2 years 5 years Adjustments % $’000 $’000 $’000 $’000
Total $’000
COMPANY 2007 Non-interest bearing Fixed interest rate instruments
8.0
290,746
–
–
–
290,746
–
–
338,250
(39,055)
299,195
290,746
–
338,250
(39,055)
589,941
Non-derivative financial assets The following tables detail the expected maturity for non-derivative financial assets. The tables below have been drawn up based on the undiscounted contractual maturities of the financial assets including interest that will be earned on those assets except where the Group and the Company anticipate that the cash flows will occur in a different period. Weighted average On effective demand More than interest or within 1 year to More than rate 1 year 5 years 5 years Adjustments % $’000 $’000 $’000 $’000
Total $’000
GROUP 2008 Non-interest bearing
84
403,962
–
10,445
–
414,407
Variable interest rate instruments
7.5
15,927
–
–
(1,111)
14,816
Fixed interest rate instruments
3.5
83,169
–
–
(2,829)
80,340
503,058
–
10,445
(3,940)
509,563
YANLORDLAND 2008 ANNUAL REPORT
Notes to Financial Statements December 31, 2008 4
FINANCIAL RISKS AND MANAGEMENT (Cont’d) (b)
Financial risk management policies and objectives (Cont’d) (v)
Liquidity risk management (Cont’d) Non-derivative financial assets (Cont’d) Weighted average On effective demand More than interest or within 1 year to More than rate 1 year 5 years 5 years Adjustments % $’000 $’000 $’000 $’000
Total $’000
GROUP 2007 Non-interest bearing Fixed interest rate instruments
3.5
545,359
–
52,384
–
597,743
296,525
–
–
(10,068)
286,457
841,884
–
52,384
(10,068)
884,200
In 2008 and 2007, the Company’s non-derivative financial assets are non-interest bearing with expected maturity within a year, except for the fixed deposits in 2007 which carried an interest rate of 2.6% per annum. (vi)
Fair value of financial assets and financial liabilities The carrying amounts of cash and cash equivalents, trade and other current receivables and payables approximate their respective fair values due to the relatively short-term maturity of these financial instruments. The management considers that carrying values approximate the fair values of other classes of financial assets and liabilities except for the convertible notes stated at amortised cost where fair value is disclosed in Note 20. The fair value of financial assets and financial liabilities with standard terms and conditions and traded on active liquid markets are determined with reference to quoted market prices.
85
YANLORDLAND 2008 ANNUAL REPORT
Notes to Financial Statements December 31, 2008 4
FINANCIAL RISKS AND MANAGEMENT (Cont’d) (c)
Capital risk management policies and objectives The Group manages its capital to ensure that entities in the Group will be able to continue as a going concern while maximising the return to shareholders through the optimisation of the debt and equity balance. The Group monitors capital on the basis of the net debt to equity ratio. This ratio is calculated as total debt less cash and bank balances divided by equity. Total debt include bank loans, convertible notes, non-trade amount due to a minority shareholder of a subsidiary and a shareholder of the Company. Equity is “Equity attributable to equity holders of the Company” as shown in the consolidated balance sheet. The net debt to equity ratio as at December 31, 2008 and 2007 were as follows: GROUP 2008 $’000 Total debt
2007 $’000
1,572,519
998,805
(375,741)
(702,857)
Net debt
1,196,778
295,948
Equity
1,869,325
1,535,192
64.0%
19.3%
Cash and bank balances
Net debt to equity ratio The Group’s overall strategy remains unchanged from 2007.
5
HOLDING COMPANY AND RELATED COMPANY TRANSACTIONS The Company is a subsidiary of Yanlord Holdings Pte. Ltd., incorporated in the Republic of Singapore, which is also the Company’s ultimate holding company. Related companies in these financial statements refer to members of the Company’s group of companies. Transactions between the Company and its subsidiaries, which are related companies of the Company, have been eliminated on consolidation and are not disclosed in this note. The intercompany balances are unsecured, interest-free and repayable on demand unless otherwise stated. The Company’s non-trade amounts due from subsidiaries are substantially denominated in US dollars. The Company’s non-trade amount due to a subsidiary is substantially denominated in HK dollars.
86
YANLORDLAND 2008 ANNUAL REPORT
Notes to Financial Statements December 31, 2008 6
OTHER RELATED PARTY TRANSACTIONS Related parties are entities with common direct or indirect shareholders and/or directors. Parties are considered to be related if one party has the ability to control the other party or exercise significant influence over the other party in making financial and operating decisions. Some of the Group’s transactions and arrangements are with related parties and the effect of these on the basis determined between the parties is reflected in these financial statements. The balances with related parties are unsecured, interest-free and repayable on demand unless otherwise stated. The nontrade amount due to a shareholder of $2.7 million bore floating interest of 6.5% (2% plus cost of fund of bank) per annum. The Group’s and Company’s balances with related parties are substantially denominated in the functional currencies of the respective entities. During the year, the Group entered into the following transactions with related parties: GROUP 2008 $’000
2007 $’000
(2,341)
(1,969)
–
(20)
Sales of properties to a minority shareholder of a subsidiary
(3,632)
–
Sales of properties to related parties
(5,115)
(214)
895
–
3,705
1,912
Rental expense to a related party
938
1,005
Consultancy fee to a minority shareholder of a subsidiary
857
659
12
–
Interest income from minority shareholders of subsidiaries Other income from a related party
Interest expense to a shareholder Interest expense to minority shareholders of subsidiaries
Other expense to a related party Compensation of directors and key management personnel
The remuneration of directors and other members of key management during the year was as follows: GROUP
Short-term benefits Post-employment benefits Equity-settled share-based payments
2008 $’000
2007 $’000
8,989
9,726
52
68
409
780
9,450
10,574
87
YANLORDLAND 2008 ANNUAL REPORT
Notes to Financial Statements December 31, 2008 7
PROPERTY, PLANT AND EQUIPMENT Leasehold land and Motor buildings vehicles $’000 $’000
Furniture, fixtures and Construction equipment in progress $’000 $’000
Total $’000
GROUP Cost: At January 1, 2007 Arising from acquisition of subsidiaries Additions Reclassification Transfer from construction in progress Disposals Currency realignment At December 31, 2007 Additions Transfer from properties under development for sale Disposals Currency realignment At December 31, 2008
19,894
7,028
6,513
1,291
34,726
–
94
8
–
102
44
2,057
3,048
–
5,149
6
152
(158)
–
–
316
–
–
(316)
–
–
(198)
(45)
–
(243)
(116)
134
55
25
98
20,144
9,267
9,421
1,000
39,832
802
2,277
5,851
–
8,930
4,792
–
–
–
4,792
(6)
(298)
(101)
–
(405)
700
509
482
58
1,749
26,432
11,755
15,653
1,058
54,898
1,267
2,873
3,978
–
8,118
Accumulated depreciation: At January 1, 2007 Arising from acquisition of subsidiaries
–
58
6
–
64
Depreciation for the year
819
1,271
985
–
3,075
Reclassification
(15)
2
13
–
–
–
(135)
(37)
–
(172)
(12)
55
35
–
78
2,059
4,124
4,980
–
11,163
794
2,098
1,409
–
4,301
–
53
(53)
–
–
(5)
(238)
(83)
–
(326)
105
293
284
–
682
2,953
6,330
6,537
–
15,820
At end of year
23,479
5,425
9,116
1,058
39,078
At beginning of year
18,085
5,143
4,441
1,000
28,669
Eliminated on disposals Currency realignment At December 31, 2007 Depreciation for the year Reclassification Eliminated on disposals Currency realignment At December 31, 2008 Carrying amount:
88
YANLORDLAND 2008 ANNUAL REPORT
Notes to Financial Statements December 31, 2008 8
INVESTMENT PROPERTIES GROUP 2008 $’000
2007 $’000
219,901
105,702
Transfer from properties under development for sale
14,752
75,398
Transfer from completed properties for sale
17,142
–
Change in fair value (Note 24)
81,220
39,634
Currency realignment
15,512
2,126
Disposals
(1,203)
(2,959)
347,324
219,901
At fair value: Balance as at beginning of year
Balance as at end of year
The investment properties are stated at valuation based on the professional valuation carried out by an independent valuer, CB Richard Ellis Limited Hong Kong, for all investment properties as at December 31, 2008 and 2007 by making reference to both the comparable sales transactions as available in the relevant market of these properties and the capitalisation of the existing and reversionary rental income potential. As at December 31, 2008, the investment properties amounting to $30.5 million (2007 : $108.6 million) were pledged to banks to secure the bank loans granted to the Group. (Note 19) The rental income earned by the Group from its investment properties under operating leases amounted to $3.1 million (2007 : $0.7 million). Direct operating expenses arising on the investment properties in the year amounted to $0.2 million (2007 : $0.03 million).
9
PROPERTIES FOR DEVELOPMENT/PROPERTIES UNDER DEVELOPMENT FOR SALE/COMPLETED PROPERTIES FOR SALE GROUP 2008 $’000
2007 $’000
Properties for development (Non-current assets)
2,150,667
1,443,124
Properties under development for sale (Current assets)
1,246,708
1,067,147
506,244
117,484
3,903,619
2,627,755
At cost:
Completed properties for sale (Current assets)
a)
Properties for development, properties under development for sale and completed properties for sale are located in the PRC.
89
YANLORDLAND 2008 ANNUAL REPORT
Notes to Financial Statements December 31, 2008 9
PROPERTIES FOR DEVELOPMENT/PROPERTIES UNDER DEVELOPMENT FOR SALE/COMPLETED PROPERTIES FOR SALE (Cont’d) b)
Up to December 31, 2008, total interest capitalised are as follows: GROUP 2008 $’000
2007 $’000
Properties for development
50,268
16,478
Properties under development for sale
49,079
16,587
Completed properties for sale
22,134
4,049
The capitalisation rate is disclosed in Notes 19 and 20.
10
INVESTMENTS IN SUBSIDIARIES COMPANY
Unquoted equity shares, at cost
2008 $’000
2007 $’000
515,319
515,319
Details of the Company’s subsidiaries at December 31, 2008 are as follows: Country of incorporation (or registration) and operation
Name of subsidiary
Proportion of ownership interest and voting power held
Principal activity
2008 %
2007 %
Singapore
100
100
Investment holding
Singapore
100
100
Investment holding
Hong Kong
100
100
Investment holding
Held by the Company Yanlord Commercial Property Investments Pte. Ltd. (a) 仁恒商业地产投资有限公司 Yanlord Land Pte. Ltd. 仁恒置地有限公司
(a)
Yanlord Land (HK) Co., Ltd. 仁恒地产(香港)有限公司
90
(b)
YANLORDLAND 2008 ANNUAL REPORT
Notes to Financial Statements December 31, 2008 10
INVESTMENTS IN SUBSIDIARIES (Cont’d) Country of incorporation (or registration) and operation
Name of subsidiary
Proportion of ownership interest and voting power held
Principal activity
2008 %
2007 %
Singapore
67
67
Investment holding
Singapore
60
60
Investment holding
Singapore
95
95
Investment holding
Hong Kong
100
100
Investment holding
Hong Kong
100
100
Management service
Chengdu Everrising Asset Management Co., Ltd. (b) 成都市恒业东升资产经营管理 有限公司
PRC
51
51
Property development and investment
Chengdu Yanlord Investment Management Co., Ltd. (1) (b) 成都仁恒投资管理有限公司
PRC
100
–
Management service and investment
Chengdu Yanlord Property Management Co., Ltd. (b) 成都仁恒物业管理有限公司
PRC
100
100
Property management
Yanlord Land (Chengdu) Co., Ltd. (b) 仁恒置地(成都)有限公司
PRC
100
100
Property development
Guiyang Yanlord Property Co., Ltd. (b) 貴阳仁恒房地产开发有限公司
PRC
67
67
Property development
Guiyang Yanlord Property Management Co., Ltd. (b) 貴阳仁恒物业管理有限公司
PRC
67
54
Property management
Held by Yanlord Land Pte. Ltd. and its subsidiaries Palovale Pte Ltd 柏龙威有限公司
(a)
Yanlord Property Pte. Ltd. 仁恒地产有限公司
(a)
Yanlord Real Estate Pte. Ltd. 仁恒置业发展有限公司 East Hero Investment Ltd. 东亨投资有限公司
(a)
(b)
Singapore Yanlord Land (HK) Ltd. (b) 新加坡仁恒地产(香港)有限公司
91
YANLORDLAND 2008 ANNUAL REPORT
Notes to Financial Statements December 31, 2008 10
INVESTMENTS IN SUBSIDIARIES (Cont’d)
Name of subsidiary
Country of incorporation (or registration) and operation
Proportion of ownership interest and voting power held 2008 %
2007 %
Principal activity
Held by Yanlord Land Pte. Ltd. and its subsidiaries (Cont’d) Nanjing Yanlord Development Co., Ltd. (b) 南京仁恒置地房产开发有限公司
PRC
100
100
Property development
Nanjing Yanlord Property Management Co., Ltd. (b) 南京仁恒物业管理有限公司
PRC
100
100
Property management
Nanjing Yanlord Real Estate Co., Ltd. (b) 南京仁恒置业有限公司
PRC
60
60
Property development
Yanlord Investment (Nanjing) Co., Ltd. (b) 仁恒投资(南京)有限公司
PRC
100
100
Property development and investment
Shenzhen Long Wei Xin Investment Co., Ltd. (b) 深圳市龙威信投资实业有限公司
PRC
75
75
Property development
Yanlord Land (Shenzhen) Co., Ltd. (b) 仁恒置地(深圳)有限公司
PRC
100
100
Management service
Shanghai Hong Ming Ge Food & Beverage Service Management Co., Ltd. (b) 上海宏名阁餐饮服务管理有限公司
PRC
60
60
Restaurant operation
Shanghai Pudong New District Private Yanlord Kindergarten (2) (b) 上海市浦东新区民办仁恒幼儿园
PRC
50
50
Kindergarten operation
Shanghai Renjie Hebin Garden Property Co., Ltd. (3) (b) 上海仁杰河滨园房地产有限公司
PRC
34
34
Property development
Shanghai Yanlord Gaoqiao Property Co., Ltd. (2) (b) 上海仁恒高乔房地产有限公司
PRC
50
50
Property development
92
YANLORDLAND 2008 ANNUAL REPORT
Notes to Financial Statements December 31, 2008 10
INVESTMENTS IN SUBSIDIARIES (Cont’d)
Name of subsidiary
Country of incorporation (or registration) and operation
Proportion of ownership interest and voting power held 2008 %
2007 %
Principal activity
Held by Yanlord Land Pte. Ltd. and its subsidiaries (Cont’d) Shanghai Yanlord Investment Management Co., Ltd. (1) (b) 上海仁恒投资管理有限公司
PRC
67
–
Management service and investment
Shanghai Yanlord Property Co., Ltd. (4) (b) 上海仁恒房地产有限公司
PRC
67
67
Property development
Shanghai Yanlord Property Management Co., Ltd. (b) 上海仁恒物业管理有限公司
PRC
67
67
Property management
Shanghai Yanlord Real Estate Co., Ltd. (b) 上海仁恒置业发展有限公司
PRC
56
56
Property development
Shanghai Yanlord Yangpu Property Co., Ltd. (1) (b) 上海仁恒杨浦房地产有限公司
PRC
67
–
Property development
Yanlord Land Investment Management (Shanghai) Co., Ltd. (b) 仁恒置地投资管理(上海)有限公司
PRC
100
100
Management service
Suzhou Yinghan Property Development Co., Ltd. (b) 苏州鷹汉房地产开发有限公司
PRC
100
100
Property development
Suzhou Zhonghui Property Development Co., Ltd. (b) 苏州中辉房地产开发有限公司
PRC
100
100
Property development
Yanlord Property (Suzhou) Co., Ltd. (b) 仁恒地产(苏州)有限公司
PRC
100
100
Property development
Tianjin Yanlord Haihe Development Co., Ltd. (b) 天津仁恒海河开发有限公司
PRC
80
–(5)
Property development
93
YANLORDLAND 2008 ANNUAL REPORT
Notes to Financial Statements December 31, 2008 10
INVESTMENTS IN SUBSIDIARIES (Cont’d)
Name of subsidiary
Country of incorporation (or registration) and operation
Proportion of ownership interest and voting power held 2008 %
2007 %
Principal activity
Held by Yanlord Land Pte. Ltd. and its subsidiaries (Cont’d) Tianjin Yanlord Property Management Co., Ltd. (1) (b) 天津仁恒物业服务有限公司
PRC
100
–
Property management
Yanlord Commercial Investment (Tianjin) Co., Ltd. (1) (b) 仁恒商业投资(天津)有限公司
PRC
100
–
Management service and investment
Yanlord Development (Tianjin) Co., Ltd. (b) 仁恒发展(天津)有限公司
PRC
100
100
Property development
Zhuhai Yanlord Industrial Co., Ltd. (b) 珠海仁恒实业有限公司
PRC
95
95
Property development
Zhuhai Yanlord Property Management Co., Ltd. (b) 珠海仁恒物业管理有限公司
PRC
90
90
Property management
Zhuhai Yanlord Real Estate Development Co., Ltd. (b) 珠海仁恒置业发展有限公司
PRC
90
90
Property development
(1)
Incorporated during the year.
(2)
The proportion of ownership interest and voting power held is 50.25%.
(3)
Although the Group does not effectively own more than 50% of the equity shares of this entity, it has control over the financial and operating policies of this entity as this is majority owned by the subsidiary. Accordingly, this entity is regarded as a subsidiary.
(4)
Pursuant to the shareholder agreement signed in 2007, a subsidiary of the Company, Yanlord Land Pte. Ltd., commited to acquire the remaining interest in a subsidiary, Shanghai Yanlord Property Co., Ltd. (SYP). Yanlord Land Pte. Ltd. injected additional capital of US$99.0 million into SYP in 2007 (as part of the payment to increase ownership interest in SYP) and paid a further RMB72.2 million to the minority shareholder of SYP representing the minority shareholder’s share of reserves. The additional capital injected into SYP was utilised in acquisition of land and development of a new project in which the minority shareholder of SYP is not entitled to share the returns in accordance with the shareholder agreement. Upon payment of total consideration of $30.1 million in future, SYP will become a wholly-owned subsidiary of the Company.
(5)
Transferred from available-for-sale investments during the year (Notes 11 and 31).
94
YANLORDLAND 2008 ANNUAL REPORT
Notes to Financial Statements December 31, 2008 10
INVESTMENTS IN SUBSIDIARIES (Cont’d) Notes on auditors
11
(a)
Audited by Deloitte & Touche LLP, Singapore.
(b)
Audited by Deloitte Touche Tohmatsu, Shanghai for consolidation purposes.
AVAILABLE-FOR-SALE INVESTMENTS GROUP
Unquoted equity shares, at cost
2008 $’000
2007 $’000
10,445
52,384
The investments included above represent investments in unquoted equity shares that present the Group with opportunity for return through dividend income and capital appreciation. The management of the Company is of the view that the fair value of unquoted equity shares cannot be measured reliably as the range of reasonable fair value estimates is significant and the probabilities of the various estimates cannot be reasonably assessed. Accordingly, these investments are stated at cost. During the year, an available-for-sale investment amounting to $42.2 million was transferred to investments in subsidiaries (Note 31). The available-for-sale investments are denominated in the functional currencies of the respective entities. The management has evaluated whether there is any indicator of impairment for unquoted equity shares carried at cost, by considering both internal and external sources of information, and is satisfied that there is no such indicator.
12
INTANGIBLE ASSET GROUP 2008 $’000 Club membership
128
2007 $’000 –
At December 31, 2008, management assessed the marketable value of the club membership and determined that it was in excess of its carrying amount.
95
YANLORDLAND 2008 ANNUAL REPORT
Notes to Financial Statements December 31, 2008 13
DEFERRED TAXATION GROUP
Deferred tax assets Deferred tax liabilities
2008 $’000
2007 $’000
5,637 (46,640) (41,003)
6,849 (23,926) (17,077)
The following are the major deferred tax assets and liabilities recognised by the Group and movements thereon during the current and prior reporting year.
GROUP At January 1, 2007 (Charge) credit to profit and loss statement for the year (Note 26) Exchange differences At December 31, 2007 Charge to profit and loss statement for the year (Note 26) Exchange differences At December 31, 2008
Revaluation of investment properties $’000
Temporary difference between depreciation and tax deduction $’000
Tax loss $’000
Total $’000
(17,412)
363
5,795
(11,254)
(6,164) (350) (23,926)
(350) (71) (58)
925 187 6,907
(5,589) (234) (17,077)
(20,702) (2,012) (46,640)
(2) – (60)
(1,458) 248 5,697
(22,162) (1,764) (41,003)
Pursuant to PRC tax regulations, at the balance sheet date, the Group has unutilised tax losses of $44.5 million (2007 : $43.4 million) available for offset against future profits. A deferred tax asset has been recognised in respect of $22.7 million (2007 : $27.0 million) of such losses. No deferred tax asset has been recognised in respect of the remaining $21.8 million (2007 : $16.4 million) due to the unpredictability of future profit streams. Tax losses may be carried forward for 5 years subject to the conditions imposed by law including the retention of majority shareholders as defined.
96
YANLORDLAND 2008 ANNUAL REPORT
Notes to Financial Statements December 31, 2008 14
OTHER RECEIVABLES AND DEPOSITS GROUP 2008 $’000 Advances to suppliers Deposits for construction of properties and purchase of land for development Staff loans Prepayments (1) Sales tax prepayments Interest receivables Other receivables (2)
2007 $’000
COMPANY 2008 2007 $’000 $’000
1,669
1,108
–
–
10,522 2,269 129 1,034 – 26,300 41,923
6,823 2,178 684 4,603 44 36,056 51,496
– – – – – – –
– – 588 – – – 588
(1)
Included in prepayments is non-audit fees paid to the auditors of the Company of $Nil (2007 : $256,226) in connection with the fund-raising exercise of the Company.
(2)
Included in other receivables is an advance of $14.8 million (2007 : $14.0 million) to a PRC government agent for the resettlement of occupants relating to land which the Group intends to purchase. The advance is unsecured, interest-free and repayable within 6 months from the date of advance unless extension is mutually agreed or the resettlement of occupants is not completed. Other receivables in 2007 included an advance to a third party in connection with completion of the land title procedure amounting to $10.0 million, which was unsecured, bore interest based on market rate and repayable within 6 months from the date of advance.
The credit risk on other receivables and deposits is limited because the counterparties are government agent or third parties with long business relationships with the Group. The other receivables and deposits are substantially denominated in the functional currencies of the respective entities.
15
NON-TRADE AMOUNTS DUE FROM/TO MINORITY SHAREHOLDERS OF SUBSIDIARIES Amounts due from minority shareholders of subsidiaries are unsecured, interest free and repayable on demand except for the following: a)
An amount of $21.2 million (2007 : $20.0 million) which bore interest at 8.2% (2007 : 7.3%) per annum and is secured by undistributed retained earnings of a subsidiary yet to be distributed as dividends to the minority shareholder of that subsidiary.
b)
An amount of $1.9 million (2007 : Nil) which bore interest at 4.0% per annum.
c)
Total amount of $14.8 million (2007 : Nil) which bore interest at 7.5% per annum and is secured by future dividend distributions by a subsidiary to the minority shareholders of that subsidiary.
Amounts due to minority shareholders of subsidiaries are unsecured, interest free and repayable on demand except for a non-current amount of $69.6 million in 2008 which bore interest at 8.3% per annum and repayable within 3 years and a current amount of $26.6 million in 2007 which bore interest at 6.9% per annum.
97
YANLORDLAND 2008 ANNUAL REPORT
Notes to Financial Statements December 31, 2008 15
NON-TRADE AMOUNTS DUE FROM/TO MINORITY SHAREHOLDERS OF SUBSIDIARIES (Cont’d) The carrying amounts of amounts due from/to minority shareholders of subsidiaries approximate their fair values due to the relatively short term maturity of interest-free balances or the interest rates approximate the prevailing market rates. Non-trade amounts due to minority shareholders of subsidiaries are denominated in the functional currencies of respective entities. The non-trade amounts due from minority shareholders of subsidiaries that are not denominated in the functional currencies of the respective entities are as follows: GROUP 2008 $’000 HK dollars RMB
16
COMPANY 2007 $’000
2008 $’000
2007 $’000
2,025
–
–
–
15,443
–
–
–
HELD-FOR-TRADING INVESTMENTS GROUP 2008 $’000 Quoted equity securities, at fair value
1,101
2007 $’000 3,323
Held-for-trading investments present the Group with opportunities for return through dividend income and fair value gains. These investments have no fixed maturity or coupon rate. The fair values of these securities are based on closing quoted market price on the last market day of the financial year. The held-for-trading investments are denominated in HK dollars.
17
CASH AND BANK BALANCES AND PLEDGED BANK DEPOSITS GROUP 2008 $’000 Cash on hand Cash at bank Fixed deposits Cash and cash equivalents Pledged bank deposits
98
YANLORDLAND 2008 ANNUAL REPORT
COMPANY 2007 $’000
2008 $’000
2007 $’000
396
533
–
–
323,342
448,482
380
140
52,003
253,842
–
93,319
375,741
702,857
380
93,459
8,272
3,155
–
–
Notes to Financial Statements December 31, 2008 17
CASH AND BANK BALANCES AND PLEDGED BANK DEPOSITS (Cont’d) Pledged bank deposits, cash and bank balances comprise cash held by the Group and short term bank deposits with an original maturity of 6 months or less. The carrying amounts of these assets approximate their fair values. The effective interest rates for fixed deposits and pledged bank deposits are 1.5% (2007 : 3.0%) and 4.3% (2007 : 3.4%) per annum respectively. Pledged bank deposits represent deposits pledged to banks to secure bank loans and as securities for construction contracts required by certain local authorities. The cash and bank balances that are not denominated in the functional currencies of the respective entities are as follows: GROUP
US dollars
18
COMPANY
2008 $’000
2007 $’000
18,760
109,647
2008 $’000
2007 $’000
66
51,724
SHARE CAPITAL GROUP AND COMPANY 2008 2007 ’000 ’000 Number of ordinary shares
2008 $’000
2007 $’000
Issued and paid up: At beginning of year
1,825,814
1,624,523
1,219,081
780,175
Issuance of shares pursuant to international offerings exercise, net of expenses
–
150,000
–
299,213
Conversion of convertible notes
–
51,291
–
139,693
Issuance of shares under Pre-IPO Share Option Scheme At end of year
5,520
–
7,087
–
1,831,334
1,825,814
1,226,168
1,219,081
In 2007, 51,291,000 ordinary shares were issued pursuant to the conversion of convertible notes. As the convertible notes have been accounted for as a compound instrument comprising of liability and equity components, the value of issued share capital upon conversion comprises the liability component and equity component of $120,312,000 and $19,381,000 respectively. Fully paid up ordinary shares, which have no par value, carry one vote per share and carry a right to dividends.
99
YANLORDLAND 2008 ANNUAL REPORT
Notes to Financial Statements December 31, 2008 19
BANK LOANS GROUP 2008 $’000
2007 $’000
The bank loans are repayable as follows: On demand or within one year
347,339
147,068
More than one year but not exceeding two years
662,160
146,844
More than two years but not exceeding five years
167,206
379,096
1,176,705
673,008
Less: Amount due for settlement within 12 months (shown under current liabilities)
(347,339)
(147,068)
Amount due for settlement after 12 months
829,366
525,940
– Current bank loans
254,979
114,052
– Non-current bank loans
461,537
164,075
716,516
278,127
460,189
394,881
1,176,705
673,008
Secured
Unsecured
The above secured bank loans are pledged on the following: GROUP 2008 $’000
2007 $’000
Properties for development
386,123
253,776
Properties under development for sale
777,548
619,256
Completed properties for sale
197,871
19,278
Investment properties
30,478
108,550
Leasehold land and buildings
10,133
–
2,704
–
Bank deposits
The bank loans that are not denominated in the functional currencies of the respective entities are as follows: GROUP
HK dollars
100
YANLORDLAND 2008 ANNUAL REPORT
2008 $’000
2007 $’000
288,121
289,832
Notes to Financial Statements December 31, 2008 19
BANK LOANS (Cont’d) In 2008, the bank loans for the purpose of property development, amounting to $288.1 million (2007 : $289.8 million) bear floating interest rate (1.5% to 1.6% plus HIBOR rate of the bank) of 5.09% to 5.13% (2007 : 5.3% to 5.4%) per annum due in 2009 and 2010. The other bank loans which are for the purpose of property development, bear floating interest rate based on a bank’s prime rate and the average effective interest rate was 7.2% (2007 : 6.9%) per annum. The carrying amounts of bank loans approximate their fair values as the interest rates approximate the prevailing market rates.
20
CONVERTIBLE NOTES The convertible notes were issued on February 6, 2007. The convertible notes will mature on February 6, 2012. The convertible notes accrue interest at 4.00% per annum, compounded semi-annually. Accrued interest on a convertible notes is payable only at maturity or upon early redemption, and will be foregone upon conversion of the convertible notes. The conversion price was initially $2.7531 per share, and has been adjusted to $2.7100 on account of the dividend distributions for the financial year ended December 31, 2006. The conversion price may be further adjusted for certain specified dilutive events. The notes are convertible into 124,815,535 new ordinary shares of the Company as at December 31, 2008 and 2007 based on the adjusted conversion price at the option of the holders. The net proceeds received from the issue of the convertible notes have been allocated between the liability component and the equity component which represents the fair value of the embedded option to convert the liability into equity: GROUP AND COMPANY 2008 $’000
2007 $’000
Nominal value of convertible notes issued
477,250
477,250
Equity component (gross)
(69,063)
(69,063)
Transaction costs *
(14,877)
(14,877)
Liability component at date of issue
393,310
393,310
50,564
26,197
Converted to equity
(120,312)
(120,312)
Liability component at end of year
323,562
299,195
Cumulative interest charged
*
Transaction costs included non-audit fees of $252,430 paid to the auditors of the Company in 2007 in connection with the international offering of shares and convertible notes exercise of the Company.
The interest charged for the year is calculated by applying an effective interest rate of 8.0% per annum to the liability component for the twelve-month (2007 : eleven-month) period since the convertible notes were issued.
101
YANLORDLAND 2008 ANNUAL REPORT
Notes to Financial Statements December 31, 2008 20
CONVERTIBLE NOTES (Cont’d) The management estimates the fair value of the liability component of the convertible notes at December 31, 2008 to be approximately $185.4 million (2007 : $273.2 million). This fair value has been calculated by assuming redemption on February 6, 2012 and using interest rate of 27.6% (2007 : 10.3%) per annum, compounded semi-annually. The interest rate is based on Singapore government’s two-year treasury bill rate of 3.1% (2007 : five-year treasury bill rate of 2.5%) per annum which matured on February 1, 2011, a credit spread risk margin of 19.6% (2007 : 5.6%) per annum and holding the liquidity risk rate as a percentage of both the risk free rate and the liquidity risk rate constant. The convertible notes are denominated in the functional currency of the Company.
21
TRADE PAYABLES GROUP
Outside parties
2008 $’000
2007 $’000
335,511
311,565
The average credit period for trade payables is 116 days (2007 : 108 days). The trade payables are substantially denominated in the functional currencies of the respective entities.
22
OTHER PAYABLES GROUP
Advances received from buyers Accrued expenses Other payables
COMPANY
2008 $’000
2007 $’000
2008 $’000
2007 $’000
129,498
242,270
–
–
6,302
4,369
463
462
87,990
28,756
–
332
223,790
275,395
463
794
The other payables are substantially denominated in the functional currencies of the respective entities.
102
YANLORDLAND 2008 ANNUAL REPORT
Notes to Financial Statements December 31, 2008 23
REVENUE GROUP 2008 $’000
2007 $’000
1,033,156
1,273,852
Less: Business tax
(52,173)
(64,258)
Net income from sale of properties in the PRC
980,983
1,209,594
Property management fee income
17,404
11,059
Less: Business tax
(1,140)
(1,032)
Net property management fee income
16,264
10,027
Rental and other service income
10,860
8,787
(890)
(476)
9,970
8,311
1,007,217
1,227,932
Gross income from sale of properties in the PRC
Less: Business tax Net rental and other service income Total
24
OTHER OPERATING INCOME GROUP 2008 $’000 Interest income
2007 $’000
7,957
21,236
–
1,721
81,220
39,634
3,115
2,257
27
73
–
299
11
–
Net gain on disposal of held-for-trading investments
–
4,123
Net gain on disposal of investment properties
–
361
4,038
6,352
Government subsidies
8,132
4,230
Others
7,914
3,583
112,414
83,869
Fair value gain on held-for-trading investments Fair value gain on investment properties (Note 8) Dividend income from an available-for-sale investment Dividend income from held-for-trading investments Doubtful debts recovered Net gain on disposal of property, plant and equipment
Tax subsidies
Total (1)
(1)
Pursuant to relevant laws and regulations in the PRC, a subsidiary, being the investor of the subsidiaries in the PRC, received tax refunds from the tax bureau of the PRC because the Group has increased its investment in the PRC subsidiaries by way of capitalising the accumulated profits of those subsidiaries.
103
YANLORDLAND 2008 ANNUAL REPORT
Notes to Financial Statements December 31, 2008 25
FINANCE COST GROUP 2008 $’000
2007 $’000
Interest on bank loans
71,827
26,549
Interest on convertible notes
24,367
26,197
895
–
3,705
1,912
100,794
54,658
– properties under development for sale
(62,834)
(23,163)
– properties for development
(33,221)
(16,144)
4,739
15,351
Interest expense to a shareholder Interest expense to minority shareholders of subsidiaries Total Less: Interest capitalised in
Net
26
INCOME TAX GROUP 2008 $’000
2007 $’000
Current – Foreign
69,126
66,636
Deferred (Note 13)
22,162
5,589
174,728
128,181
Withholding tax
385
–
Under provision in prior years
526
481
266,927
200,887
Land appreciation tax (“LAT”)
Net
No provision for Singapore taxation has been made as the majority of the Group’s income neither arises in, nor is derived from Singapore. Taxation arising in the PRC is calculated at the prevailing rate of 18% (2007 : 15%) for major operating subsidiaries. The prevailing rate in the other subsidiaries is at 10% to 25% (2007 : 15% to 33%). On March 16, 2007, the PRC promulgated the Law of the PRC on Enterprise Income Tax (“New Law”) by Order No.63 of the President of the PRC, with an effective date of January 1, 2008. On December 28, 2007, the State Council of the PRC issued Implementation Regulations of the New Law. Due to the New Law and Implementation Regulations, the PRC subsidiaries will be subject to 25% Enterprise Income Tax, commencing January 1, 2008 except that certain subsidiaries which originally enjoy the preferential tax rates shall gradually transit to the tax rate of 25% within 5 years after the enforcement of the new tax law.
104
YANLORDLAND 2008 ANNUAL REPORT
Notes to Financial Statements December 31, 2008 26
INCOME TAX (Cont’d) The income tax expense varied from the amount of income tax expense determined by applying the above income tax rate to profit before income tax as a result of the following differences: GROUP 2008 $’000
2007 $’000
104,559
80,639
Non-deductible items
3,265
207
Non-taxable items
(1,124)
(428)
Effect of unutilised tax losses not recognised as deferred tax assets
1,585
2,522
15,045
9,073
Income tax expense at PRC applicable tax rate of 18%* (2007 : 15%*)
Effect of different tax rates for certain subsidiaries Effect of LAT
143,277
108,954
Withholding tax
385
–
Under provision in prior years
526
481
Others
(591)
(561)
266,927
200,887
Total income tax expense *
These are the applicable tax rates for most of the Group’s taxable profits.
Income tax for overseas subsidiaries is calculated at the rates prevailing in the respective jurisdictions. LAT There is no significant development in LAT ruling and interpretation in 2007 and 2008. As previously disclosed in prior years’ audited consolidated financial statements, the directors of the Company, after taking into account legal advice received and consulting the local Shanghai Pudong Tax Bureau, are of the opinion that the relevant tax authority is not likely to impose any LAT on a retrospective basis. Accordingly, no provision has been made in respect of those properties sold in Pudong New District prior to October 1, 2006. If LAT was to be levied on the Group’s Shanghai Pudong New District properties in accordance with the Provisional Regulations on a retrospective basis, the Group would have incurred additional LAT in the aggregate amount of $111.6 million for the financial periods prior to October 1, 2006, as adjusted for minority interests and for income tax deductions. Should any of these exposures materialise, the Group’s current year net profit will be impacted by the same amount. The management of the Company is of the view that the actual LAT payable as required under the Provisional Regulations approximates the amount of LAT actually paid and accrued by the Group for the PRC subsidiaries as at December 31, 2008. The actual Group’s LAT liabilities are subject to the determination by the tax authorities upon completion of the property development projects and are subject to the specific implementation rules or measures mentioned above.
105
YANLORDLAND 2008 ANNUAL REPORT
Notes to Financial Statements December 31, 2008 27
PROFIT FOR THE YEAR Profit for the year has been arrived at after charging (crediting): GROUP 2008 $’000 Depreciation of property, plant and equipment
(1)
2007 $’000
4,301
3,075
Equity-settled share-based payments
1,148
2,290
Retirement benefit scheme contributions
2,602
2,226
Salaries and other short-term benefits
40,901
36,849
Total employee benefits expense
44,651
41,365
400
620
4,332
5,422
700
550
5,032
5,972
Employee benefits expense (including directors’ remuneration):
Directors’ fees Directors’ remuneration: – of the Company – of the subsidiaries
GROUP 2008 $’000
2007 $’000
(1,498)
(3,445)
(Gain) loss on acquisition of additional interest from a minority shareholder
(15)
37
Goodwill written off (Note 31)
632
–
2,155
(1,721)
Net (gain) loss on disposal of property, plant and equipment
(11)
28
Net loss (gain) on disposal of investment properties
109
(361)
423,399
670,206
– paid to auditors of the Company
45
103
– paid to other auditors
95
202
Net foreign exchange gains
Fair value loss (gain) on held-for-trading investments
Cost of completed properties for sale recognised as expenses Non-audit fees:
(1)
106
For 2008, $401,000 (2007 : $289,000) of depreciation of property, plant and equipment is capitalised in properties for development and properties under development for sale.
YANLORDLAND 2008 ANNUAL REPORT
Notes to Financial Statements December 31, 2008 28
EARNINGS PER SHARE The calculation of the basic and diluted earnings per share attributable to the ordinary equity holders of the Company is based on the following data: GROUP 2008 $’000
2007 $’000
225,841
221,500
2,437
14,366
228,278
235,866
Earnings Earnings for the purposes of basic earnings per share (profit for the year attributable to equity holders of the Company) Effect of dilutive potential ordinary shares: Interests on convertible notes Earnings for the purposes of diluted earnings per share
GROUP 2008 $’000
2007 $’000
1,828,002
1,769,478
5,283
9,159
124,815
165,947
1,958,100
1,944,584
Basic
12.35
12.52
Diluted
11.66
12.13
Number of shares Weighted average number of ordinary shares for the purposes of basic earnings per share Effect of dilutive potential ordinary shares: Share options Convertible notes Weighted average number of ordinary shares for the purposes of diluted earnings per share Earnings per share (cents):
29
DIVIDENDS For the financial year ended December 31, 2007, the directors declared that a first and final one-tier tax exempt dividend of 1.21 cents per ordinary share amounting to $22,092,355, which was paid during 2008. In 2007, $51,283,715 of dividend was paid in respect of a first and final one-tier tax exempt dividend of 2.89 cents per ordinary share declared for the year ended December 31, 2006. In respect of the current year, the directors proposed a first and final one-tier tax exempt dividend of 1.23 cents per ordinary share amounting to $22,525,414. The dividend is subject to approval by shareholders at the Annual General Meeting and has not been included as a liability in these financial statements.
107
YANLORDLAND 2008 ANNUAL REPORT
Notes to Financial Statements December 31, 2008 30
SEGMENT INFORMATION The Group’s operations are located in the PRC and substantially the Group’s revenue and contribution to profit from operations are derived from residential property development and sales. Accordingly, no analysis by business segment and geographical area of operations are provided.
31
ACQUISITION OF SUBSIDIARIES On April 2, 2008, a subsidiary of the Company, Yanlord Development (Tianjin) Co., Ltd. (“YDT”), acquired an additional shareholding interest of 70.6% in Tianjin Yanlord Haihe Development Co., Ltd. (“TYHD”) for a total cash consideration of approximately $317.7 million (RMB1,599.2 million), which includes commitment for capital injection of $138.9 million (RMB699.2 million) in future as included in Note 34 to the financial statements. Following the acquisition, the Group’s shareholding in TYHD held though YDT increased from 9.4% to 80.0%. This transaction has been accounted for by the purchase method of accounting. On September 25, 2007, a subsidiary of the Company, Yanlord Land Pte. Ltd., acquired a whollyowned subsidiary, incorporated in Hong Kong, East Hero Investment Ltd. (“East Hero”), for a total cash consideration of approximately $48.3 million (RMB238.7 million). At the time of acquisition, East Hero held 75% shareholding interest in Shenzhen Long Wei Xin Investment Co., Ltd., a company incorporated in the PRC. This transaction had been accounted for by the purchase method of accounting. The net assets acquired in the transaction are as follows: Carrying amount before Fair value acquisition adjustments $’000 $’000
Fair value $’000
2008 Net assets acquired: Properties for development Cash and bank balances Other receivables and deposits
176,944
–
176,944
44,049
–
44,049
8
–
8 221,001
Minority interests
(637)
Goodwill written off (Note 27)
632
Interest in a subsidiary previously accounted for as available-for-sale investments (Note 11)
(42,205)
Total consideration satisfied by cash
178,791
Net cash outflow arising on acquisition: Cash consideration Cash and bank balances of subsidiary acquired
(178,791) 44,049 (134,742)
108
YANLORDLAND 2008 ANNUAL REPORT
Notes to Financial Statements December 31, 2008 31
ACQUISITION OF SUBSIDIARIES (Cont’d) Carrying amount before Fair value acquisition adjustments $’000 $’000
Fair value $’000
2007 Net assets acquired: Property, plant and equipment Properties for development Cash and bank balances Other payables
38
–
38
47,106
64,065
487
–
487
(15,885)
–
(15,885)
16,959
48,705 Minority interests Total consideration
(401) 48,304
Total consideration – satisfied by cash
10,195
– amount payable
38,109 48,304
Net cash outflow arising on acquisitions: Cash consideration Cash and bank balances of subsidiaries acquired
(10,195) 487 (9,708)
The management is of the view that the deferred tax impact on excess of the Group’s interest in the net fair value of the acquired subsidiaries’ identifiable assets, liabilities and contingent liabilities over cost is not significant. The subsidiary acquired during the year contributed $0.005 million loss (2007 : $0.1 million loss) to the Group’s profit for the year for the period between the date of acquisition and the balance sheet date. There is no revenue contributed by the subsidiary acquired (2007 : Nil). If the acquisition had been completed on January 1, total Group’s profit for the year in 2008 would have decreased by $0.8 million to $313.2 million (2007 : decreased by $0.6 million to $336.1 million). There is no impact to total Group revenue. 32
SHARE-BASED PAYMENTS The options under the Scheme grant the right to the holder to subscribe for new ordinary shares of the Company at the discount of fifteen percent (15%) of the IPO offer share price of $1.08. The options granted under the Scheme will be exercisable after the second anniversary of the date of grant of the options and all options must be exercised before the fifth anniversary from the date of grant of the options. The maximum number of shares in respect of which options may be granted under the Scheme shall not exceed 1% of the issued share capital of the Company on the date immediately preceding the Offer Date of the Option.
109
YANLORDLAND 2008 ANNUAL REPORT
Notes to Financial Statements December 31, 2008 32
SHARE-BASED PAYMENTS (Cont’d) Each option grants the holder the right to subscribe for one ordinary share in the Company. The options may be exercised in full or in part thereof. By virtue of the options, the holders do not have the right to participate in any share issue of the other companies in the Group. Options granted are cancelled when the holder is no longer a full time employee of the Company or any corporations in the Group subject to certain exceptions in accordance with the rules of the Scheme. The above share option scheme is administered by a Pre-IPO Share Option Management Committee. Details of the share options outstanding during the year are as follows: GROUP AND COMPANY 2008 Number of share options ’000
2007 Weighted average exercise price $
Weighted average exercise price $
Number of share options ’000
Outstanding at beginning of year
13,032
0.92
13,912
0.92
Exercised during the year
(5,520)
0.92
–
–
(110)
0.92
(880)
0.92
7,402
0.92
13,032
0.92
Lapsed during the year Outstanding at end of year
The options outstanding at end of the year have a weighted average remaining contractual life of 2.5 years (2007 : 3.5 years). The estimated fair values of the options granted on June 21, 2006 were $5.3 million. These fair values for share options granted in 2006 were calculated using the Black-Scholes pricing model. The inputs into the model were as follows: Weighted average share price ($)
1.08
Weighted average exercise price ($)
0.92
Expected volatility
20.04%
Expected life
2
Risk free rate
3.64%
Expected dividend yield
–
Expected volatility was determined by calculating the historical volatility of the Company’s share price over the previous 3 months. The expected life used in the model has been adjusted, based on management’s best estimate, for the effects of non-transferability, exercise restrictions and behavioural considerations. The Group and the Company recognised total expense of $1.1 million (2007 : $2.3 million) related to equitysettled share-based payment transactions during the year.
110
YANLORDLAND 2008 ANNUAL REPORT
Notes to Financial Statements December 31, 2008 33
OPERATING LEASE ARRANGEMENTS The Group as leasee GROUP
Minimum lease payments under operating leases recognised as an expense in the year
2008 $’000
2007 $’000
4,581
3,277
At the balance sheet date, the Group has outstanding commitments under non-cancellable operating leases, which fall due as follows: GROUP 2008 $’000
2007 $’000
Within one year
4,751
4,077
In the second to fifth year inclusive
6,093
5,574
–
52
10,844
9,703
More than five years
Operating lease payments represent rental payables by the Group in respect of land and buildings for its office premises and staff accommodation. Leases are negotiated for an average term of less than two years. The Group as lessor The Group rents out its investment properties and certain completed properties for sale in the PRC under operating leases. Property rental income earned during the year was $4.6 million (2007 : $1.6 million). At the balance sheet date, the Group has contracted with tenants for the following future minimum lease payments: GROUP
Within one year In the second to fifth year inclusive More than five years
2008 $’000
2007 $’000
4,652
1,826
11,545
3,765
3,356
626
19,553
6,217
111
YANLORDLAND 2008 ANNUAL REPORT
Notes to Financial Statements December 31, 2008 34
CAPITAL EXPENDITURE COMMITMENTS Estimated amounts committed for future capital expenditure but not provided for in the financial statements: GROUP 2008 $’000 Construction of properties
510,900
644,217
Acquisition of land use rights
193,741
507,950
Acquisition of shareholding rights
178,084
25,548
4
524
882,729
1,178,239
Others
35
2007 $’000
CONTINGENCY AND GUARANTEES As at December 31, 2008, the Group has provided guarantees of approximately $228.8 million (2007 : $224.3 million) to banks for the benefit of its customers in respect of the mortgage loans provided by the banks to customers for the purchase of the Group’s development properties. Should such guarantees be called upon, there would be an outflow of cash (previously collected by the Group) from the Group to the banks to discharge the obligations. Management has made enquiries with the banks and considered the profile of customers who buy the Group’s properties and concluded that the likelihood of these guarantees being called upon is low. These guarantees provided by the Group to the banks would be released upon receiving the building ownership certificate of the respective properties by the banks from the customers as a pledge for security for the mortgage loan granted. As at December 31, 2008 and 2007, the Company together with six of its subsidiaries has provided a joint guarantee to banks in respect of a banking facility granted to a subsidiary amounting to US$200.0 million (equivalent to $289.3 million) for a term of two years (2007 : three years) up to November 6, 2010. The management is of the view that the fair values of the financial guarantees provided by the Group and the Company are not significant.
36
RETIREMENT BENEFITS SCHEME The relevant PRC subsidiaries are required to make contributions to the state-managed retirement schemes in the PRC based on certain percentage of the monthly salaries of their current employees to fund the benefits. The employees are entitled to retirement pension calculated with reference to their basic salaries on retirement and their length of service in accordance with the relevant government regulations. The only obligation of the PRC subsidiaries with respect to the state-managed schemes is to make the specified contributions. The PRC government is responsible for the pension liability to these retired staff. As at December 31, 2008 and 2007, no contributions in respect of the current reporting years had not been paid to the schemes.
112
YANLORDLAND 2008 ANNUAL REPORT
Notes to Financial Statements December 31, 2008 37
SUBSEQUENT EVENTS Subsequent to year ended December 31, 2008, the Group has through its subsidiary, Yanlord Land Pte. Ltd. (“YLPL”), entered into: a)
A share transfer agreement with Yanlord Property Pte. Ltd. (“YPPL”), a subsidiary with a shareholding ratio of 60:40 held by YLPL and Reco Yizhong Private Limited (“Reco”) respectively, to transfer YLPL’s entire shareholding interest of 100% in Yanlord Property (Suzhou) Co., Ltd. (“YPSuzhou”) to YLPL for a total consideration of approximately $412.0 million. Upon completion of the transfer, the Group’s beneficial interest in YPSuzhou, held through YPPL, will be reduced to 60%.
b)
Another share transfer agreement (“STA”) with Reco to transfer YLPL’s entire shareholding interest of 40% in Shanghai Yanlord Senlan Real Estate Co., Ltd. (“SYSRE”) for a nominal consideration of $2 to Reco. SYSRE was incorporated in 2009 and has a shareholding ratio of 40:60 held by YLPL and Shanghai Yanlord Property Co., Ltd. (“SYP”) respectively before the proposed transfer. In addition, Reco will inject approximately $100.7 million of registered capital into SYSRE within 7 business days from the effective date of legal transfer of the 40% stake. Upon completion of the STA, SYP and Reco will each hold a stake of 60% and 40% respectively in the equity of SYSRE.
113
YANLORDLAND 2008 ANNUAL REPORT
Statement of Directors In the opinion of the directors, the consolidated financial statements of the Group and the balance sheet and statement of changes in equity of the Company set out on pages 58 to 113 are drawn up so as to give a true and fair view of the state of affairs of the Group and of the Company as at December 31, 2008, and of the results, changes in equity and cash flows of the Group and the changes in equity of the Company for the financial year then ended and at the date of this statement, there are reasonable grounds to believe that the Company will be able to pay its debts when they fall due.
ON BEHALF OF THE DIRECTORS
Zhong Sheng Jian
Chan Yiu Ling
March 27, 2009
114
YANLORDLAND 2008 ANNUAL REPORT
Interested Person Transactions The aggregate value of interest person transactions during the financial year under review is as follows:
Name of Interested Person Yanlord Holdings Pte. Ltd.*
Aggregate value of all interested person transactions during the financial year under review (excluding transactions less than S$100,000 and transactions conducted under shareholders’ mandate pursuant to Rule 920) FY2008 S$4,636,359
Aggregate value of all interested person transactions conducted under shareholders’ mandate pursuant to Rule 920 (excluding transaction less than S$100,000) FY2008 Nil
Pretty Honour Investment Limited*
S$5,206,400
Nil
Mrs. Zhong Lin Miao Jun*
S$4,448,449
Nil
S$82,051
Nil
Mr. Zheng Xi* Mr. Hong Zhi Hua and Ms. Hong Lu Qi** Total
S$461,396
Nil
S$14,834,655
Nil
Notes: *
Associates (as defined in the SGX Listing Manual) of Mr. Zhong Sheng Jian, director and controlling shareholder of the Company.
**
Ms. Hong Lu Qi is an associate (as defined in the SGX Listing Manual) of Mr. Hong Zhi Hua, director of the Company.
There was no material contract entered into by the Company and its subsidiaries involving the interests of the chief executive officer or any director or controlling shareholder, either still subsisting at the end of the financial year or entered into since the end of the previous financial year.
Use of Proceeds The proceeds raised by the Company from its concurrent offerings of ordinary shares and convertible notes in February 2007 had been fully utilised as per the Company’s SGXNET announcement dated 13 June 2008.
115
YANLORDLAND 2008 ANNUAL REPORT
Shareholding Statistics As at 16 March 2009
Number of Shares Issued Class of Shares Issued and Paid-up Share Capital
: : :
1,831,334,476 Ordinary shares with equal voting rights S$1,246,942,240
Size of Shareholdings
No. of Shareholders
1 – 999
Percentage (%)
No. of Shares
Percentage (%)
12
0.30
1,474
0.00
1,000 – 10,000
3,040
74.40
14,947,146
0.82
10,001 – 1,000,000
1,013
24.79
45,574,521
2.49
21
0.51
1,770,811,335
96.69
4,086
100.00
1,831,334,476
100.00
No. of Shares
Percentage (%)
1,000,001 and above TOTAL
TWENTY LARGEST SHAREHOLDERS Name of Shareholders HL BANK NOMINEES (SINGAPORE) PTE LTD
698,186,000
38.12
YANLORD HOLDINGS PTE. LTD.
426,580,000
23.29
ABN AMRO NOMINEES SINGAPORE PTE LTD
160,011,000
8.74
CITIBANK NOMINEES SINGAPORE PTE LTD
115,382,693
6.30
HSBC (SINGAPORE) NOMINEES PTE LTD
85,694,355
4.68
DBS NOMINEES PTE LTD
84,740,329
4.63
UOB KAY HIAN PTE LTD
58,318,000
3.18
DBSN SERVICES PTE LTD
38,156,048
2.08
RAFFLES NOMINEES PTE LTD
30,270,978
1.65
UNITED OVERSEAS BANK NOMINEES (PTE) LTD
21,788,160
1.19
WANG NANHUA
10,010,000
0.55
DBS VICKERS SECURITIES (SINGAPORE) PTE LTD
9,641,000
0.53
MORGAN STANLEY ASIA (SINGAPORE) SECURITIES PTE LTD
9,476,257
0.52
DB NOMINEES (SINGAPORE) PTE LTD
7,479,037
0.41
BNP PARIBAS NOMINEES SINGAPORE PTE LTD
3,157,000
0.17
PHILLIP SECURITIES PTE LTD
3,105,000
0.17
OCBC SECURITIES PRIVATE LTD
2,113,000
0.12
ZHONG HAISHENG
1,761,000
0.10
MERRILL LYNCH (SINGAPORE) PTE LTD
1,746,478
0.10
KIM ENG SECURITIES PTE. LTD.
1,679,000
0.09
1,769,295,335
96.62
TOTAL
116
YANLORDLAND 2008 ANNUAL REPORT
Shareholding Statistics As at 16 March 2009 SUBSTANTIAL SHAREHOLDERS No. of Shares Held
Name YANLORD HOLDINGS PTE. LTD.1 2
ZHONG SHENG JIAN
Deemed Interest
Percentage (%)
Total Interest (%)
Direct Interest
Percentage (%)
1,277,514,000
69.76
–
–
69.76
1,987,000
0.11
1,277,514,000
69.76
69.87
Notes: 1
Interest held directly and via nominee accounts.
2
Zhong Sheng Jian is deemed to be interested in 1,277,514,000 ordinary shares held by Yanlord Holdings Pte. Ltd.
Based on the information available to the Company as at 16 March 2009, approximately 27% of the issued ordinary shares of the Company is held by the public and accordingly, Rule 723 of the Listing Manual issued by the Singapore Exchange Securities Trading Limited has been complied with.
117
YANLORDLAND 2008 ANNUAL REPORT
Notice of Annual General Meeting NOTICE IS HEREBY GIVEN that an Annual General Meeting (“AGM”) of Yanlord Land Group Limited (“Company” or “Yanlord”) will be held on Wednesday, 29 April 2009 at 2.00 p.m. at the Vanda Ballroom, Marina Mandarin Singapore, Level 5, 6 Raffles Boulevard, Marina Square, Singapore 039594 to transact the following business:
AS ROUTINE BUSINESS 1.
To receive and adopt the directors’ report and the audited financial statements of the Company for the financial year ended 31 December 2008 together with the auditors’ reports thereon. (Resolution 1)
2.
To declare a first and final (one-tier) tax-exempt dividend of 1.23 Singapore cents per ordinary share for the year ended 31 December 2008. (Resolution 2)
3.
To approve the payment of Directors’ Fees of S$400,000 for the year ended 31 December 2008. (Resolution 3)
4.
To re-elect the following Directors, each of whom will retire pursuant to Article 91 of the Articles of Association (“AA”) of the Company and who, being eligible, offer themselves for re-election: a) b) c)
5.
Mr. Zhong Siliang Mr. Ng Ser Miang Ms. Ng Shin Ein
(Resolution 4a) (Resolution 4b) (Resolution 4c)
To re-appoint Messrs Deloitte & Touche LLP as Auditors of the Company and to authorize the Directors to fix their remuneration. (Resolution 5)
AS SPECIAL BUSINESS 6.
To consider and, if thought fit, to pass with or without any amendments, the following resolutions as Ordinary Resolutions:
6A.
That authority be and is hereby given to the Directors of the Company to:(a)
(i)
allot and issue shares in the capital of the Company (“shares”) whether by way of rights, bonus or otherwise; and/or
(ii)
make or grant offers, agreements or options (collectively, “Instruments” and each, an “Instrument”) that might or would require shares to be issued, including but not limited to the creation and issue of (as well as adjustments to) warrants, debentures or other instruments convertible into shares,
at any time and upon such terms and conditions and for such purposes and to such persons as the Directors may, in their absolute discretion, deem fit; and (b)
118
(notwithstanding the authority conferred by this Resolution may have ceased to be in force) issue shares in pursuance of any Instrument made or granted by the Directors while this Resolution was in force,
YANLORDLAND 2008 ANNUAL REPORT
Notice of Annual General Meeting provided that: (1)
the aggregate number of shares to be issued pursuant to this Resolution (including shares to be issued in pursuance of Instruments made or granted pursuant to this Resolution): (A)
by way of renounceable rights issues on a pro-rata basis to shareholders of the Company (“Renounceable Rights Issues”) shall not exceed one hundred per cent. (100%) of the total number of issued shares (excluding treasury shares) in the capital of the Company (as calculated in sub-paragraph (3) below; and
(B)
otherwise than by way of Renounceable Rights Issues (“Other Share Issues”) shall not exceed fifty per cent. (50%) of the total number of issued shares (excluding treasury shares) in the capital of the Company (as calculated in accordance with sub-paragraph (3) below), of which the aggregate number of shares to be issued other than on a pro-rata basis to shareholders of the Company (including shares to be issued in pursuance of Instruments made or granted pursuant to this Resolution) does not exceed twenty per cent. (20%) of the total number of issued shares (excluding treasury shares) in the capital of the Company (as calculated in accordance with sub-paragraph (3) below);
(2)
the Renounceable Rights Issues and Other Share Issues shall not, in aggregate, exceed one hundred per cent. (100%) of the total number of issued shares (excluding treasury shares) in the capital of the Company (as calculated in sub-paragraph (3) below);
(3)
(subject to such manner of calculation as may be prescribed by Singapore Exchange Securities Trading Limited (“SGX-ST”) for the purpose of determining the aggregate number of shares that may be issued under sub-paragraphs (1)(A) and (1)(B) above, the total number of issued shares (excluding treasury shares) shall be based on the total number of issued shares (excluding treasury shares) in the capital of the Company at the time this Resolution is passed, after adjusting for:(i)
new shares arising from the conversion or exercise of any convertible securities or share options on issue at the time this Resolution is passed; and
(ii)
any subsequent bonus issue, consolidation or subdivision of shares;
(4)
in exercising the authority conferred by this Resolution, the Company shall comply with the provisions of the Listing Manual of SGX-ST for the time being in force (unless such compliance has been waived by the SGX-ST) and the AA for the time being of the Company; and
(5)
(unless revoked or varied by the Company in general meeting) the authority conferred by this Resolution shall continue in force until the conclusion of the next AGM of the Company or the date by which the next AGM is required by law to be held, whichever is the earlier. (Resolution 6)
119
YANLORDLAND 2008 ANNUAL REPORT
Notice of Annual General Meeting 6B.
That subject to and pursuant to the share issue mandate in 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 20% discount for new shares to the weighted average price per share determined in accordance with the requirements of the SGX-ST. (Resolution 7)
6C.
That approval be and is hereby given to the Directors to:(a)
offer and grant options in accordance with the provisions of the Yanlord Land Group Share Option Scheme 2006 (“ESOS 2006”); and
(b)
allot and issue from time to time such number of shares in the capital of the Company as may be issued pursuant to the exercise of options under the ESOS 2006,
provided that the aggregate number of shares to be issued pursuant to the ESOS 2006 shall not exceed fifteen per cent. (15%) of the total issued shares in the capital of the Company from time to time. (Resolution 8) 7.
To transact any other ordinary business which may properly be transacted at an annual general meeting.
NOTICE OF BOOKS CLOSURE AND DIVIDEND PAYMENT DATES NOTICE IS ALSO HEREBY GIVEN THAT the Share Transfer Books and Register of Members of the Company will be closed on 20 May 2009, for the purpose of determining the shareholders’ entitlements to the first and final (one-tier) tax-exempt dividend of 1.23 Singapore cents per ordinary share for the year ended 31 December 2008 (“Proposed Dividend”) to be proposed at the AGM of the Company to be held on 29 April 2009. Duly completed registrable transfers in respect of shares of the Company received by the Company’s Share Registrar, Boardroom Corporate & Advisory Services Pte. Ltd., of 3 Church Street, #08-01, Samsung Hub, Singapore 049483 up to 5.00 p.m. on 19 May 2009 will be registered to determine shareholders’ entitlements to the Proposed Dividend. Shareholders whose securities accounts with the Central Depository (Pte) Limited are credited with shares as at 5.00 p.m. on 19 May 2009 will be entitled to the Proposed Dividend. The Proposed Dividend, if approved at the forthcoming AGM, will be paid on 5 June 2009.
BY ORDER OF THE BOARD Tan Shook Yng Company Secretary 13 April 2009 Singapore
120
YANLORDLAND 2008 ANNUAL REPORT
Notice of Annual General Meeting Notes: (i)
A shareholder of the Company entitled to attend and vote at the AGM is entitled to appoint not more than two proxies to attend and vote on his behalf. A proxy need not be a member of the Company.
(ii)
The instrument appointing a proxy must be deposited at the registered office of the Company at 9 Temasek Boulevard #36-02 Suntec Tower Two Singapore 038989 not less than 48 hours before the time fixed for holding the AGM.
(iii)
Resolution 4b: Mr. Ng Ser Miang who is considered an independent director will, upon re-appointment as a Director of the Company, remain as Chairman of the Nominating Committee and member of the Risk Management Committee.
(iv)
Resolution 4c: Ms. Ng Shin Ein who is considered an independent director will, upon re-appointment as a Director of the Company, remain as Chairman of the Risk Management Committee, member of the Audit Committee and member of the Remuneration Committee.
(v)
Resolution 6, if passed, is to empower the Directors from the date of the AGM to be held on 29 April 2009 until the date of next AGM, to issue shares in 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 a number not exceeding (i) 100% of the total number of issued shares (excluding treasury shares) in the capital of the Company (calculated as described above) for Renounceable Rights Issues (“100% Renounceable Rights Issues”) and (ii) 50% of the total number of issued shares (excluding treasury shares) in the capital of the Company (calculated as described above) for Other Share Issues, with a sub-limit of 20% for issues other than on a pro-rata basis to shareholders, provided that the total number of shares which may be issued pursuant to (i) and (ii) shall not exceed 100% of the issued shares (excluding treasury shares) in the capital of the Company (calculated as described above). The authority for 100% Renounceable Rights Issues is one of the further measures introduced by Singapore Exchange Limited, in consultation with the Monetary Authority of Singapore and took effect on 20 February 2009 to accelerate and facilitate listed issuers’ fund raising efforts.
(vi)
Resolution 8, if passed, is to authorise the Directors to offer and grant options in accordance with the provisions of the ESOS 2006 and to allot and issue from time to time such number of shares in the capital of the Company as may be issued pursuant to the exercise of options under the ESOS 2006, provided that the aggregate number of shares to be issued pursuant to the ESOS 2006 shall not exceed 15% of the total number of issued shares excluding treasury shares in the capital of the Company from time to time.
121
YANLORDLAND 2008 ANNUAL REPORT
This page has been intentionally left blank.
Yanlord Land Group Limited
Important:
(Incorporated in the Republic of Singapore) Company Registration No. 200601911K
1.
For investors who have used their CPF monies to buy shares of Yanlord Land Group Limited, the Annual Report is forwarded to them at the request of their CPF Approved Nominees and is sent solely FOR INFORMATION ONLY.
PROXY FORM ANNUAL GENERAL MEETING
2.
This Proxy Form is not valid for use by CPF Investors and shall be ineffective for all intents and purposes if used or purported to be used by them.
I/We,
(Name)
of
(Address)
being a member/members of Yanlord Land Group Limited (the “Company” or “Yanlord”) hereby appoint:
Name
Address
NRIC / Passport Number
Proportion of Shareholdings No. of Shares
%
(a) and/or (delete as appropriate): (b) or failing him/her, the Chairman of the Meeting (defined below), as my/our proxy/proxies to attend and vote for me/us on my/our behalf and, if necessary, to demand a poll at the annual general meeting of the Company (“Meeting”) to be held at the Vanda Ballroom, Marina Mandarin Singapore, Level 5, 6 Raffles Boulevard, Marina Square, Singapore 039594 on Wednesday, 29 April 2009 at 2.00 p.m. and at any adjournment thereof. (Please indicate with an “X’’ in the space provided whether you wish your vote(s) to be cast for or against the resolution as set out in the Notice of the Meeting. In the absence of specific directions, the proxy will vote or abstain as the proxy deems fit). No. 1 2 3 4
5 6 7 8
Ordinary Resolutions
For
Against
ROUTINE BUSINESS Adoption of Reports and Accounts Declaration of Dividend Approval of Directors’ Fees (a) Re-election of Mr. Zhong Siliang as Director (b) Re-election of Mr. Ng Ser Miang as Director (c) Re-election of Ms. Ng Shin Ein as Director Re-appointment of Auditors SPECIAL BUSINESS Authority for Directors to issue shares and convertible securities Authority for Directors to issue new shares other than on a pro-rata basis at a discount of up to 20% to the weighted average price per share Authority for Directors to grant options and to issue shares under Yanlord Share Option Scheme 2006
Dated this
day of
2009.
Total Number of Shares Held
Signature(s) or Common Seal of Member(s) IMPORTANT: PLEASE READ NOTES ON THE REVERSE
Notes: 1.
Please insert the total number of shares held by you. If you have shares entered against your name in the Depository Register (as defined in Section 130A of the Companies Act, Cap 50), you should insert that number. If you have shares registered in your name in the Register of Members of the Company, you should insert that number. If you have shares entered against your name in the Depository Register and registered in your name in the Register of Members, you should insert the aggregate number. If no number is inserted, this form of proxy will be deemed to relate to all the shares held by you.
2.
A member entitled to attend and vote at the Meeting is entitled to appoint not more than two proxies to attend and vote on his behalf. A proxy need not be a member of the Company. Where a member appoints more than one proxy, the appointments shall be invalid unless he specifies the proportion of his holding (expressed as a percentage of the whole) to be represented by each proxy.
3.
The instrument appointing a proxy or proxies shall, in the case of an individual, be signed by the appointor or of his attorney duly authorised in writing. Where the instrument appointing a proxy or proxies is executed by a corporation, it must be executed either under its common seal or signed on its behalf by an attorney or a duly authorised officer of the corporation.
4.
Where an instrument appointing a proxy is signed on behalf of the appointor by an attorney, the letter or power of attorney or a duly certified copy thereof must (failing previous registration with the Company) be lodged with the instrument of proxy, failing which the instrument may be treated as invalid.
5.
A corporation which is a member may authorise by resolution of its directors or other governing body such person as it thinks fit to act as its representative at the Meeting, in accordance with Section 179 of the Companies Act, Cap 50.
6.
The Company shall be entitled to reject an instrument appointing a proxy/proxies which is incomplete, improperly completed, illegible or where the true intentions of the appointor is not ascertainable from the instructions of the appointor contained in the instrument of proxy. In addition, in the case of shares entered in the Depository Register, the Company may reject an instrument of proxy if the member, being the appointor, is not shown to have shares entered against his name in the Depository Register as at 48 hours before the time fixed for holding the Meeting, as certified by The Central Depository (Pte) Limited to the Company.
7.
The instrument appointing a proxy or proxies must be deposited at the Company’s registered office at 9 Temasek Boulevard #36-02 Suntec Tower Two, Singapore 038989 not less than 48 hours before the time fixed for the Meeting.
PROXY FORM Affix Stamp Here
The Company Secretary
YANLORD LAND GROUP LIMITED 9 Temasek Boulevard #36-02 Suntec Tower Two Singapore 038989
Corporate
Information
BOARD OF DIRECTORS Zhong Sheng Jian, Chairman and Chief Executive Officer Zhong Siliang, Executive Director Chan Yiu Ling, Executive Director Hong Zhi Hua, Executive Director Ronald Seah Lim Siang, Lead Independent Director Ng Ser Miang, Independent Director Ng Shin Ein, Independent Director Ng Jui Ping, Independent Director AUDIT COMMITTEE Ronald Seah Lim Siang, Chairman Ng Shin Ein Ng Jui Ping NOMINATING COMMITTEE Ng Ser Miang, Chairman Ronald Seah Lim Siang Zhong Sheng Jian REMUNERATION COMMITTEE Ng Jui Ping, Chairman Ronald Seah Lim Siang Ng Shin Ein RISK MANAGEMENT COMMITTEE Ng Shin Ein, Chairman Ng Ser Miang Ng Jui Ping Zhong Sheng Jian
GROUP GENERAL COUNSEL / COMPANY SECRETARY Tan Shook Yng GROUP FINANCIAL CONTROLLER Jim Chan Chi Wai HEAD, FINANCIAL MANAGEMENT AND COMMUNICATIONS John Low HEAD, INVESTOR RELATIONS Michelle Sze Ka Ping REGISTERED OFFICE 9 Temasek Boulevard #36-02 Suntec Tower Two Singapore 038989 Tel: (65) 6336 2922 Fax: (65) 6238 6256 Registration No.: 200601911K WEBSITE http://www.yanlordland.com AUDITORS Deloitte & Touche LLP 6 Shenton Way #32-00 DBS Building Tower Two Singapore 068809 Partner-in-charge: Wong-Yeo Siew Eng (Appointed on April 29, 2008)
SHARE REGISTRAR AND TRANSFER OFFICE Boardroom Corporate & Advisory Services Pte. Ltd. 3 Church Street #08-01 Samsung Hub Singapore 049483 (Appointed on March 7, 2006) PRINCIPAL BANKERS Bank of Shanghai DBS Bank Ltd Industrial and Commercial Bank of China The Hongkong and Shanghai Banking Corporation Ltd The Royal Bank of Scotland STOCK EXCHANGE LISTING Singapore Exchange Securities Trading Limited DATE AND COUNTRY OF INCORPORATION 13 February 2006, Singapore
Y NLORD L NDM RK V
V V
SHARING A GLOBAL VISION
仁恒置地廣場
购物中心/写字楼/服务式公寓
与世界同分享 Ideally situated in the heart of Chengdu’s central business district, Yanlord Landmark is the latest and brightest addition to this hub of western China. An integrated development comprising premier shopping podiums, Grade A office suites and quality serviced apartments, Yanlord Landmark continues to be the development of choice for leading multi-national corporations, domestic enterprises and international designer brands to base their regional operations. Building on a commitment to “Maintaining International Standards” Yanlord Landmark continues to form a conduit that connects Chengdu with the rest of the world 仁恒置地广场，成都CBD核心城市建筑综合体，汇集国际品牌购物中心、甲级写字楼、酒店服务式公寓三种高端物业形态，以“国际视野、世界标准” 打造国际品牌、跨国公司、中外知名企业区域发展总部，成就中国西部“总部经济基地”。让世界与成都交汇，分享全球精彩。 仁恒置地集团 YANLORD LAND GROUP 新加坡上市公司（股票代码Z25）
项目地址: 中国成都人民南路二段1号 开发商：仁恒置地（成都）有限公司 Add:No 1, Section 2, Renmin South Road, Chengdu, China
持之以恒
Chairman’s Statement Financial Highlights
Operations Review YANLORD LAND GROUP LIMITED 仁恒置地集团有限公司 REG.NO. 200601911K
2008 Annual Report 2008年报
仁信治业
持之以恒
YANLORD LAND
CONTENTS 01
ABOUT YANLORD MISSION STATEMENT
02
CHAIRMAN’S STATEMENT
06
主席致词
08
FINANCIAL HIGHLIGHTS
10
OPERATIONS REVIEW
16
业务回顾
20
OPERATIONAL HIGHLIGHTS
23
DEVELOPMENT SCHEDULE SUMMARY
26
OUR PROJECT SHOWCASE
34
BOARD OF DIRECTORS
38
KEY MANAGEMENT
41 CORPORATE GOVERNANCE STATEMENT
66 NOTES TO THE FINANCIAL STATEMENTS
49 REPORT OF THE DIRECTORS
114 STATEMENT OF DIRECTORS
56 INDEPENDENT AUDITORS’ REPORT
115 INTERESTED PERSON TRANSACTIONS USE OF PROCEEDS
58 BALANCE SHEETS 116 SHAREHOLDING STATISTICS 60 CONSOLIDATED PROFIT AND LOSS STATEMENT 61 STATEMENTS OF CHANGES IN EQUITY 64 CONSOLIDATED CASH FLOW STATEMENT
118 NOTICE OF ANNUAL GENERAL MEETING PROXY FORM CORPORATE INFORMATION
About Yanlord Yanlord develops high-end quality properties that distinguish themselves amidst the localities that they are in. Properties developed by our company are characterised by outstanding architectural design and quality construction. With a track record in developments located at prime locations, our brand name, just like the properties we build, is an icon in itself.
Mission Statement Managing with benevolence and integrity, achieving perpetuity through perseverance
仁信治业
持之以恒
YANLORD LAND
Mr. Zhong Sheng Jian Chairman and CEO
钟声坚 先生
02
集团董事局主席兼总裁
YANLORDLAND 2008 ANNUAL REPORT
Chairman’s Statement
Gross margin grows to 55.5% from 45.1% on the back of a 32.6% increase in ASP Dear Shareholders
S$221.5 million in FY2007 to S$225.8 million in
It is with great pleasure that I present to you Yanlord
FY2008 – a continued indication of the strong
Land Group Limited’s (“Yanlord” and together with
brand value, ability to command premium pricing
its group of companies, “Group”) annual report
and consumer confidence that Yanlord and its
for the financial year ended 31 December 2008
various subsidiaries possess in the PRC high-end
(“FY2008”). In addition to the usual highlights and
residential market.
review of our operating and financial performance over the year, I would like to share with our loyal
While near-term market conditions remain
shareholders my views on the outlook of the PRC
volatile, we are confident of the long-term
real-estate industry and the Group’s development
outlook
plans going forward.
Leveraging on the vast experience of our
of
the
PRC
real
estate
sector.
dedicated and talented management team,
Operational Highlights
we will continue to focus on enhancing our
FY2008 had been a challenging year. Despite this
competitive advantages in high-end residential
challenging operating environment, the Group
development and further augment the Yanlord
remained resilient and achieved a total revenue of
brand name within the PRC real-estate sector.
S$1.01 billion with a total gross floor area (“GFA”)
Our Group has won numerous accolades
of 285,926 sqm delivered in FY2008. While total
as a result of our continue commitment to
GFA delivered and revenue recognized in FY2008
quality and design. Building on our successful
were lower than that of FY2007 by 40.6% and
business model to provide a comprehensive
18.0% respectively, the average selling prices
package that includes differentiating designs,
(“ASP”) of Yanlord’s properties increased 32.6%
quality developments and professional property
to RMB17,294 per sqm (equivalent to S$3,536)
management services, the Group has developed
in FY2008. Attributable to the strong ASP
a strong brand equity in the high-end residential
achieved in FY2008, gross profit margin grew
sector which is well recognised by the market.
10.4% to 55.5% from 45.1% in FY2007 while net
Our commitment to quality continues to attract
profit attributable to shareholders rose 2% from
discerning customers who are willing to pay
03 YANLORDLAND 2008 ANNUAL REPORT
Chairman’s Statement
premium prices and underlines the continued increase in the
accreditation in 2008. The successive nominations reflect the
ASPs for our developments.
success and scalability of our property management services model, and further enhances the Yanlord brand name
As a pan-region premier real-estate developer that excels
with the assurance that residents of our developments will
in the provision of fully-fitted apartment units as well as
continue to enjoy similar standards of living in every Yanlord
quality commercial and integrated property projects in
development.
strategically selected key high-growth cities within the PRC, Yanlord is committed to providing high quality products and
On the back of these successes, the Group was named as China’s
excellent services to our customers. Adhering to its guiding
“Top 10 Foreign Real Estate Company China Investment” by
principle of “Developing land with devotion; building quality
overall ranking and “Top 10 Brand of Foreign Real Estate Company
accommodations with passion”, Yanlord consistently sets
Invested in China” in September 2008 by the China Real Estate
new benchmarks within the PRC real estate sector through
TOP 10 Research Team, who also estimates the Group’s current
the combination of avant-garde designs, quality materials and
brand value to be worth approximately RMB 4.06 billion.
premier finishing to create an environment that balances both form and functionality.
Building our land bank reserves I strongly believe that overcoming adversity is the only way that
Our developments in various high-growth cities in the PRC,
success is forged. The turbulent market conditions will undoubtedly
including Shanghai, Suzhou, Nanjing and Zhuhai, continue to
create opportunities to augment the future development of the Group
enjoy significant brand equity and strong demand by consumers.
and we will capitalise on our strengths to seize such opportunities
Reflecting the market support for its fully furnished quality
for growth when they arise.
developments, one of the Group’s projects in Shanghai, Yanlord Riverside City was ranked by domestic real estate portal Soufun
In February 2008, the Group invested in a residential development
as the residential development with the highest sales revenue
project in Tianjin – Haihe Development Project. The site has a total
in Shanghai for 2008. Separately, our development in Zhuhai
planned GFA of over 320,000 sqm and is ideally situated along
– Yanlord New City Gardens Phase 1 – was accredited with
the picturesque riverfronts of the Xinkai and Ziya rivers. With the
the highest level “Triple A residential project” rating by the PRC
limited availability of prime land within the urban regions of Northern
Ministry of Construction.
China, this project will serve to further extend the Group’s market presence within the Bohai Economic Zone.
The Group’s property management division is an extension of our philosophy to providing buyers of its residential units with
In July 2008, the Group successfully acquired a prime
a comfortable and endearing living environment. Subsequent
residential development site with a total planned GFA of
to our property management company in Shanghai being
approximately 160,000 sqm in Waigaoqiao District, Pudong,
selected as a national model for property management
Shanghai. Strategically situated within Shanghai’s planned
services by the PRC Ministry of Construction, our property
largest eco-development district, the site is amongst the few prime
management company in Nanjing was also awarded the same
residential usage land parcels released for sale in Shanghai in
04 YANLORDLAND 2008 ANNUAL REPORT
Chairman’s Statement
2008 and have been slated for development into high-end
true mettle of a company and discern the long-term economic
prime residential apartments. The site is in close proximity to
viability of an enterprise. As management guru Peter Ferdinand
Shanghai’s comprehensive metro and highway networks and
Drucker once said, “It is only through surviving crisis that a
offer easy access to the city’s financial centre.
business may grow into a successful enterprise.” And as a Chinese poem goes: A hero is differentiated by his ability to
Expansion of investment property portfolio
overcome obstacles, as a flower blooms even more fragrantly
As a key well-balanced business strategy, the Group will continue
after surviving the harsh winter weather.
to focus on delivering stable recurrent income streams through developing premier retail and commercial developments. Currently,
Through its illustrious history, Yanlord has encountered and
the Group has retained an aggregate GFA of approximately 500,000
surmounted many obstacles. These experiences have and
sqm spread across key Chinese cities such as Chengdu, Tianjin
will continue to enhance the Group’s ability to rise above any
and Zhuhai for the development of various commercial properties.
potential challenges. While the current market environment may be challenging, we remain confident of the long-term potential
Construction of our major projects in Chengdu (Yanlord
of the PRC real estate sector. Moving forward, the Group will
Landmark) and Tianjin (Yanlord Riverside Plaza) continues
continue to maintain a sound financial policy, prudent investment
to be on-track. Of particular note, construction of Yanlord
strategies while focusing on improving our quality control,
Landmark in Chengdu remains on schedule despite the
property management, human resources, cultural and other
Szechuan earthquake in 2008. Slated to open in end 2009, the
operational aspects to enhance the value of our products and
tender for units at Yanlord Landmark had attracted renowned
services. It is only through such efforts that we can cater to the
international fashion brands who have signed preliminary lease
long-term benefits of Yanlord shareholders.
agreements with payment of initial rental deposits.
In appreciation In addition, the Group’s key development in Tianjin – Yanlord
On behalf of our Board of Directors, I would like to express our
Riverside Plaza – continues to attract the interest of many globally
sincerest gratitude to our shareholders for their trust and support.
renowned retailers. Slated to open in 2011, the Group has recently
In appreciation, the Board of Directors has proposed a first and
signed a preliminary anchor tenant lease agreement with an Asian
final dividend of 1.23 Singapore cents per share, representing
based multi-national departmental store for approximately 50,000
a dividend payout of approximately 10% of FY2008 net profit
sqm GFA, and continues to receive enquiries for other shop lots
attributable to equity holders. We will continue to build on our
within the development.
success towards future developments and endeavor to increase shareholder value.
Outlook 2008 has been one of the most turbulent years in recent memory with shockwaves from the financial sector resonating across all aspects of the global economy. However, it is in such challenging times that we are able to put to test the
05 YANLORDLAND 2008 ANNUAL REPORT
主席致辞 尊敬的各位股东： 本人在此呈报仁恒置地集团2008年度诸项业绩，同时也与各位股东 分享本人对中国地产业及集团未来发展前景的一些思考。
经营业绩亮点纷呈 与2007年相比，2008年的地产市场呈现巨大波动。虽然2008年销 售面积为285,926平方米，同比减少40.6%，但是集团2008年的销 售均价同比上升32.6%，达到每平方米人民币17,294元（等同新币 3,536元）；2008年的毛利率为55.5%，同比上升10.4个百分点。虽
受惠于物业平均销售价上 扬32.6%，2008年毛利率由 45.1%劲升至55.5%
然2008年的销售收入约为新币10亿零7百万元，同比减少18.0%， 但2008年公司股东权益的净利润约为新币2亿2,584万元，同比上升 2%；显示出仁恒各成员企业在中国不同地区高端房地产市场的开 发实力、溢价能力和品牌价值。
商业操守，集团的市场影响和品牌价值稳步提升，被专业机构 评为“2008年海外在中国投资房地产上市公司综合实力TOP10企
面对市场的波动，集团管理层冷静思考，深入分析，沉着应对，进
业”和“2008海外在中国投资的房地产公司品牌TOP10”，企业品
一步增强仁恒在高端物业领域的竞争优势。集团在项目开发与产品
牌价值跃升至40.63亿元人民币。
链的每一个环节上精益求精，通过差异化设计、精细化施工、专业 化物业管理等一系列举措为客户创造更高的附加值。集团的经营模
土地储备稳步增加
式成就了仁恒的品牌价值，赢得了市场，满足了客户需求，得到了
我坚信，严冬孕育着春蕾，市场的波动与行业的调整孕育着更大的
各方的高度认可。
机遇。本着稳健经营的原则，2008年集团在天津、上海再添优质地 块，进一步增强了持续发展能力。
作为一个在中国从事跨区域、跨城市、跨业态开发经营的企业，仁 恒高度重视产品与服务的品质，以“善待土地、用心造好房”作为
2008年1月，集团收购了天津滨河水岸项目。项目毗邻新开河与子牙
自己持续追求的目标和不懈奋斗的动力。2008年，集团在上海、苏
河，建筑面积超过32万平方米，是中国北部城市稀缺的优质地块。
州、南京、珠海等地的楼盘均以优良品质受到消费者和业内同行的
集团在渤海湾经济区的市场地位进一步得到巩固。
认可。其中上海仁恒河滨城项目再次获得上海市年度住宅销售冠 军，销售业绩和市场反响令业内瞩目；珠海仁恒星园一期更是达到
2008年7月，集团摘牌获得了上海浦东新区外高桥五洲大道地块，
了中国国家建设主管部门对住宅产品的最高认定标准：“3A”级。
该地块是08年上海出让的为数不多的几个住宅地块之一，位置优
继上海仁恒物业管理公司之后，南京仁恒物业管理公司亦被评为
越，邻近轨道交通，处于规划中上海最大的绿地公园之内，建筑
国家物业管理一级资质企业。正是由于集团稳固的市场地位及
面积近16万平方米，适合开发高端的国际社区。
06 YANLORDLAND 2008 ANNUAL REPORT
主席致辞
持有投资物业稳步推进 集团目前在建的商用物业分布在成都、天津与珠海等地, 持有投 资物业总面积约50万平方米。值得一提的是，成都仁恒置地广场 （“置地广场”）项目进展顺利，没有因四川强震而滞后。项目招 商正按计划进行，已与多个国际一线品牌签订了意向协议，并收取 了租赁定金。置地广场的商场计划约于2009年底试营业，届时将成 为成都市最高档的购物中心之一。 集团位于天津的海河广场项目也进展顺利，集团已就其中面积达 5万平方米的主力百货商场与亚洲知名的企业集团签订了租赁意向 协议，预计2011年开始营业。
未来展望 2008年是世界动荡的一年，一场百年一遇的金融危机席卷了全世 界，也波及了中国经济。仁恒在发展的过程中曾经受了多次市场 考验和洗礼。但仁恒不断学会在危机中提高自己，在危机中继续 发展。正如管理学家德鲁克所说：只有经过多次危机洗礼的企 业，才能成长为伟大的企业。正可谓：自古英雄多磨难，梅花香 自苦寒来。 面对目前的困难与多变的市场环境，集团将继续保持稳健的财务政 策、审慎的投资策略，不断地提高质量控制、企业管理、人才、 制度、及文化等方面的水平，使我们的产品在各个环节都做得更 好，从而提升仁恒产品的附加值。只有这样，我们才能对股东的 长远利益负责。 Yanlord International Apartments Clubhouse
致谢 本人代表集团感谢所有股东的信任和支持。作为回报，集团董事 局建议以约净利润的10%派发股息，每股的首次及末期分红为新币 1.23仙。集团上下将继续努力，为股东创造更大价值。
07 YANLORDLAND 2008 ANNUAL REPORT
仁信治业
持之以恒
YANLORD LAND
Financial Highlights
08 YANLORDLAND 2008 ANNUAL REPORT
Financial Highlights
Revenue and Profitability FY2006 - FY2008
Revenue
Gross Profit
(s$million)
Profit for the Year
(s$million)
Net Profit Attributable to Equity Holders
(s$million)
06
07
08
FY
337 281
559
553 438
200
200
100
06
07
08
FY
100
06
07
08
FY
226
FY
200
300
222
500
400 1,007
1,014
1,000
300
07
08
171
600
1,228
1,500
314
(s$million)
06
Credit Ratios As at 31 December
2006
2007
2008
Net Debt / Equity Total Debt / Equity Total Debt / Capitalization(1)
Net Cash 47% 29%
19% 65% 33%
64% 84% 40%
(1) Capitalization = Total debt + Equity attributable to equity holders of the Company + Minority interests
09 YANLORDLAND 2008 ANNUAL REPORT
仁信治业
持之以恒
YANLORD LAND Yanlord Peninsula
Operations Review
Yanlord continues to extend its market penetration and product diversity to complement existing revenue streams and derive greater value for shareholders
10 YANLORDLAND 2008 ANNUAL REPORT
Operations Review
Profit and Loss Highlights Net Profit Margin
(S$’000)
(%)
(%)
Revenue
60
40
20
31
27
40
45
56
Gross Profit Margin
2008 1,007,217
Gross profit
553,296
559,468
Profit before income tax
537,591
580,883
Profit for the year
336,704
313,956
Net profit attributable to equity holders
221,500
225,841
20
EPS (on the weighted average number of ordinary shares) (S$ cents)
FY
2007 1,227,932
07
08
FY
07
08
Delivered GFA (sqm) ASP (RMB)
12.52
12.35
481,028
285,926
13,038
17,294
Operations Review
Balance Sheet Highlights
Despite the market volatility witnessed in FY2008, the
(S$’000)
2007
2008
Group continues to remain resilient, net profit attributable to
Current assets
2,032,970
2,265,901
shareholders grew by 2.0% from S$221.5 million in FY2007
Non-current assets
1,750,927
2,553,279
to S$225.8 million in FY2008. While total GFA delivered in
Total assets
3,783,897
4,819,180
FY2008 was 40.6% or 195,102 sqm lower at 285,926 sqm
Current liabilities
945,037
1,219,672
than 481,028 sqm recognised in FY2007, average selling
Non-current liabilities
849,061
1,269,132
prices (“ASP”) of Yanlord’s delivered properties increased by
Total liabilities
1,794,098
2,488,804
32.6%, from RMB13,038 per sqm in FY2007 to RMB17,294
Minority interests
454,607
461,051
per sqm in FY2008. The Group’s resilient performance
Equity attributable to equity holders
1,535,192
1,869,325
0.84
1.02
reflects the strong brand equity and consumer confidence which Yanlord possesses in the PRC high-end residential
Net asset value per share (S$ )
market, overcoming the recessionary impacts brought on by
the global economic downturn.
Borrowings and Debt Short term debt
173,670
350,027
Earnings per share (“EPS”) remained stable in FY2008 from
Long term debt
525,940
898,930
FY2007 at 12.35 Singapore cents, while EPS on a fully diluted
Convertible notes
299,195
323,562
basis was 11.66 Singapore cents.
Total debt
998,805
1,572,519
11 YANLORDLAND 2008 ANNUAL REPORT
Operations Review
The Group recorded a total 527,018 sqm of completed GFA in Shanghai, Nanjing, Suzhou and Chengdu in FY2008. Total GFA
(1) Commitment to product and service quality standards to ensure that additional value is generated for our customers.
under development as at 31 December 2008 was 1,228,650 sqm distributed across Shanghai, Nanjing, Suzhou, Zhuhai, Tianjin and Chengdu. In FY2008, the Group commenced construction work
(2) Complement existing marketing efforts with more marketing channels to broaden the target client groups.
on 494,380 sqm GFA located mainly in Shanghai, Nanjing, Zhuhai and Suzhou. The Group has also acquired additional land bank
(3) Augment core competencies of the marketing team.
of 485,574 sqm GFA in Tianjin (Haihe land plot) and Shanghai (Waigaoqiao land plot).
(4) Continued focus in developing Yanlord’s brand equity and recognition within the industry; leveraging on our brand equity to drive sales as
The Group was named as China’s “Top 10 Foreign Real Estate
well as increasing flexibility on adjusting to prevailing market trends.
Company China Investment” by overall ranking and “Top 10 Brand of Foreign Real Estate Company Invested in China” by
As at 31 December 2008, Yanlord attained total contracted but un-
the China Real Estate TOP 10 Research Team, a joint research
booked pre-sales of approximately S$238.1 million, representing a
group consisting of Development Research Center of the State
total undelivered GFA of approximately 56,894 sqm.
Council, Real Estate Research Institute of Tsinghua University and China Index Academy, in September 2008. The study
Property Development
also estimates the Group’s current brand value to be worth
The Group continued its steady pace of new developments in FY2008.
approximately RMB 4.06 billion.
For the year under review, we completed a total GFA of 527,018 sqm with key developments in Shanghai, Nanjing, Suzhou and Chengdu.
Sale of Properties
This brings the Group’s cumulative total completed GFA to 2,926,844
In FY2008, the Group’s revenue was derived from mainly the
sqm. Adhering to our corporate philosophy “to develop land with
sale of properties at Yanlord Riverside City Phase 2 and 3
devotion and building quality accommodation with passion” we
(Shanghai), Yanlord Yunjie Riverside Gardens (Shanghai),
continue to strive for safety and excellence in our developments which
Bamboo Gardens Phase 3 (Nanjing), Yanlord International
has won recognition from our clients and industry peers.
Apartments (Nanjing), Yanlord Peninsula (Suzhou) and Hengye Star Gardens (Chengdu).
Testament to the Group’s development quality, our Zhuhai Yanlord New City Gardens Phase 1 development was awarded with a
In view of market volatility and changing regulatory policies, the
“Triple A residential project” accreditation by the PRC Ministry of
Group has initiated a series of key measures that will enable it
Construction while our Shanghai Yanlord Riverside City development
to capitalise on potential growth trends and further enhance the
was similarly awarded the Gold award for quality development by
Group’s property sales revenue. The key measures include:
the Shanghai Real Estate Association.
12 YANLORDLAND 2008 ANNUAL REPORT
Operations Review
Commercial Property Portfolio
Group – with an 80% ownership in the project - plans to develop
The development of our commercial property portfolio represents
the plot of land into fully-fitted apartments.
the Group’s strategic initiative to leverage on Yanlord’s brand equity in the development of premier residences and create
In July 2008, the Group successfully tendered for a prime residential
additional revenue streams to complement the Group’s existing
development site with a site area of 97.074 sqm and a total planned
businesses.
GFA of approximately 160,000 sqm in Waigaoqiao District, Pudong, Shanghai. Strategically situated within Shanghai’s planned largest eco-
The Group has retained an aggregate GFA of approximately 500,000
development district, the site was amongst the few prime residential
sqm in various key high-growth PRC cities such as Chengdu, Zhuhai,
usage land parcels released for sale in Shanghai in 2008 which is slated
Nanjing and Tianjin for the development of high-end commercial
for development into high-end prime residential apartments. These
developments. Sited in city-centric locations, these developments
sites are in close proximity to Shanghai’s comprehensive metro and
possess high intrinsic value and development potential.
highway networks and offer easy access to the city’s financial centre.
Focused on developing high-end commercial projects that include
As at 31 December 2008, the Group has a total land bank of 3.78
retail malls, grade A office suites, five-star hotels and serviced
million sqm in GFA sited in city-centric locations within key high-growth
apartments, the Group optimises the mix of each investment
cities of the PRC, and which possess high growth and development
property project to maximize returns and generate a recurring
potential. Of the total land bank, properties under development
revenue stream that will boost shareholder’s value.
accounted for approximately 1.23 million sqm GFA.
Land Bank Reserves
Product Development
In view of market fluctuations and turbulences surrounding the real-
Yanlord places great emphasis in developing quality projects.
estate sector in FY2008, the Group was proactive in monitoring
Through deployment of the latest technologies and techniques,
market developments and targeted regions that exhibit high
we continuously enhance the quality of our developments and
economic growth potential, high standards of living and of prime
customize each development according to regional requirements.
locations for investments to strategically grow the Group’s land bank and development potential.
For instance, at our Shanghai Yanlord Riverside City, the Group used an “aquatic floor radiant-heating system” to generate
In February 2008, the Group invested in a residential development
temperature appropriate for the human body. In addition, this
project in Tianjin – Haihe Development Project. The site is over
technology generates up to a 10-15% in energy savings. The
130,000 sqm with a total planned GFA of approximately 320,000
Group also initiated the construction of an innovative eco-friendly
sqm and is ideally situated along the picturesque riverfronts of
underground carpark which is illuminated by direct sunlight, giving
the Xinkai and Ziya rivers. Located within central Tianjin city, the
the underground car-park a green and fresh environment.
13 YANLORDLAND 2008 ANNUAL REPORT
Operations Review
For Yanlord Riverside Plaza, located in Tianjin, the Group has
Human Resource
constructed a unique “Ecological Atrium” within the interior
Yanlord regards human resource as one of its most valuable
compounds of the Plaza to mitigate the harsh northern winters and
assets and a key contributor to the Group’s continued success.
create a lush environment for its residents and retail customers.
The Group has also adopted a series of effective selection, development, reward and retention policies to attract and
The Group constantly exceeds the changing demands of our
retain talented employees that contribute to the Group’s
discerning customers through a focused development strategy
continued development. Operating on our mission statement
to amalgamate the latest building designs and techniques
of “Managing with benevolence and integrity, achieving
with premium quality finishing. We have also taken into account
perpetuity through perseverance”, we believe in treating our
environmental concerns and have started various ecological
employees with trust, understanding and respect. We actively
initiatives to further enhance our developments.
seek to maintain a working environment that is conducive for
Property Management
continuous learning thereby allowing employees to develop to their full potential.
The Group is one of the pioneers in introducing international property management concepts to the PRC. In applying the
Yanlord regards employee development and training as an
Group’s management philosophy to render a comfortable and
integral function. We attach great importance to the development
endearing living environment for our customers, the Group employs
of working teams within the organisation, and regard the role of
the latest technology and quality assurance standards to optimise
the manager as one of “managing operations” and “nurturing
our management model. The Group works tirelessly in improving
employees”. The Group has in place a series of training programs
our property management service levels and through such efforts,
for managers to enhance their management capabilities.
offer our clients a unique “Yanlord” experience in superior living conditions and excellence in service and care for our customers.
Investor Relations Corporate transparency and timely disclosure of information to
Currently our Shanghai and Nanjing property management
shareholders is of key importance to Yanlord. We endeavor to
companies have received national level accreditation for Class
maintain a high standard of corporate governance and proactively
1 Property Management Companies. Combining our wealth of
seek to engage the investment community to facilitate the
experience and capability in property management, we have
understanding of our Group’s business strategies and growth
developed an experienced and professional management
potentials. Quarterly financial reports as well as announcements
team that continues to excel in the provision of quality property
and press releases are also promptly posted on the SGX website
management services. To-date our property management
and our corporate website, ensuring that investors receive timely
teams have won numerous awards at the national, provincial
and accurate information.
and municipal levels.
14 YANLORDLAND 2008 ANNUAL REPORT
Yanlord International Apartments Lobby Area
业务回顾 经营业绩概况 2008
1,227,932
1,007,217
毛利润
553,296
559,468
税前利润
537,591
580,883
净利润
336,704
313,956
股东应占净利润
221,500
225,841
毛利率 (%)
净利润率 (%)
60
40
每股盈利(新币,仙)
40
12.52
12.35
实现面积(平方米)
481,028
285,926
实现均价(人民币)
13,038
17,294
(以加权平均股数计算)
45
56
20
31
营业收入
2007
27
(新加坡币,千元)
20
FY
07
08
FY
07
08
资产负债概况 (新加坡币,千元) 流动资产
2007 2,032,970
2008 2,265,901
非流动资产
1,750,927
2,553,279
总资产
3,783,897
4,819,180
业绩概要
流动负债
945,037
1,219,672
2008年，虽然面临市场波动，但全年公司股东权益的净利润仍录
非流动负债
849,061
1,269,132
得新币2亿2,584万元，同比上升2.0%。尽管2008年集团物业实现
1,794,098
2,488,804
销售面积为285,926平方米，相比2007年481,028平方米，减少了
小数股东权益
454,607
461,051
40.6%或195,102平方米，但集团2008年物业实现销售均价从2007年
股东应占权益
1,535,192
1,869,325
的每平方米人民币13,038元上升至每平方米人民币17,294元，上涨
0.84
1.02
总负债
幅度为32.6%。上述经营业绩是在金融海啸全球扩散、世界经济动 每股资产净值(新币,元)
取得的，再次显示了仁恒在中国高端房地产市场的开发实力、溢
借贷及债务 短期借贷
173,670
荡不安、中国地产市场波动调整、消费者信心受到冲击的情况下 价能力和品牌价值。
350,027
长期借贷
525,940
898,930
2008年集团每股盈利为新币12.35仙，摊薄后每股盈利为新币
可换股债券
299,195
323,562
11.66仙，均与2007年度基本持平。
总贷款额
998,805
1,572,519
16 YANLORDLAND 2008 ANNUAL REPORT
业务回顾
2008年，集团竣工面积527,018平方米，主要分布于上海、南京、
项目开发
苏州和成都等四大城市；年末在建面积1,228,650平方米，主要分
2008年，集团各大项目的开发建设稳步推进。全年竣工建筑面积为
布于上海、南京、苏州、珠海、天津和成都等六大城市；新开工
527,018平方米，主要分布于上海、南京、苏州和成都等四大城市。
面积494,380平方米，主要分布于上海、南京、珠海、天津等四大
至此，集团中国境内累计竣工交付面积达到2,926,844平方米。
城市。2008年，集团新增土地储备485,574平方米，分别是天津的 滨河水岸项目和上海的五洲大道项目。
集团坚持“善待土地、用心造好房”的开发理念，各交付项目均 在工程质量和产品品质上精益求精，获得了市场和业主的广泛
集团的开发实力、经营业绩和品牌价值获得了市场和客户的高度
认可，如：珠海星园一期通过国家建设部3A级住宅性能认定，
认可。2008年，集团被国务院发展研究中心企业研究所、清华大
上海仁恒河滨城被上海市房地产行业协会评为上海市优秀住宅
学房地产研究所和中国指数研究院共同发起设立的“中国房地产
金奖。
TOP10研究组”评为“2008年海外在中国投资房地产上市公司综合 实力TOP10企业”，并被评为“2008海外在中国投资的房地产公司
商业地产
品牌TOP10”，企业品牌价值跃升至40.6亿元人民币。
商业地产开发经营是集团面向未来、增强综合竞争力的战略性举 措。集团以高档社区购物中心、中央商务区的都市型购物中心、
物业销售
甲级写字楼、五星级酒店及服务式公寓作为未来商业房地产开发
集团2008年销售物业主要包括：上海的仁恒河滨城二期、三期和仁
的主要发展方向，优化不同业态的组合，实现住宅和商业地产的
恒运杰河滨花园项目；南京的仁恒翠竹园三期和仁恒国际公寓；苏
优势互补，互相促进，获取持续稳定的现金流及持续的物业增值，
州的星岛仁恒和星屿仁恒以及成都的恒业星园项目。
为股东创造更多的价值。
面对全球经济和国内市场波动，集团深入分析市场形势，密切关
集团在中国的一些主要城市中心地段投资建设高端商用物业，总
注政策走向，积极把握行业发展动态，采取多项措施促进物业销
建筑面积约50万平方米。主要分布在成都、珠海、南京、天津。
售，主要包括：
这些物业位置优越，具有非常可观的价值。
（1） 坚持以产品和客户为导向，精益求精提升产品品质和服务质
土地储备
量，不断提高产品附加值，给予客户更多的增值服务。
面对2008年房地产市场的调整与波动，集团紧密跟踪市场动态，重
（2） 积极拓展各类渠道，充分挖掘各方潜力聚集目标客户。
点在经济发达、生活富裕的国际化城市考察和投资位置优越、富有
（3） 加强营销团队的建设，提高营销专业能力。
增值潜力的项目和地块，进一步增强公司的持续发展能力。
（4） 推动品牌建设和推广，扩大仁恒品牌知名度和行业影响力， 以品牌带动销售，增强适应市场变化的能力。
2008年2月，集团收购了天津仁恒滨河水岸项目。项目毗邻新 开河与子牙河，是中国北部城市稀缺的优质地块。项目占地约
于2008年12月31日，集团尚有56,894平方米已销售物业未交付结
13万平方米，建筑面积约320,000平方米，集团占80%的权益，
算，合同金额总计新币2.38亿元。
将建造成为天津市中心城区精装修、生态型、国际化的高档滨 河社区。
17 YANLORDLAND 2008 ANNUAL REPORT
业务回顾
2008年7月，集团摘牌获得了上海浦东新区外高桥五洲大道地块，
目前，仁恒物业旗下拥有上海仁恒物业和南京仁恒物业两家国
该地块是08年上海出让的为数不多的几个住宅地块之一，位置优
家物业管理一级资质企业，形成了一支拥有丰富物业管理经验
越，邻近轨道交通，处于规划中上海最大的绿地公园之内。项目
的专业团队。仁恒物业管理的项目获得了多项市优、省优、国
占地面积97,074平方米，建筑面积约160,000平方米，将建造成上
优荣誉。
海浦东又一高品质、精装修的国际化社区。
人力资源 截至2008年年底，集团储备土地可开发面积约为378万平方米，其
仁恒通过优秀的企业文化来吸引和保留员工，视员工为企业的合
中在建面积约为123万平方米。这些项目多位于中国高增长城市的
作伙伴，信任、理解并善待员工，一直保持着员工队伍的相对稳
核心地段，具有可观的升值潜力。
定和不断成长。
产品研发
仁恒认为人才是企业的无形资产、第一资源，通过采取一系列措
仁恒高度重视产品研发工作，注重对新型、环保、绿色生态建筑
施，来有效实现对高素质管理团队和员工队伍的选、用、育、留
的研究与实践，根据项目情况采用各类先进技术和工艺，提升项
和激励。
目品质，满足客户对产品品质日益提高的需求。 公司在整个集团范围内，坚持并倡导统一的企业宗旨和核心价值 例如在上海仁恒河滨城项目中，公司采用了低温热水地板辐射采
观：“仁信治业，持之以恒”，并以此作为招募选拔和评估考核
暖技术，创造出真正符合人体散热要求的热环境，并节省采暖能
人才的标准。集团通过营造“低调务实，快乐向上”的组织氛围
耗10-15%；同时创新地建造超大面积下沉式阳光内庭地下车库，将
和人性化管理，来为员工提供展现能力和实现个人价值的平台，
地面的自然景观延伸到地下，为车库引入阳光及清新空气。
积极为员工营建适合而富有创造性的发展空间，鼓励员工积极而 卓越的工作，实现企业与员工的“双赢”发展。
在天津海河广场项目中，公司设计了生态中庭，针对北方四季变 化的气候特征，在寒冷的冬季，为消费者和小区业主提供了一处
对员工的持续培训与教育被认为是管理层一项非常重要的任务，
宝贵的绿色休闲空间。
集团非常重视职业经理人队伍建设，明确经理人的职责在于“做 事”与“育人”，借助涵盖全体员工的各类丰富的培训机会，辅
物业管理
之以人力资源优化措施，集团也由此实现了人力资源质量持续提
仁恒物业在中国大陆较早引入国际上先进的物业管理经验和理念，
升的战略目标。
将“恒心服务，一生呵护”的服务宗旨融入到“以人为本，客户至 上，注重细节，追求完美”的服务中去。
投资关系 集团注重向投资者提供及时、准确的讯息批露，并建立了一系列
仁恒物业注重引入新的科技成果和质量保证体系，持续完善和优化
有系统的沟通管道，向股东、投资者及分析员提供定期及可靠的
自身的管理模式，不断提升物业管理服务水平，以出色的服务使
讯息。季度业绩报告及各项公告和新闻稿均通过新加坡证券交易
业主享受中国内地超前的“星级酒店管家式”服务和“仁恒”个
所的官方网站公告及仁恒置地集团网站及时发布。
性化服务。
18 YANLORDLAND 2008 ANNUAL REPORT
仁信治业
持之以恒
YANLORD LAND
Operational Highlights Gross Property Sales by City in FY2008
Nanjing 20.3%
Shanghai 61.9%
GFA Contribution by City in FY2008
Suzhou 12.8%
20
Chengdu Hengye Star Gardens 5.6% Nanjing Yanlord International Apartments 8.2%
Chengdu 5.6% Others 2.2%
Shanghai Yanlord Riverside City (Phase 2) 34.3%
Suzhou Yanlord Peninsula 10.0% Yunjie Riverside Gardens Phase 1 4.3%
GFA Contribution by Project in FY2008 Shanghai 35.1%
Others 5.0%
Nanjing Bamboo Gardens (Phase 3) 11.9%
Suzhou 10.0%
Others 4.6%
Chengdu 21.8%
Gross Property Sales by Project in FY2008
Chengdu Hengye Star Gardens 21.8%
Others 6.7%
Nanjing Yanlord International Apartments 7.5% Nanjing 25.7%
YANLORDLAND 2008 ANNUAL REPORT
Nanjing Bamboo Gardens (Phase 3) 18.1%
Shanghai Yanlord Riverside City (Phase 3) 20.7%
Shanghai Yanlord Riverside City (Phase 2) 17.7% Shanghai Yanlord Riverside City (Phase 3) 9.3% Yunjie Riverside Gardens Phase 1 6.1% Suzhou Yanlord Peninsula 12.8%
Guiyang 1.7% Zhuhai Suzhou 3.5% 1.3% Chengdu 4.8%
Completed Development Properties
Segregation of GFA by Development Status & Cities
Shanghai 57.8%
Total
Nanjing 30.9%
2.93
million sqm
Properties Under Development
Suzhou 15.4%
Tianjin 15.1%
million sqm
Zhuhai 26.5%
Chengdu 13.6%
Suzhou 13.0%
Tianjin 18.8%
Nanjing 13.5%
Total
1.23
Properties Held for Future Development
Shanghai 15.9%
Total
2.55
million sqm
Zhuhai 8.5%
Shanghai 14.7%
Nanjing 24.1%
Shenzhen 20.9%
21
YANLORDLAND 2008 ANNUAL REPORT
Yanlord Riverside City
仁信治业
持之以恒
YANLORD LAND
Development
Schedule Summary
Completed Development Properties
Project Yanlord Plaza (1) (仁恒广场) Yanlord Apartments (仁恒公寓) Yanlord Gardens (Phase 1-3) (仁恒滨江园，一 - 三期) Yanlord Riverside City (Phase 1) (仁恒河滨城，一期) Yanlord Riverside City (Phase 2) (1) (仁恒河滨城，二期) Yanlord Riverside City (Phase 3) (仁恒河滨城，三期) Yanlord Town (仁恒家园) Yanlord Riverside Gardens (Phase 1) (仁恒河滨花园，一期) Yanlord Riverside Gardens (Phase 2) (仁恒河滨花园，二期) Yunjie Riverside Gardens (Phase 1) (运杰河滨花园，一期) Plum Mansions, including Lakeside Mansions (Phase 1-4) (梅花山庄.湖畔之星) Orchid Mansions (1) (玉兰山庄) Bamboo Gardens (Phase 1) (翠竹园，一期) Bamboo Gardens (Phase 2) (翠竹园，二期) Bamboo Gardens (Phase 3) (翠竹园，三期) Yanlord International Apartments, Tower A (1) (仁恒国际公寓，A栋) Yanlord International Apartments, Tower B (仁恒国际公寓，B栋) Hengye International Plaza (1) (恒业国际广场) Hengye Star Gardens (1) (恒业星园) Xintian Centre (新天商业中心) Yanlord Villas (仁恒别墅) Yanlord New City Gardens (Phase 1) (1) (仁恒星园，一期) Yanlord Peninsula (Townhouse - Phase 1) (星岛仁恒，一期) Total
City
Interest Commencement Attributable Date Completion Date
Remaining Unsold/Held for Investment /Fixed Assets (Saleable GFA (sqm) Area, sqm) Type
Shanghai
67%
March-93
November-96
53,049
4,189
R,S
Shanghai
67%
November-94
November-97
13,579
0
R
Shanghai
67%
November-97
September-03
415,360
957
R
Shanghai
67%
May-03
September-06
264,765
2,419
R
Shanghai
67%
August-05
May-08
265,522
42,278 (2)
R,S
Shanghai
67%
March-07
December-08
110,616
83,836
R
Shanghai
50% September-05
December-07
83,325
486
R
Shanghai
56%
May-02
November-05
191,230
0
R
Shanghai
56%
May-02
March-07
136,132
0
R
Shanghai
51%
March-05
April-08
157,295
18,140
R
Nanjing
100%
May-94
December-02
327,667
1,045
R
Nanjing
100%
November-00
September-03
69,649
1,003
R
Nanjing
100%
November-00
October-03
118,230
742
R
Nanjing
100%
December-03
December-07
156,357
668
R
Nanjing
100%
March-06
December-08
118,175
28,414
R
Nanjing
100%
May-04
December-07
60,796
43,567
H
Nanjing
100%
May-04
June-08
52,202
37,409
R
Chengdu
51%
December-04
April-06
40,665
40,665
S
Chengdu
51%
May-06
April-08
101,032
20,361
R,S
Guiyang
67%
November-03
October-04
14,376
996
S
Guiyang
67%
June-04
March-06
36,131
825
R
Zhuhai
90%
September-06
December-07
101,624
3,077
R,S
Suzhou
100%
November-05
January-08
39,067
2,400
R
2,926,844
333,477
R = Residential O = Office S = Shop & Retail H = Hotel & Service Apartment (1) Consists of properties held for investment with unexpired terms of lease between 35-65 years as at 31 December 2008 (2) Consists of 10,362 sqm of saleable area of shop space
23
YANLORDLAND 2008 ANNUAL REPORT
Development Schedule Summary
Properties Under Development
Project Yanlord Peninsula (Townhouse - Phase 2) (星岛仁恒，二期) Yanlord Peninsula (Apartment - Phase 1)
City
Interest Attributable
Actual Commencement Date
Estimated Completion Date GFA (sqm)
Type
Suzhou
100%
May-06
July-09
50,072
R
(星屿仁恒，一期) Yanlord Peninsula (Apartment - Phase 2) (星屿仁恒，二期) Suzhou Wuzhong Area C1 Land - Villas (苏州吴中区C1地块-别墅) Yanlord New City Gardens (Phase 2 - Section1) (仁恒星园，二期一段) Yanlord New City Gardens (Phase 2 - Section2) (仁恒星园，二期二段) Yanlord Riverside City (Phase 3)
Suzhou
100%
May-06
April-09
49,501
R
Suzhou
100%
May-06
1st Quarter 2010
74,831
R
Suzhou
100%
October-08
1st Quarter 2012
15,100
R
Zhuhai
90%
August-07
December-09
107,981
R
Zhuhai
90%
May-08 3rd Quarter 2011
217,779
R
(仁恒河滨城，三期) Yunjie Riverside Gardens (Phase 2) (运杰河滨花园，二期) Yanlord Riverside Plaza (Phase 1) (海河广场，一期) Yanlord Landmark (仁恒置地广场) Yanlord Yangtze Riverside City (Phase 1) (仁恒江湾城，一期)
Shanghai
67%
March-07 2nd Quarter 2010
99,506
R
Shanghai
51%
July-08
4th Quarter 2012
95,290
R
Tianjin
100%
October-07
4th Quarter 2010
185,589
R,S
Chengdu
100%
August-06 3rd Quarter 2010
166,790
O,S,H
Nanjing
60%
166,210
R
Total
R = Residential O = Office S = Shop & Retail H = Hotel & Service Apartment
24 YANLORDLAND 2008 ANNUAL REPORT
January-08
4th Quarter 2010
1,228,649
Development Schedule Summary
Properties Held for Future Development
Project Shanghai San Jia Gang Land Plot (仁恒滨海度假村) Shanghai New Jiangwan Urban Area Land (上海新江湾地块) Shanghai Waigaoqiao Area Land (上海森兰外高桥地块) Shanghai Qingpu District Land (上海青浦地块) Yanlord Yangtze Riverside City (Phase 2) (仁恒江湾城，二期) Yanlord Yangtze Riverside City (Phase 3-4) (仁恒江湾城, 三，四期) Nanjing Hexi New Urban Area Land (南京河西新地块) Yanlord Riverside Plaza (Phase 2) (海河广场，二期) Tianjin Haihe Land (天津海河地块 - 仁恒滨河水岸) Shenzhen Longgang District Redevelopment Project (深圳龙岗区 - 城中村改造项目) Shenzhen Longgang District Economic Residential Housing (深圳龙岗区 - 经济适用房) Yanlord Lakeview Bay (仁恒双湖湾) Yanlord Marina Centre (仁恒滨海中心) Total
Interest City Attributable
Estimated Commencement Date
Estimated Completion Date
GFA (sqm)
Type
Shanghai
67%
Under Planning
Under Planning
35,831
R
Shanghai
100%
2009
2011
65,050
R
Shanghai
100% (1)
2009
2011
158,604
R
Shanghai
51%
2009
2011
117,459
R
Nanjing
60%
2009
2012
191,100
R
Nanjing
60%
2011
2014
330,690
R
Nanjing
60%
2010
2013
93,281
R
Tianjin
100%
Under Planning
Under Planning
151,611
R,O
Tianjin
80%
Under Planning
Under Planning
326,970
R
Shenzhen
75%
Under Planning
Under Planning
390,000
R
Shenzhen
75%
Under Planning
Under Planning
144,064
R
Suzhou
100% (2)
2009
2013
331,188
R
Zhuhai
95%
2009
2015
216,582 R,O,S,H 2,552,430
R = Residential O = Office S = Shop & Retail H = Hotel & Service Apartment
(1) Subject to legal transfer of shareholding interest as provided in our SGXNET announcement dated 27 February 2009 (2) Subject to legal transfer of shareholding interest as provided in our SGXNET announcement dated 27 February 2009
25 YANLORDLAND 2008 ANNUAL REPORT
仁信治业
持之以恒
YANLORD LAND
Our Project
Showcase
Developments in a class of their own Selected Key Projects for FY2009
Tianjin
Nanjing
Chengdu
Shanghai Suzhou
Guiyang Zhuhai Shenzhen
26 YANLORDLAND 2008 ANNUAL REPORT
27 YANLORDLAND 2008 ANNUAL REPORT
Our Project Showcase
SHANGHAI Yanlord Riverside City Yanlord Riverside City carries on Yanlord’s tradition of building high-end residences as represented by Yanlord Gardens and Yanlord Riverside Gardens. The project, part of the Lianyang International Community, is located at the heart of Pudong New Area’s Administrative and Cultural Center. Adjacent to the crossing of major transportation routes of Dingxiang Road and Jinxiu Road, it offers easy connection to Lujiazui Finance and Trade Zone, Pudong International Airport, Jinqiao Export Processing Zone, Waigaoqiao Free Trade Zone and Zhangjiang Hi-tech Park where a large number of foreign invested businesses are in operation. Yanlord Riverside City is blessed with many amenities, including the 140-hectare Century Park to the south, and Shanghai Science and Technology Museum, Oriental Art Center, Tomson Golf Course within its vicinity. Yanlord Riverside City has a GFA of 740,000 m2 . The green area ratio of the project is as high as 60%. It also features a 50-meter wide boulevard, a 40-meter-wide Yangjing Creek meandering through, 7,000 m2 coast-themed sports and recreation area. Yanlord Riverside City is the culmination of Yanlord’s experience in developing fully-fitted residences. As one of the largest international communities in Shanghai, it now accommodates many senior expatriate business executives. Yanlord Riverside City has garnered several awards for its architectural design,
engineering,
landscaping,
decoration
finishing, etc. The widely acclaimed quality has made Yanlord Riverside City a market hit since its launch. To date it has ranked top in sales for residential developments in Shanghai for both 2007 and 2008.
28 YANLORDLAND 2008 ANNUAL REPORT
Jan.2008, Yanlord Riverside City won Golden Award for Quality Housing in Shanghai
Our Project Showcase
Yanlord Yangtze Riverside City
Yanlord Yangtze Riverside City
NANJING Yanlord Yangtze Riverside City Located along Yangtze River in Hexi New Area, Nanjing, Yanlord Yangtze Riverside City occupies a land area of approximately 346,900 square meters, which will be developed into a total GFA of approximately 688,000 square meters. The project is divided into four phases of which the construction of the first phase is presently undertaken.
29 YANLORDLAND 2008 ANNUAL REPORT
Our Project Showcase
Yanlord Landmark Yanlord Landmark is a key investment property project of Yanlord in Western China. Located at the heart of Chengdu CBD along major arterial roads, the project neighbours top-grade office buildings, five-star hotels and luxury department stores. It enjoys the most favorable location with the Metro Line No. 1 and other business resources in close vicinity. Yanlord Landmark has a planned GFA of approximately 166,800 m2 above ground and upon completion will incorporate office areas, serviced apartments, and a high-end shopping mall offering retail, conference, residence, and other business and recreation facilities. It is positioned to be the top-end property that represents the highest technical and service standards and will cater to the needs of MNCs who plan to locate their regional headquarters in Chengdu. Yanlord has engaged a world renowned architectural consultant as well as other renowned professional parties to contribute expertise to ensure that the project excels in all aspects ranging from engineering, landscaping to business operation; contributing to Chengdu’s integration into the global business arena. Work commenced in August 2006, Yanlord Landmark is expected to be completed in 2009 and enter full operation between 2009 and 2010. The office space of the project will meet the demand of international corporations in Chengdu with its high quality fittings and is expected to accommodate regional headquarters of big domestic and foreign companies. The serviced apartments in Yanlord Landmark, in collaboration with Fraser Hospitality from Singapore, will meet the demands of high-end business travelers, affording them with luxury and comfort during their stay in Chengdu. Yanlord Landmark will also be the epitome of the retail market of Chengdu, showcasing latest fashion of the city and the flagship stores of many international luxury brands.
30 YANLORDLAND 2008 ANNUAL REPORT
Yanlord Landmark
CHENGDU
Our Project Showcase
SUZHOU Yanlord Peninsula Yanlord Peninsula is Yanlord’s first project in Suzhou. Situated at 1818 Tongda Road, Yanlord Peninsula is a lakeside villa project in the high-end residential area of Suzhou in the vicinity of Jinji Lake and Dushu Lake. While benefiting from the serenity of the lakeside area, it is also conveniently connected to the old downtown Suzhou and Suzhou Industrial Park. Located on a peninsula protruding into the 11.52 km2 Dushu Lake, Yanlord Peninsula, comprises of 350 townhouses and duplexes, and has a total GFA of around 89,000 m2. The 1.5 km lake coast line, together with crossing canals, offers the project a panoramic view and unprecedented exclusivity. The architecture of the project draws inspiration from a coach house and seeks to provide customers with unique living experiences, and was ranked among the Top 10 Best Properties in the scenic city in 2007.
Yanlord Peninsula
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Our Project Showcase
Yanlord Riverside Plaza
TIANJIN Yanlord Riverside Plaza Yanlord Riverside Plaza represents Yanlord’s venture into the fast-growing Bohai Rim Region. Located in the traditional downtown area of Tianjin, Yanlord Riverside Plaza enjoys local commercial and historical resources. It is also connected to the city’s subway system. Yanlord Riverside Plaza occupies a land area of 95,000 m2 and has a total GFA of approximately 520,000 m2 of which approximately 340,000 m2 is above ground. The project is a modern building complex that incorporates residential apartment, hotel, office building and retail outlets. Adding a large-scale central complex and a pedestrian shopping street to the region, the office building in the northwest will also be the focal point of the project overlooking the Haihe River. Yanlord Riverside Plaza features various ecological initiatives that include a ground level green atrium. An underground green landscape will also be developed to provide perennial greenery to Tianjin. Yanlord Riverside Plaza, with multiple facets of commerce, recreation, and tourism, is set to be an iconic project in Tianjin.
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Yanlord Marina Centre
ZHUHAI Yanlord Marina Centre Yanlord Marina Centre, located along Qinglu Road (South) near the sea coast, is to be built into a landmark of Zhuhai City. Lying adjacent to Gongbei Customs Checkpoint to Macau, the project will enjoy easy access to the entrance of the planned Hong Kong-Zhuhai-Macau Bridge as well as the transport interchange of the light rail connecting Zhuhai and Guangzhou. Yanlord Marina Centre, upon completion, will be a showcase development of Zhuhai City. The total GFA of Yanlord Marina Centre will be 210,000 m2. Construction is expected to commence in 2009. The project comprises a 5star hotel, high-grade residence and retail shops. The group is in discussions with world-renowned hospitality groups to manage the hotel. The sea-view residential apartments and the shopping arcades are slated to be key highlights of Zhuhai’s future skyline.
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仁信治业
持之以恒
YANLORD LAND
Mr. Zhong Sheng Jian Chairman and CEO Mr. Zhong Sheng Jian is the founder, Chairman and CEO of Yanlord Land Group Limited and is responsible for its overall management and strategy development. His last re-election as director was on April 29, 2008. Since the 1980s, Mr. Zhong has founded and established a number of businesses in trading, manufacturing, real estate and financial services spanning China, Singapore, Hong Kong, Australia, Vietnam and Thailand. He started our property development business in the early 1990s through the setting up of our offices in Shanghai and Nanjing, which are now part of the SGX mainboard listed Yanlord Land Group Limited. Due to his investments in and contribution to various parts of China, Mr. Zhong has been awarded Honorary Citizenships in Nanjing, Zhuhai and Shanwei in the PRC. In 2005, he was also awarded the White Magnolia Award in Shanghai for his contributions to the Municipal City of Shanghai. Mr. Zhong is a member of several SingaporeChina investment and trade committees, including Singapore-Sichuan Trade and Investment Committee, Singapore-Tianjin Economic & Trade Council, Singapore-Jiangsu Cooperation Council and Network China. He is also a member of the Tianjin People’s Political Consultative Conference Standing Committee and was recently appointed as Chairman, International Affairs Committee of the Singapore Chinese Chamber of Commerce & Industry.
Board of Directors
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Mr. Zhong Siliang Executive Director Mr. Zhong Siliang is our executive director and was appointed as our director on May 11, 2006. His last re-election as director was on April 27, 2007. Since October 2005, he has held the position of assistant general manager of our Investments Department and in this capacity, Mr. Zhong Siliang assists in the evaluation of new business opportunities and conducts feasibility studies on potential property transactions for investments. He also visits potential and existing property sites to better understand market conditions for our investments. Mr. Zhong Siliang is responsible for establishing relations with architectural firms, real estate consultants and the district and national government officials, for the execution of our investments in the PRC. He also works closely with our CEO and Chairman, Mr. Zhong Sheng Jian, and assists in other group decisions. In addition, Mr Zhong Siliang assists in the overall management of Yanlord Land (Shenzhen) Co., Ltd. and is also the Deputy Director of our operations in the Group since 2007. Mr. Zhong Siliang graduated with a Bachelor Degree in Business Administration from University of Portsmouth, England in 2005.
Board of Directors
Mr. Hong Zhi Hua Executive Director
Ms. Chan Yiu Ling Executive Director
Ms. Chan Yiu Ling is our executive director and was appointed as our director on May 11, 2006. Her last re-election as director was on April 29, 2008. Since 1999, she has been assisting our Chairman and CEO, Mr. Zhong Sheng Jian, and is responsible for various administrative functions of our Group. Prior to that, she was the sales manager of Yanlord Industrial Ltd., where she managed its sales and marketing department for close to 10 years. Ms. Chan has approximately eight years of administration experience working as an administration executive in various companies before joining us. Ms. Chan graduated with a diploma from the Chinese YMCA Secretarial Course in 1982.
Mr. Hong Zhi Hua is our executive director and was appointed as our director on September 20, 2006. His last re-election as director was on April 27, 2007. Mr. Hong has also been our Executive Vice-President since May 2005 and is responsible for human resources, recruitment, and other corporate and administration matters. Prior to joining our Group, he was a director and CEO of Shanghai Hua Hong Investment Management Co., Ltd., assistant general manager of Shanghai Lujiazui Financial District Holdings and vice-president of Shanghai Waigaoqiao Free Zone Holdings. From 1992 to 1999, he was the Deputy Department Head of Shanghai Pudong New District Economics and Trade Commission and was responsible for boosting trade in the area and attracting investments. From 1985 to 1992, he was the honorary secretary for the Youth Division of the Shanghai Communications Bureau, where he was involved in the administration of the Youth Division and its related educational institute. Mr. Hong holds a doctorate in business administration from the University of South Australia and a Master’s degree in Business Administration from La Trobe University. In 1997, he graduated with a Bachelor’s degree in Business Administration from the Shanghai University, PRC.
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Board of Directors
Mr. Ronald Seah Lim Siang Lead Independent Director Mr. Ronald Seah Lim Siang is our lead independent director and was appointed to the Board on May 11, 2006. His last re-election as director was on April 29, 2008. Over a 25-year period between 1980 and 2005, he held various senior positions within the AIG Group in Singapore, initially as AIA Singapore’s Vice-President and Chief Investment Officer managing the investment portfolio of AIA Singapore and later as AIG Global Investment Corporation (Singapore) Ltd’s Vice President of Direct Investments. Between 2001 and 2005, Mr. Seah was also the Chairman of the Board of AIG Global Investment Corporation (Singapore) Ltd. From 1978 to 1980, Mr. Seah managed the investment portfolio of Post Office Savings Bank as Deputy Head of the Investment and Credit Department. Prior to that, he worked at Singapore Nomura Merchant Bank as an Assistant Manager with responsibilities covering the sale of bonds and securities and offshore (ACU) loan administration for the bank. Between 2002 and 2003, Mr. Seah served on the panel of experts of the Commercial Affairs Department of Singapore.
Mr. Seah graduated with a Bachelor of Arts and Social Sciences (second upper honors) from the then University of Singapore in 1975.
Mr. Ng Ser Miang Independent Director Mr. Ng Ser Miang is our independent director and was appointed as our director on May 11, 2006. His last reelection as director was on April 27, 2007. He has been the Chairman and founder of TIBS International Pte. Ltd. since 1981. He is also the Chairman of the National Trades Union Congress Choice Homes Co-operative Ltd. and NTUC Fairprice Cooperative Ltd. Mr. Ng has served and is serving as independent director on several public listed and private companies ranging from insurance, finance, venture capital, leisure industries and transport. Mr. Ng serves as the Chairman of Network China. He served as a member of the Asia Pacific Economic Cooperation (APEC) Business Advisory Committee (ABAC) from 2001 to September 2008. He is on the Resource Panel (Chinese Newspaper Division) of the Singapore Press Holdings Ltd. He was the Chairman of the Singapore Sports Council from 1991 to 2002. Mr. Ng was appointed a Justice of the Peace in September 2005 and was a Nominated Member of Parliament from June 2002 to January 2005. In 1999, he was also conferred the Public Service Star, a National Day Award, by the Singapore Government and awarded the Outstanding Chief Executive of the Year Award (Singapore Business Award) in 1992. Mr. Ng graduated with a Bachelor’s degree in Business Administration (honors) from the then University of Singapore and was also conferred a Fellow at the Chartered Institute of Transport (FCIT).
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Board of Directors
Ms. Ng Shin Ein Independent Director
Lieutenant-General (Retired) Ng Jui Ping Independent Director
Ms. Ng Shin Ein is our independent director and was appointed to the Board on May 11, 2006. Her last re-election as director was on April 27, 2007. She is the Regional Managing Director for Asia of Blue Ocean Associates Pte Ltd, a pan Asian firm focused on investing in and providing financing solutions to businesses. She is also in charge of the firm’s portfolio of European and U.S. Partners co-investing in Asia. Prior to this, Ms Ng was with the Singapore Exchange, where she was responsible for developing Singapore’s capital market by bringing foreign companies to list in Singapore. Additionally, she was part of the Singapore Exchange’s IPO Approval Committee, where she contributed industry perspectives to the committee, and also acted as a conduit between the marketplace and regulators. Ms Ng practiced as a corporate lawyer in Messrs Lee & Lee for a number of years where she advised on joint ventures, mergers and acquisitions and fund raising exercises. Ng Shin Ein also sits on the boards of NTUC Fairprice, and First Resources Limited, a listed palm oil company.
Lieutenant-General Ng Jui Ping (Retired) is our independent director and was appointed on September 20, 2006. His last re-election as director was on April 27, 2007. He leads his own consulting business and learning institute, August Asia Consulting Pte Ltd and Nanyang Institute of Management, respectively. He holds selective non-executive board positions including that of Independent Director on the board of SGX Mainboard-listed Pacific-Andes (Holdings) Limited. He is Advisor to Chesterton International Property Consultants Pte Ltd. General Ng has a distinguished 30-year military career that culminated with his appointment as the Chief of Defence Force, Singapore, from 1992 to 1995 and before that as the Chief of Army, Singapore, from 1990 to 1992. He was conferred a number of awards for distinguished service to Singapore, including the Meritorious Service Medal (Military) in 1995 and has been conferred prestigious awards by regional countries. . Upon retiring from his military career, General Ng chose to enter the private sector. The IT/Internet company he co-founded, Horizon Technologies Limited was listed on SGX Mainboard in Jan 2000 and he cashed-out in late 2004. Between 1995 and 2008, he held various positions including Deputy Chairman of the Central Provident Fund Board, Singapore; Director of the Port of Singapore Authority International (PSAI), the secondlargest Port Company in the World, and is Chairman of its China and North East Asia region. Chairman of Chartered Industries of Singapore Pte Ltd; Corporate Advisor, Singapore Technologies Pte Ltd; Corporate Advisor, Singapore Technologies Engineering Ltd; Chairman, Singapore Technologies Automotive Ltd and Chairman, Ordnance Development & Engineering of Singapore (1996) Pte Ltd. General Ng holds a Master of Arts degree in History from Duke University, USA and completed the Advanced Management Programme in Harvard Business School, Harvard University, USA. He is a keen golfer and is VicePresident of the Football Association of Singapore.
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仁信治业
持之以恒
YANLORD LAND
Key
Management Mr. Chen Yue has been our Executive Vice-President since April 2005 and is responsible for projects development. He has more than 10 years of management experience as the general manager of Yanlord Investment (Nanjing) Co., Ltd, managing our investments in Nanjing from 1994 to 2005. Prior to joining Yanlord, he was a manager of Lufeng City Finance and Commercial Trading Co., Ltd from 1992 to 1993. He was also the head of three other factories in Lufeng City from 1978 to 1991, namely the Lufeng City Erqing Agency Plastic Material Factory, Lufeng City Donghai Paper Factory and Lufeng City Donghai Glass Factory.
Ms. Tan Shook Yng has been our Group General Counsel and Company Secretary since 2006. She is responsible for our corporate planning and overseeing our legal and regulatory compliance functions. She has more than 10 years of experience as a lawyer practicing cross-border corporate, commercial and corporate finance laws, including areas of mergers and acquisitions, restructuring, initial public offerings, rights and bond issues, private placements, joint ventures, investment advice, stock exchange issues and employee share schemes. Prior to joining our Group, she was a partner of a leading Singapore law firm, co-heading its Greater China Practice Group. Ms. Tan’s prior work experience includes a position as the Senior Assistant Registrar of the Registry of Companies & Businesses of Singapore (now known as Accounting and Corporate Regulatory Authority of Singapore), and a senior associate with international law firm, Baker & McKenzie. She is an advocate and solicitor of the Supreme Court of Singapore and a member of the Singapore Academy of Law.
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Mr. Jim Chan Chi Wai has been our Group Financial Controller since 2003. He is responsible for our day-to-day finance and accounting functions and is also involved in the supervision of our finance staff. He has more than 10 years of experience as an auditor and accountant. Prior to joining our company, he was the financial controller of Komark Hong Kong Co., Ltd., a subsidiary of Komark Corp Berhad, a multinational company listed in Malaysia, for approximately two years. He was also a senior accountant at Cathay International Limited, a multinational company with investments in the United Kingdom and the PRC from 1997 to 2001 and senior audit accountant at Price Waterhouse Coopers from 1993 to 1997. Mr. Chan graduated with a Bachelor of Arts in Accountancy with Second Class Honors, Upper Division, from the City University of Hong Kong in 1993. He is a certified public accountant registered with the Hong Kong Institute of Certified Public Accountant and a fellow of the Association of Chartered Certified Accountants, Hong Kong.
Mr. Zhuang Hui Ping has been the General Manager of our Shanghai operations since 2005 and is responsible for the overall management of our business and properties in Shanghai. From 2004 to 2005, he was responsible for managing our real estate business in Suzhou as a general manager of Suzhou Zhonghui Property Development Co., Ltd. Prior to that, he was the assistant general manager of Yanlord Investment (Nanjing) Co., Ltd from 1996 to 2004. Between 1987 and 1999, he was the assistant general manager of Yanlord Industrial (Shenzhen) Co., Ltd and was also responsible for the sales and marketing policies of the business. Between 1995 and 1996, he was the assistant manager of Riverfront Jin Feng Trading Co., Ltd as an assistant manager. Mr Zhuang graduated from PLA Nanjing Institute of Politics with a Bachelor’s degree.
Key Management
Mr. Zhang Hao Ning has been the General Manager of our Nanjing operations since 2005 and is responsible for the overall management of our business in Nanjing. He was our assistant general manager between 2000 and 2005, and the manager of our operations department from 1994 to 2000. Prior to joining us, he worked as a cost engineer in the Architecture Design Institute, Nanjing and Hong Kong Changjiang Pte Ltd, Nanjing between 1990 and 1994, and was responsible for the management of their engineering budgets and was also involved in the design work of an architecture design institute. Mr. Zhang obtained a Master degree in Economics from the Nanjing University in the PRC in 1995. He is also a registered cost engineer with the Jiangsu Department of Personnel since 1998.
Mr. Xiao Zujun has been the General Manager of our operations in Suzhou since November 2006 and is responsible for the overall business in Suzhou. Prior to this, Mr. Xiao was the assistant general manager of our Suzhou company from 2004 to 2005. Between 2002 and 2004, Mr. Xiao was the general manager of our Chengdu business. In 1992, Mr. Xiao participated in the setting up of Guizhou Hanfang Group and assumed the position of the group’s vice general manager. In the same year, he helped set up Guizhou Hanfang Real Estate Development Company and took responsibilities as the company’s general manager. From 1983 to 1992, Mr. Xiao worked for the Personnel Department of Guizhou University. Mr. Xiao Zujun graduated from Guizhou University in 1983 with a Bachelor’s degree in History. Mr. Xiao qualified as a practicing lawyer in China since 1988.
Mr. Huang Zhong Xin has been the General Manager of our Chengdu operations since 2005 and is responsible for the overall management of our operations in Chengdu. Since 2002, he served as an assistant general manager and later the general manager of Yanlord Industrial (Chengdu) Co., Ltd. He was involved in the day to day operations of the company. Mr. Huang has been with the Yanlord group since 1989. He was first involved in the international trading business of Yanlord Holdings until 1993. Subsequently, he was the assistant general manager of Yanlord Industrial (Shenzhen) Co., Ltd and was responsible for setting up of industrial centres for two years. From 1994 to 2002, he was an assistant manager at Yanlord Investment (Nanjing) Co., Ltd and acting general manager of Yanlord Property Management Co., Ltd and was involved in the marketing, project planning and property management functions of these companies. He graduated with a Bachelor’s degree in Literature from Beijing Humanities Correspondence University in 1988.
Mr. Lam Ching Fung has been the General Manager of our Zhuhai operations since 2005 and is responsible for the overall management of our operations in Zhuhai. He was previously the director of the Zhuhai Special Economic Zone Longshi Bottle Capping Factory where he was responsible for the overall management of the business. Mr. Lam has completed an executive course in Advanced Business Management conducted by the Qinghua University, Zhuhai.
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Key Management
Mr. Dai Gang has been the general manager of our Shenzhen operations since February 2008 in addition to his responsibilities as our Group’s chief engineer and the vice general manager of our Shanghai subsidiary. Mr. Dai joined our Shanghai subsidiary in March 1993 and worked as an electric engineer to project manager, department manager, deputy chief engineer and vice general manager. Mr. Dai has been chairing the committee for fully-fitted apartments under the Residential Property Developers’ Union, Shanghai Federation of Industry & Commerce since October 2005. Mr. Dai graduated from Shanghai Textile Technology College and majored in Industrial Automation. Mr. Dai is a certified supervisory engineer.
Mr. Lin Jun Ting joined our Tianjin operations as Assistant General Manager in January 2004 and, since December 2008, has been responsible for the overall management of our Tianjin business. Prior to joining Yanlord, he served as director and general manager of Hong Kong Art and Decoration Co. Ltd., and as director and general manager at a catering management company in Canada. Mr. Lin graduated from LaSalle College of Montreal Canada in 1993 and majored in hotel management.
Mr. Lin Hai Tao has served as our Assistant General Manager of our operations in Guiyang since October 2007 and is responsible for the overall planning and management of our business in Guiyang. Prior to the transfer to our Guiyang office, he served as assistant general manager of our Shanghai Office since 2003. From 2001 to 2003, Mr. Lin worked in our Guiyang subsidiary as an assistant general manager. Before joining our company, Mr. Lin was the director and assistant general manager of Shanghai Kam Wan Real Estate Co., Ltd., overseeing its sales and administrative functions. Mr. Lin obtained a Master degree in Business Administration in Real Estate from Chongqing University in 2003.
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Mr. Chung Chiu Yan has been an Executive Director of one of our subsidiaries, Yanlord Investment (Nanjing) Co., Ltd. since 2004. Prior to joining us, he worked as an executive at Guangdong Province Lufeng Supplies Association for five years. Between 1980 and 1985, he worked at Guangdong Province Lufeng City West River Sanitisation Factory. He was a teacher at Guangdong Province Lufeng New Light Primary School from 1975 to 1980. Mr. Chung graduated from China Guangdong Province Lufeng Longshan High School in 1965.
Mr. Zheng Xi has been serving as the Vice-Chairman on the board of one of our subsidiaries, Yanlord Investment (Nanjing) Co., Ltd. since 1995 and is responsible for the day to day operations of the Group’s business in Nanjing. Prior to joining us, Mr. Zheng was the assistant general manager of Guangdong Province Shenzhen Yanlord Huayou Co., Ltd. for five years. Between 1969 and 1988, he was the deputy supervisor of Guangdong Province Lufeng Supplies Association. Mr. Zheng majored in business management in the Guangdong Province China Finance and Trade Management College and graduated in 1986.
Corporate Governance Statement Yanlord Land Group Limited (“Company” and its group of companies, “Group”) is committed to complying with the Code of Corporate Governance 2005 (“Code”) so as to safeguard the interests of the shareholders (“Shareholders”). This statement outlines the Company’s corporate governance processes and activities that were in place during the financial year. The Company aims to improve its corporate governance processes in line with the Code.
BOARD MATTERS Principle 1:
Board’s Conduct of Affairs
The principal functions of the board of directors of the Company (“Board”) include, among others, supervising the overall management and performance of the business and affairs of the Group and approving the Group’s corporate and strategic policies and direction. Matters which are specifically reserved for the Board’s approval include, among others, significant corporate matters and major undertakings. The Board dictates the strategic direction and management of the Company through quarterly reviews of the financial performance of the Group. To facilitate effective management, certain functions of the Board have been delegated to various Board’s committees, namely, the Audit Committee (“AC”), the Nominating Committee (“NC”), the Remuneration Committee (“RC”) and the Risk Management Committee (“RMC”) (collectively, “Board Committees”). The Company’s Articles of Association (“AA”) are sufficiently flexible to allow a Director to participate at a meeting via telephone, video conference or by means of similar communication equipment. In the course of the financial year under review, the number of meetings held and attended by each of the Board and Board Committees is as set out below: BOARD Meetings Directors
AC Meetings
NC Meetings
RC Meetings
RMC Meetings
Held* Attendance Held* Attendance Held* Attendance Held* Attendance Held* Attendance
Mr. Zhong Sheng Jian
6
6
–
–
1
1
–
–
1
1
Mr. Zhong Siliang
6
6
–
–
–
–
–
–
–
–
Ms. Chan Yiu Ling
6
6
–
–
–
–
–
–
–
–
Mr. Hong Zhi Hua
6
6
–
–
–
–
–
–
–
–
Mr. Ronald Seah Lim Siang
6
6
4
4
1
1
1
1
–
–
Mr. Ng Ser Miang
6
4
–
–
1
1
–
–
1
0
Ms. Ng Shin Ein
6
6
4
4
–
–
1
1
1
1
Lt-Gen (Ret) Ng Jui Ping
6
6
4
4
–
–
1
1
1
1
Notes: *:
Reflects the number of meetings held during the time that the director held office.
-:
Indicates that the director was not a member of that committee during the year.
New directors, upon appointment, are given information on the Group’s business, structure and corporate and strategic direction. The directors are also encouraged to visit the development sites of the Group as and when time permits, and to receive further relevant briefings, particularly on relevant new laws and regulations, from time to time, if necessary.
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YANLORDLAND 2008 ANNUAL REPORT
Corporate Governance Statement Principle 2:
Board Composition and Guidance
The Board comprises: 1.
Mr. Zhong Sheng Jian:
Chairman and Chief Executive Officer
2.
Mr. Zhong Siliang:
Executive Director
3.
Ms. Chan Yiu Ling:
Executive Director
4.
Mr. Hong Zhi Hua:
Executive Director
5.
Mr. Ronald Seah Lim Siang:
Lead Independent Director
6.
Mr. Ng Ser Miang:
Independent Director
7.
Ms. Ng Shin Ein:
Independent Director
8.
Lt-Gen (Ret) Ng Jui Ping:
Independent Director
There is a strong and independent element on the Board, with independent directors making up half of the Board. The Board believes that the size and composition of the Board, their experience and core competencies in various fields are appropriate and effective, taking into consideration the scope and nature of operations of the Company. Principle 3:
Chairman and Chief Executive Officer
Mr. Zhong Sheng Jian currently fulfills the role of Chief Executive Officer (“CEO”) and Chairman of the Board (“Chairman”). The Board has not adopted the recommendation of the Code to have separate directors appointed as the Chairman and the CEO. This is because the Board is of the view that there is a sufficiently strong independent element on the Board to enable independent exercise of objective judgement on the corporate affairs of the Group. Pursuant to the recommendation in the Code, the Company has also appointed Mr. Ronald Seah Lim Siang as its lead independent director. The Chairman, Mr. Zhong Sheng Jian is responsible for, among others, exercising control over the quality, quantity and timeliness of the flow of information between the management of the Company (“Management”) and the Board, and assisting in ensuring compliance with the Company’s guidelines on corporate governance. Principle 4: Principle 5:
Board Membership Board Performance
Nominating Committee (“NC”) The NC makes recommendations to the Board on all board appointments. The majority of the members of the NC, including its chairman, are independent. The chairman of the NC is Mr. Ng Ser Miang who is not directly associated with a substantial shareholder as prescribed in the Code. The other 2 members are Mr. Zhong Sheng Jian and Mr. Ronald Seah Lim Siang. The NC is guided by its terms of reference which set out its responsibilities. The NC will be responsible for: (a)
reviewing and recommending the nomination and re-election of our directors having regard to the director’s contribution and performance;
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YANLORDLAND 2008 ANNUAL REPORT
Corporate Governance Statement (b)
determining on an annual basis whether or not a director is independent; and
(c)
assessing the performance of our Board and contribution of each director to the effectiveness of the Board.
New directors are appointed by the Board after taking into consideration the recommendation made by the NC of such Board appointments. The AA of the Company requires new directors appointed during the year to submit themselves for re-election at the next Annual General Meeting (“AGM”) of the Company. The AA also requires one-third of the Board to retire by rotation at every AGM. This means that no director may stay in office for more than three years without being re-elected by shareholders. The Company has in place a system to assess the performance of the Board as a whole and the contribution of each director to the effectiveness of the Board (“Performance Assessment”). The results of the Performance Assessment were reviewed by the NC and circulated to the Board for consideration thereafter. The NC, in considering the re-appointment of any director, evaluates the performance of the director. The assessment parameters include attendance record at meetings of the Board and Board Committees, intensity of participation at meetings and the quality of interventions. The Board adopts the independence test recommended by the Code. Taking into account the independence test, the NC considers and determines the independence of directors. Key information regarding the directors is set out in this Annual Report under the heading entitled “Board of Directors”. Principle 6:
Access to Information
The Board was provided with financial information, as well as relevant background information and documents relating to items of business to be discussed at Board meetings prior to the scheduled meetings. The directors may (whether individually or as a group), in the furtherance of their duties, take independent professional advice (e.g. auditors), if necessary, at the Company’s expense. The Board has separate and independent access to the Company’s Management and Company Secretary at all times. The Company Secretary attends all Board and Board Committees meetings. The role of the Company Secretary includes responsibility for ensuring that Board procedures are followed and applicable rules and regulations are complied with. Under the direction of the Chairman, the Company Secretary also ensures good information flows within the Board and its Board Committees and between the Management and independent directors.
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YANLORDLAND 2008 ANNUAL REPORT
Corporate Governance Statement REMUNERATION MATTERS Principle 7: Principle 8: Principle 9:
Procedure for Developing Remuneration Policies Level and Mix of Remuneration Disclosure of Remuneration
Remuneration Committee (“RC”) The RC comprises 3 members, all of whom are independent directors. The chairman of the RC is Lt-Gen (Ret) Ng Jui Ping and the other 2 members are Mr. Ronald Seah Lim Siang and Ms. Ng Shin Ein. The RC is guided by its terms of reference, which set out its responsibilities. The RC recommends to our Board, a framework of remuneration for the directors and reviews the remuneration packages of the executive directors. The recommendations of our RC are submitted for endorsement by the Board. All aspects of remuneration, including but not limited to directors’ fees, salaries, allowances, bonuses and benefits in kind are reviewed by our RC. The RC also reviews the remuneration of senior management and administers the Company’s Share Option Scheme 2006. No director or member of the RC has been involved in deciding his own remuneration package. The total remuneration mix for the CEO, executive directors, executive officers and key employees of the Group comprises three key components, namely, basic salary, annual performance incentive and other benefits including benefitsin-kind. Save for directors’ fees, which have to be approved by the Shareholders at every AGM, the independent directors do not receive any remuneration from the Company. The remuneration (which includes basic salaries, annual performance incentive, directors’ fees and other benefits including benefits-in-kind) paid or payable to each of our directors, executive officers and other key employees as at 31 December 2008 based on their respective employment periods served in FY2008, in bands of S$250,000, are as follows: (1)
Remuneration of Directors for FY2008
Remuneration Bands
Annual Performance Basic Salary Incentive
Directors’ Fees
Other benefits including benefits in kind
Total
S$3,500,000 to S$3,749,999 Zhong Sheng Jian
7%
91%
0
2%
100%
Chan Yiu Ling
74%
26%
0
0
100%
Hong Zhi Hua
74%
26%
0
0
100%
Zhong Siliang
79%
21%
0
0
100%
Ronald Seah Lim Siang
0
0
100%
0
100%
Ng Ser Miang
0
0
100%
0
100%
Ng Shin Ein
0
0
100%
0
100%
Ng Jui Ping
0
0
100%
0
100%
Below S$250,000
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YANLORDLAND 2008 ANNUAL REPORT
Corporate Governance Statement (2)
Remuneration of Executive Officers and Other Key Employees (who are not also directors) for FY2008
Remuneration Bands
No. of Executive Officers and Key Employees
S$250,000 to S$499,999
5
Below S$250,000
10
Total:
15
The Group’s executive officers and other key employees’ remuneration are presented by number of employees in the bands of S$250,000 as set out above. This gives a macro perspective of the remuneration pattern of the executive officers and key employees while maintaining confidentiality of staff remuneration matters. (3)
Employees who are immediate family members (i.e. spouse, child, adopted child, step-child, brother, sister and parent) of a director or the CEO, and whose remuneration exceed S$150,000 during the year. Two key employees whose remuneration exceeds S$150,000 during FY2008 are related to our Chairman and CEO, Mr. Zhong Sheng Jian and our Executive Director, Mr. Zhong Siliang. The remuneration of both key employees are within the remuneration band of below S$250,000 each.
The Company has the following share option schemes: (1)
Yanlord Land Group Pre-IPO Share Option Scheme; and
(2)
Yanlord Land Group Share Option Scheme 2006 (collectively, the “Schemes”).
Details of the Schemes are set out in the Report of the Directors.
ACCOUNTABILITY AND AUDIT Principle 10:
Accountability
The Board understands its accountability to the shareholders for the Group’s performance, and Management understands its role in providing all members of the Board with financial accounts and information, which present a balanced and comprehensive assessment of the Group’s performance, financial position and prospects on a regular basis. The Management is accountable to the Board and presents to the Board, quarterly and full-year financial results after the same are reviewed by the Audit Committee. The Board reviews and approves the results and authorises the release of results to the public via SGXNET.
45
YANLORDLAND 2008 ANNUAL REPORT
Corporate Governance Statement Principle 11:
Audit Committee (“AC”)
The AC comprises 3 independent directors. The chairman of the AC is Mr. Ronald Seah Lim Siang and the other 2 members are Ms. Ng Shin Ein and Lt-Gen (Ret) Ng Jui Ping. The AC is guided by its terms of reference which set out its responsibilities. Our AC will assist our Board in discharging its responsibility to safeguard our assets, maintain adequate accounting records, develop and maintain effective systems of internal control, with the overall objective of ensuring that the Management creates and maintains an effective control environment in our Group. Our AC will provide a channel of communication between the Board, the Management and our external auditors on matters relating to audit. Our AC will meet periodically to perform the following functions: (a)
review with the external auditors and where applicable, our internal auditors, their audit plans, their evaluation of the system of internal accounting controls, their letters to Management and the Management’s response;
(b)
review quarterly and annual financial results announcements before submission to the Board for approval, focusing in particular on changes in accounting policies and practices, major risk areas, significant adjustments resulting from the audit, compliance with accounting standards and compliance with the SGXST Listing Manual and any other relevant statutory or regulatory requirements;
(c)
review the internal control procedures and ensure co-ordination between the external auditors and the Management, and review the assistance given by the Management to the auditors, and discuss problems and concerns, if any, arising from audits, and any matters which the auditors may wish to discuss (in the absence of the Management, where necessary);
(d)
review and discuss with the external auditors any suspected fraud or irregularity, or suspected infringement of any relevant laws, rules or regulations, which has or is likely to have a material impact on our operating results or financial position, and the Management’s response;
(e)
consider and recommend the appointment or re-appointment of the external auditors and matters relating to the resignation or dismissal of the auditors;
(f)
review interested person transactions (if any) falling within the scope of Chapter 9 of the Listing Manual;
(g)
review potential conflicts of interest, if any;
(h)
undertake such other reviews and projects as may be requested by the Board, and report to the Board its findings from time to time on matters arising and requiring the attention of our AC; and
(i)
generally undertake such other functions and duties as may be required by statute or the SGX-ST Listing Manual, or by such amendments as may be made thereto from time to time.
46
YANLORDLAND 2008 ANNUAL REPORT
Corporate Governance Statement Our AC meets, at a minimum, on a quarterly basis. In the event that a member of the AC is interested in any matter being considered by the AC, he will abstain from reviewing that particular transaction or voting on that particular resolution. If necessary, the AC also meets with the internal and external auditors without the presence of Management. The internal and external auditors have unrestricted access to the AC and vice versa. The AC has been given full access to and co-operation of the Management and has reasonable resources to enable it to discharge its function properly. The AC, having reviewed all non-audit services provided by the external auditors to the Group in FY2008, is satisfied that the nature and extent of such services would not affect the independence of the external auditors. Principle 12:
Internal Controls
The Board is responsible for the Company’s internal control measures to safeguard shareholders’ investments. The internal controls are intended to provide reasonable but not absolute assurance against material misstatements or losses and include the safeguarding of assets, the maintenance of proper accounting records, the reliability of financial information, compliance with appropriate legislations, regulations and best practices, and the identification and containment of business risks.
Risk Management Committee (“RMC”) The RMC comprises 4 members. The chairman of the RMC is Ms. Ng Shin Ein and the other 3 members are Mr. Zhong Sheng Jian, Mr. Ng Ser Miang and Lt-Gen (Ret) Ng Jui Ping. The RMC is guided by its terms of reference which set out its responsibilities including: (a)
identifying, measuring, managing and controlling risks that may have a significant impact on our property development activities;
(b)
reviewing and assessing our risk related policies and methodologies; and
(c)
considering and reviewing matters that may have a significant impact on the stability and integrity of the property market in China.
The Board and AC are satisfied that there are adequate internal controls in the Company. Principle 13:
Internal Audit
The Group has an in-house internal audit function (“Internal Audit”) that is independent of the activities it audits. The Internal Audit reports directly to the AC chairman, and administratively to the Chairman and CEO. The key role of the Internal Audit is to promote effective internal control in the Group and to monitor the performance and effective application of internal audit procedures. The Internal Audit is expected to meet the standard set by internationally recognised professional bodies including the Standards for the Professional Practice of Internal Auditing set by The Institute of Internal Auditors. The AC is satisfied that the Company’s internal audit function is adequately resourced.
47
YANLORDLAND 2008 ANNUAL REPORT
Corporate Governance Statement COMMUNICATION WITH SHAREHOLDERS Principles 14 & 15:
Communication with Shareholders
In line with continuous disclosure obligations of the Company, the Board’s policy is that shareholders be informed promptly of any major development that may have a material impact on the Group’s performance. Information is communicated to shareholders on a timely basis, through annual reports that are to be issued to all shareholders within the mandatory period, quarterly financial statements announcements, press releases and other relevant announcements via SGXNET. The Company does not practice selective disclosure. The Company operates its corporate website at www.yanlordland.com through which shareholders will be able to access updated information on the Group. The website provides corporate announcements, press releases and other information of the Group. At the AGM, shareholders will be given the opportunity to express their views and make enquiries regarding the business and operations of the Group. Separate resolutions are proposed for substantially separate issues at the AGM.
DEALINGS IN SECURITIES The Company has adopted and implemented an internal compliance code to provide guidance to its Directors and key employees in relation to the dealings in its securities issued by the SGX-ST. Directors and key employees who have access to material price sensitive information are prohibited from dealing in securities of the Company prior to the announcement of a matter that involves material unpublished price sensitive information. They are also prohibited from dealing in the Company’s securities one month prior to the announcement of the Company’s half year and full year financial results and 14 days before the announcement of the Company’s first quarter and third quarter financial results.
48
YANLORDLAND 2008 ANNUAL REPORT
Report of the Directors The directors present their report together with the audited consolidated financial statements of the Group and the balance sheet and statement of changes in equity of the Company for the financial year ended December 31, 2008.
1
DIRECTORS The directors of the Company in office at the date of this report are: Zhong Sheng Jian Zhong Siliang Chan Yiu Ling Hong Zhi Hua Ronald Seah Lim Siang Ng Ser Miang Ng Shin Ein Ng Jui Ping
2
ARRANGEMENTS TO ENABLE DIRECTORS TO ACQUIRE BENEFITS BY MEANS OF THE ACQUISITION OF SHARES AND DEBENTURES Neither at the end of the financial year nor at any time during the financial year did there subsist any arrangement whose object is to enable the directors of the Company to acquire benefits by means of the acquisition of shares or debentures in the Company or any other body corporate, except for the options mentioned in paragraph 5 of the Report of the Directors.
49
YANLORDLAND 2008 ANNUAL REPORT
Report of the Directors 3
DIRECTORS’ INTERESTS IN SHARES AND DEBENTURES The directors of the Company holding office at the end of the financial year had no interests in the share capital and debentures of the Company and related corporations as recorded in the register of directors’ shareholdings kept by the Company under Section 164 of the Singapore Companies Act (“Act”) except as follows: Holdings registered in the name of directors Name of directors and companies in which interests are held
At beginning of year
At end of year
1,987,000
1,987,000
Holdings in which directors are deemed to have an interest At beginning of year
At end of year
The Company a.
Ordinary shares Zhong Sheng Jian(1) Zhong Siliang
20,000
20,000
–
–
(2)
20,000
20,000
5,000
5,000
(3)
310,000
310,000
–
–
Chan Yiu Ling Hong Zhi Hua
Ronald Seah Lim Siang
50,000
50,000
–
–
200,000
300,000
–
–
38,000
38,000
–
–
Ng Ser Miang
–
500
–
–
Ng Shin Ein
–
250
–
–
Ng Ser Miang Ng Shin Ein b.
1,271,000,000 1,277,514,000
Convertible notes due 2012 (S$’000)
(1)
Zhong Sheng Jian is deemed to be interested in 1,277,514,000 ordinary shares in the Company held by Yanlord Holdings Pte. Ltd. (“YHPL”). YHPL is a company which is owned by Zhong Sheng Jian (95% shareholding interest) and his spouse (5% shareholding interest).
(2)
5,000 shares in the Company held by the spouse of Chan Yiu Ling.
(3)
Interest held via nominee account.
50
YANLORDLAND 2008 ANNUAL REPORT
Report of the Directors 3
DIRECTORS’ INTERESTS IN SHARES AND DEBENTURES (Cont’d) The directors’ beneficial interest in other related corporations’ shares and debentures were as follows: Holdings registered in the name of directors Name of directors and companies in which interests are held
Holdings in which directors are deemed to have an interest
At beginning of year
At end of year
At beginning of year
At end of year
95,000,000
95,000,000
5,000,000
5,000,000
–
–
1
1
–
–
1
1
Immediate holding company Yanlord Holdings Pte. Ltd. (Ordinary shares) Zhong Sheng Jian Related corporations (i)
Yanlord Capital Pte. Ltd. (Ordinary shares) Zhong Sheng Jian
(ii)
Yanlord Industries Pte. Ltd. (Ordinary shares) Zhong Sheng Jian
By virtue of Section 7 of the Singapore Companies Act, Zhong Sheng Jian is deemed to have an interest in the Company and all the related corporations of the Company. The directors’ interest in the shares and convertible notes of the Company as at January 21, 2009 were the same as at December 31, 2008.
4
DIRECTORS’ RECEIPT AND ENTITLEMENT TO CONTRACTUAL BENEFITS Except as disclosed in the financial statements, since the beginning of the financial year, no director has received or become entitled to receive a benefit which is required to be disclosed under Section 201(8) of the Act, 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 other than salaries, bonuses and other benefits. Certain directors received remuneration from related corporations in their capacity as directors and/or executives of those related corporations.
51
YANLORDLAND 2008 ANNUAL REPORT
Report of the Directors 5
SHARE OPTIONS AND CONVERTIBLE NOTES
5.1
Yanlord Land Group Pre-IPO Share Option Scheme (“Pre-IPO ESOS”) (a)
On June 21, 2006, the options to subscribe for an aggregate of 14,592,000 ordinary shares in the capital of the Company pursuant to the Pre-IPO ESOS were duly granted. The Pre-IPO ESOS is non-recurring and there will be no further issue of any options under this Scheme. The options under the Pre-IPO ESOS grant the right to the holder to subscribe for new ordinary shares of the Company at a discount of fifteen percent (15%) of the IPO offer share price of $1.08. The options granted under the Pre-IPO ESOS will be exercisable after the second anniversary of the date of grant of the options and all options must be exercised before the fifth anniversary from the date of grant of the options. Each option grants the holder the right to subscribe for one ordinary share in the Company. The options may be exercised in full or in part thereof. The Pre-IPO ESOS is administered by the Pre-IPO Share Option Management Committee (the “PreIPO ESOS Committee”) comprising the following members: Zhong Sheng Jian Zhong Siliang Chan Yiu Ling Ronald Seah Lim Siang
Chairman and Chief Executive Officer Executive Director Executive Director Lead Independent Director
In exercising its discretion, the Pre-IPO ESOS Committee must act in accordance with any guidelines that may be provided by the Board of Directors. (b)
(c)
The details of the movement of the options granted under the Pre-IPO ESOS during the financial year are set out below:
Date of grant
Balance at beginning of year
Granted
Exercised
June 21, 2006
13,032,000
–
(5,520,000)
Lapsed
Exercise period
(110,000)
7,402,000
June 22, 2008 to June 20, 2011
$0.92
The details of share options granted under the Pre-IPO ESOS to the directors of the Company are as follows:
Options granted during the year
Aggregate options granted since commencement of Pre–IPO ESOS up to end of year
Aggregate options lapsed since commencement of Pre–IPO ESOS up to end of year
Aggregate options outstanding as at end of year
Chan Yiu Ling
–
700,000
–
700,000
Hong Zhi Hua
–
300,000
–
300,000
Zhong Siliang
–
300,000
–
300,000
Directors
52
Exercise price per share
Balance at end of year
YANLORDLAND 2008 ANNUAL REPORT
Report of the Directors 5
SHARE OPTIONS AND CONVERTIBLE NOTES (Cont’d)
5.1
Yanlord Land Group Pre-IPO Share Option Scheme (“Pre-IPO ESOS”) (Cont’d) The directors’ interest in the options of the Company as at January 21, 2009 were the same as at December 31, 2008. (d)
5.2
During the financial year, (i)
no participant to the Pre-IPO ESOS is a controlling shareholder of the Company nor its associates; and
(ii)
save as disclosed above, no participant to the Pre-IPO ESOS received options which represent 5% or more of the total number of options available under the Pre-IPO ESOS.
Yanlord Land Group Share Option Scheme 2006 (“ESOS 2006”) The ESOS 2006 will provide eligible participants with the opportunity to participate in the equity of the Company and motivate them towards better performance through increased dedication and loyalty. The aggregate number of shares that may be issued or issuable under the plan at any time may not exceed 15% of the then issued share capital. The Remuneration Committee (“RC”) comprises 3 independent directors, and they are Ng Jui Ping, Ronald Seah Lim Siang and Ng Shin Ein. The RC administers the ESOS 2006. Options may be granted to employees and directors of the Company or any of the related entities, which include the subsidiaries or any entities in which the Company holds a substantial ownership interest, including any such employees or directors who are associates of the controlling shareholder. The controlling shareholder is not eligible to participate in the ESOS 2006. In general, the plan administrator determines the exercise price of an option. The exercise price may be a fixed or variable price related to the fair market value of the ordinary shares. The term of each award will be stated in the award agreement. The term of an award will not exceed 10 years from the date of the grant, or five years from the date of grant in the case of options granted to non-executive directors or employees of related entities other than subsidiaries. In general, the plan administrator determines, or the award agreement specifies, the vesting schedule. The Board of Directors may at any time amend, suspend or terminate the ESOS 2006. Amendments to the plan are subject to shareholder approval to the extent required by law, or stock exchange rules or regulations. Additionally, shareholder approval is specifically required to increase the number of shares available for issuance under the plan or to extend the term of an option beyond 10 years. Unless terminated earlier, the plan will expire and no further awards may be granted after the tenth anniversary of the shareholder’s approval of the plan. This scheme will continue to be in force at the discretion of the RC subject to a maximum period of 10 years commencing on the date the ESOS 2006 was adopted by the Company in general meeting. However, ESOS 2006 may continue beyond the above stipulated period with the approval of shareholders by ordinary resolution in general meeting and of any relevant authorities that may then be required. During the financial year, no option was granted under the ESOS 2006.
53
YANLORDLAND 2008 ANNUAL REPORT
Report of the Directors 5
SHARE OPTIONS AND CONVERTIBLE NOTES (Cont’d)
5.3
Convertible Notes In 2007, the Company issued convertible notes as disclosed in Note 20 to the financial statements.
6
OPTIONS EXERCISED During the financial year, 5,520,000 shares were issued pursuant to the exercise of options granted under the Pre-IPO ESOS. Save as disclosed above, no share of the Company or any corporation in the Group was allotted and issued by virtue of the exercise of options to take up unissued shares of the Company or any corporation in the Group.
7
UNISSUED SHARES UNDER OPTIONS Save as disclosed above, there was no option granted by the Company or any corporation in the Group to any person to take up unissued shares of the Company or any corporation in the Group as at the end of the financial year.
8
AUDIT COMMITTEE At the date of this report, the Audit Committee comprises the following members: Ronald Seah Lim Siang Ng Jui Ping Ng Shin Ein
Chairman and Lead Independent Director Independent Director Independent Director
The Audit Committee carried out its functions in accordance with Section 201B(5) of the Singapore Companies Act, Cap. 50. The functions performed are detailed in the Corporate Governance Report. The Audit Committee has recommended to the directors the nomination of Deloitte & Touche LLP for reappointment as external auditors of the Group at the forthcoming Annual General Meeting of the Company.
54
YANLORDLAND 2008 ANNUAL REPORT
Report of the Directors 9
AUDITORS The auditors, Deloitte & Touche LLP, have expressed their willingness to accept re-appointment.
ON BEHALF OF THE DIRECTORS
Zhong Sheng Jian
Chan Yiu Ling
March 27, 2009
55
YANLORDLAND 2008 ANNUAL REPORT
Independent Auditors’ Report To the Members of Yanlord Land Group Limited We have audited the accompanying financial statements of Yanlord Land Group Limited (the Company) and its subsidiaries (the Group) which comprise the balance sheets of the Group and the Company as at December 31, 2008, the profit and loss statement, statement of changes in equity and cash flow statement of the Group and the statement of changes in equity of the Company for the year then ended, and a summary of significant accounting policies and other explanatory notes, as set out on pages 58 to 113.
Management’s Responsibility 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: devising and maintaining a system of internal accounting controls sufficient to provide a reasonable assurance that assets are safeguarded against loss from unauthorised use or disposition; and transactions are properly authorised and that they are recorded as necessary to permit the preparation of true and fair profit and loss statement and balance sheets and to maintain accountability of assets; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances.
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 whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation 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 control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion In our opinion, (a)
the consolidated financial statements of the Group and the balance sheet and statement of changes in equity of the Company are properly drawn up in accordance with the provisions of the Act and Singapore Financial Reporting Standards so as to give a true and fair view of the state of affairs of the Group and of the Company as at December 31, 2008 and of the results, changes in equity and cash flows of the Group and changes in equity of the Company for the year ended on that date; and
56
YANLORDLAND 2008 ANNUAL REPORT
Independent Auditors’ Report To the Members of Yanlord Land Group Limited (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.
Deloitte & Touche LLP Public Accountants and Certified Public Accountants
Singapore March 27, 2009
57
YANLORDLAND 2008 ANNUAL REPORT
Balance Sheets December 31, 2008
GROUP Note
2008 $’000
COMPANY 2007 $’000
2008 $’000
2007 $’000
ASSETS Non-current assets Property, plant and equipment
7
39,078
28,669
–
–
Investment properties
8
347,324
219,901
–
–
Properties for development
9
2,150,667
1,443,124
–
–
Investments in subsidiaries
10
–
–
515,319
515,319
Available-for-sale investments
11
10,445
52,384
–
–
Intangible asset
12
128
–
–
–
Deferred tax assets
13
5,637
6,849
–
–
2,553,279
1,750,927
515,319
515,319
477
3,261
–
–
Total non-current assets Current assets Inventories Completed properties for sale
9
506,244
117,484
–
–
Properties under development for sale
9
1,246,708
1,067,147
–
–
1,547
449
–
–
14
41,923
51,496
–
588
Subsidiaries
5
–
–
1,352,640
1,195,969
Minority shareholders of subsidiaries
15
83,808
83,718
–
–
Other related party
6
80
80
–
–
Held-for-trading investments
16
1,101
3,323
–
–
Pledged bank deposits
17
8,272
3,155
–
–
Cash and bank balances
17
375,741
702,857
380
93,459
Total current assets
2,265,901
2,032,970
1,353,020
1,290,016
Total assets
4,819,180
3,783,897
1,868,339
1,805,335
Trade receivables Other receivables and deposits Non-trade amounts due from:
58
YANLORDLAND 2008 ANNUAL REPORT
Balance Sheets December 31, 2008
GROUP
COMPANY
Note
2008 $’000
2007 $’000
2008 $’000
2007 $’000
18
1,226,168
1,219,081
1,226,168
1,219,081
643,157
316,111
35,093
(4,149)
1,869,325
1,535,192
1,261,261
1,214,932
461,051
454,607
–
–
2,330,376
1,989,799
1,261,261
1,214,932
EQUITY AND LIABILITIES Capital and reserves Share capital Reserves Equity attributable to equity holders of the Company Minority interests Total capital and reserves Non-current liabilities Bank loans – due after one year
19
829,366
525,940
–
–
Convertible notes
20
323,562
299,195
323,562
299,195
Deferred tax liabilities
13
46,640
23,926
–
–
15
69,564
–
–
–
1,269,132
849,061
323,562
299,195
Non-trade amount due to: A minority shareholder of a subsidiary Total non-current liabilities Current liabilities Trade payables
21
335,511
311,565
–
–
Other payables
22
223,790
275,395
463
794
A subsidiary
5
–
–
271,538
287,434
Directors
6
7,186
8,611
7,045
2,980
A shareholder
6
4,470
10
4,470
–
Minority shareholders of subsidiaries
15
3,984
36,962
–
–
Other related party
6
1
18
–
–
297,391
165,408
–
–
347,339
147,068
–
–
Total current liabilities
1,219,672
945,037
283,516
291,208
Total equity and liabilities
4,819,180
3,783,897
1,868,339
1,805,335
Non-trade amounts due to:
Income tax payable Bank loans – due within one year
19
See accompanying notes to financial statements.
59
YANLORDLAND 2008 ANNUAL REPORT
Consolidated Profit and Loss Statement Financial year ended December 31, 2008
GROUP Note
2008 $’000
2007 $’000
23
1,007,217
1,227,932
Cost of sales
(447,749)
(674,636)
Gross profit
559,468
553,296
112,414
83,869
Selling expenses
(20,469)
(17,595)
Administrative expenses
(61,131)
(65,352)
(4,660)
(1,276)
(4,739)
(15,351)
580,883
537,591
Revenue
Other operating income
24
Other operating expenses Finance cost
25
Profit before income tax Income tax
26
(266,927)
(200,887)
Profit for the year
27
313,956
336,704
225,841
221,500
88,115
115,204
313,956
336,704
– Basic
12.35
12.52
– Diluted
11.66
12.13
Attributable to: Equity holders of the Company Minority interests
Earnings per share (cents)
See accompanying notes to financial statements.
60
YANLORDLAND 2008 ANNUAL REPORT
28
Statements of Changes in Equity Financial year ended December 31, 2008
Note
Share capital $’000
Currency Merger translation Equity Statutory reserve reserve reserve reserves (deficit) $’000 $’000 $’000 $’000
Attributable to equity Other Accumulated holders of Minority reserve profits the Company interests $’000 $’000 $’000 $’000
Total $’000
GROUP Balance at January 1, 2007
780,175
(55,884)
1,265
Acquisition of additional interest in a subsidiary
–
–
–
–
Currency translation difference
–
39,571 (386,571)
–
531,286
909,842
153,178 1,063,020
–
(48,628)
–
(48,628)
–
(48,628)
–
–
–
–
15,401
9,499
24,900
–
15,401
Net income/expense recognised directly in equity
–
15,401
–
–
–
(48,628)
–
(33,227)
9,499
(23,728)
Net profit for the year
–
–
–
–
–
–
221,500
221,500
115,204
336,704
Total recognised income and expenses for the year
–
15,401
–
–
–
(48,628)
221,500
188,273
124,703
312,976
Issuance of shares pursuant to international offerings exercise, net of expenses (Note A)
299,213
–
–
–
–
–
–
299,213
–
299,213
Conversion of convertible notes
139,693
–
(19,381)
–
–
–
–
120,312
–
120,312
–
–
66,546
–
–
–
–
66,546
–
66,546
–
–
2,290
–
–
–
–
2,290
–
2,290
–
–
–
–
–
–
–
–
37
37
–
–
–
–
–
–
–
–
401
401
–
–
–
–
–
–
–
–
247,954
247,954
–
–
–
–
–
–
(51,284)
(51,284)
–
(51,284)
Dividends paid to minority shareholders
–
–
–
–
–
–
–
–
(71,666)
(71,666)
Appropriations
–
–
–
3,571
–
–
(3,571)
–
–
–
1,219,081
(40,483)
50,720
43,142 (386,571)
(48,628)
697,931
1,535,192
Recognition of equity component of convertible notes, net of expenses (Note A) Recognition of equity-settled sharebased payments
32
Change of interest in a subsidiary Acquisition of subsidiaries
31
Cash injection by a minority shareholder Dividends
Balance at December 31, 2007
29
454,607 1,989,799
61
YANLORDLAND 2008 ANNUAL REPORT
Statements of Changes in Equity Financial year ended December 31, 2008
Note
Balance at January 1, 2008
Currency Merger translation Equity Statutory reserve reserve reserve reserves (deficit) $’000 $’000 $’000 $’000
Share capital $’000
Attributable to equity Other Accumulated holders of Minority reserve profits the Company interests $’000 $’000 $’000 $’000
Total $’000
1,219,081
(40,483)
50,720
43,142
(386,571)
(48,628)
697,931
1,535,192
454,607
1,989,799
Currency translation difference
–
124,158
–
–
–
–
–
124,158
27,011
151,169
Net income recognised directly in equity
–
124,158
–
–
–
–
–
124,158
27,011
151,169
Net profit for the year
–
–
–
–
–
–
225,841
225,841
88,115
313,956
Total recognised income for the year
–
124,158
–
–
–
–
225,841
349,999
115,126
465,125
7,087
–
(2,009)
–
–
–
–
5,078
–
5,078
–
–
1,148
–
–
–
–
1,148
–
1,148
–
–
–
–
–
–
–
–
(15)
(15)
Issuance of shares under Pre-IPO Share Option Scheme Recognition of equitysettled share-based payments
32
Change of interest in a subsidiary Acquisition of a subsidiary
–
–
–
–
–
–
–
–
637
637
Return of minority shareholder’s share of reserves
–
–
–
–
–
–
–
–
(14,298)
(14,298)
Capital injection by minority shareholders
–
–
–
–
–
–
–
–
14,691
14,691
–
–
–
–
–
–
(22,092)
(22,092)
–
(22,092)
Dividends declared to minority shareholders
–
–
–
–
–
–
–
–
(109,697)
(109,697)
Appropriations
–
–
–
26,036
–
–
(26,036)
–
–
–
1,226,168
83,675
49,859
69,178
(386,571)
(48,628)
875,644
1,869,325
461,051
2,330,376
Dividends
Balance at December 31, 2008
31
29
Note A: Included in the total share issue expenses in 2007 was non-audit fees paid to the auditors of the Company amounting to $234,728 in connection with the international offering of shares, convertible notes and initial offering exercise of the Company.
See accompanying notes to financial statements.
62
YANLORDLAND 2008 ANNUAL REPORT
Statements of Changes in Equity Financial year ended December 31, 2008
Share capital $’000
Equity reserve $’000
Accumulated losses $’000
Total $’000
780,175
1,265
(2,807)
778,633
Net loss for the year
–
–
(778)
(778)
Total recognised expense for the year
–
–
(778)
(778)
Issuance of shares pursuant to international offerings exercise, net of expenses (Note A)
299,213
–
–
299,213
Conversion of convertible notes
139,693
(19,381)
–
120,312
–
66,546
–
66,546
Note
COMPANY Balance at January 1, 2007
Recognition of equity component of convertible notes, net of expenses (Note A) Recognition of equity-settled share-based payments
32
–
2,290
–
2,290
Dividends
29
–
–
(51,284)
(51,284)
1,219,081
50,720
(54,869)
1,214,932
Net profit for the year
–
–
62,195
62,195
Total recognised income for the year
–
–
62,195
62,195
7,087
(2,009)
–
5,078
Balance at December 31, 2007
Issuance of shares under Pre-IPO Share Option Scheme Recognition of equity-settled share-based payments
32
–
1,148
–
1,148
Dividends
29
–
–
(22,092)
(22,092)
1,226,168
49,859
(14,766)
1,261,261
Balance at December 31, 2008
Note A: Included in the total share issue expenses in 2007 was non-audit fees paid to the auditors of the Company amounting to $234,728 in connection with the international offering of shares, convertible notes and initial offering exercise of the Company.
See accompanying notes to financial statements.
63
YANLORDLAND 2008 ANNUAL REPORT
Consolidated Cash Flow Statement Financial year ended December 31, 2008
GROUP 2008 $’000
2007 $’000
Operating activities Profit before income tax
580,883
537,591
(15)
37
1,148
2,290
Adjustments for: (Gain) loss on acquisition of additional interest from a minority shareholder Equity-settled share-based payment expense Goodwill written off
632
–
3,900
2,786
(81,220)
(39,634)
2,155
(1,721)
(11)
28
–
(4,123)
Net loss (gain) on disposal of investment properties
109
(361)
Dividend income from held-for-trading investments
(27)
(73)
Dividend income from an available-for-sale investment
(3,115)
(2,257)
Finance cost
4,739
15,351
Interest income
(7,957)
(21,236)
–
482
Depreciation expense Fair value gain on investment properties Fair value loss (gain) on held-for-trading investments Net (gain) loss on disposal of property, plant and equipment Net gain on disposal of held-for-trading investments
Provision for decrease in value of completed properties for sale Allowance (recovery) for doubtful debts and bad debts written off Operating cash flows before movement in working capital Properties for development Inventories Completed properties for sale Properties under development for sale Trade and other receivables and deposits Trade and other payables Cash used in operations Interest paid Income tax paid Net cash used in operating activities
64
YANLORDLAND 2008 ANNUAL REPORT
1
(299)
501,222
488,861
(527,134)
(1,217,554)
2,783
(2,743)
(405,903)
(44,796)
48,878
(693)
8,437
(30,408)
(166,142)
87,181
(537,859)
(720,152)
(90,307)
(29,129)
(130,912)
(92,748)
(759,078)
(842,029)
Consolidated Cash Flow Statement Financial year ended December 31, 2008
GROUP Note
Investing activities Interest received Dividend received from held-for-trading investments Dividend received from an available-for-sale investment Purchase of property, plant and equipment Purchase of an intangible asset Purchase of held-for-trading investments Purchase of an available-for-sale investment Proceeds on disposal of property, plant and equipment Proceeds on disposal of held-for-trading investments Proceeds on disposal of investment properties Repayment from a third party Acquisition of additional interest in a subsidiary Acquisition of subsidiaries Increase in pledged bank deposits Advance to minority shareholders of subsidiaries Net cash used in investing activities
2007 $’000
7,247 27 3,115 (8,930) (128) – – 90 – 1,094 – – (134,742) (5,117) (67,313) (204,657)
21,192 73 2,257 (5,149) – (13,817) (42,510) 43 22,027 3,320 503 (48,628) (9,708) (612) (42,959) (113,968)
(22,092) 3,565 36,302 (1,425) (17) – –
(51,284) (15,767) (80,466) (81) (1,074) 459,855 299,213
5,078 696,725 (213,457) (41,719) (14,298) 14,691 463,353
– 535,976 (300,555) (71,666) – 247,954 1,022,105
17
(500,382) 702,857
66,108 622,237
17
173,266 375,741
14,512 702,857
31
Financing activities Dividend paid Advance from (repayment to) a shareholder Advance from (repayment to) minority shareholders of subsidiaries Repayment to directors Repayment to related parties Net proceeds on issue of convertible notes Net proceeds on issue of new shares Net proceeds on issure of new shares under Pre-IPO Share Option Scheme Proceeds from bank loans Repayment of bank loans Dividends paid to minority shareholders of subsidiaries Return of minority shareholder’s share of reserves Cash injection from minority shareholders of subsidiaries Net cash from financing activities (Decrease) increase in cash and cash equivalents Cash and cash equivalents at beginning of year Effect of exchange rate changes on the balance of cash held in foreign currencies Cash and cash equivalents at end of year
2008 $’000
See accompanying notes to financial statements.
65
YANLORDLAND 2008 ANNUAL REPORT
Notes to Financial Statements December 31, 2008 1
GENERAL The Company (Registration No. 200601911K) is incorporated in the Republic of Singapore with its principal place of business and registered office at 9 Temasek Boulevard, #36-02 Suntec Tower Two, Singapore 038989. The Company is listed on the Singapore Exchange Securities Trading Limited. The financial statements are expressed in Singapore dollars. The principal activity of the Company is to carry on the business of an investment holding company. The principal activities of the subsidiaries are disclosed in Note 10 to the financial statements. The consolidated financial statements of the Group and balance sheet and statement of changes in equity of the Company for the financial year ended December 31, 2008 were authorised for issue by the Board of Directors on March 27, 2009.
2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES BASIS OF ACCOUNTING – The financial statements are prepared in accordance with the historical cost convention, except as disclosed in the accounting policies below, and are drawn up in accordance with the provisions of the Singapore Companies Act and Singapore Financial Reporting Standards (“FRS”). ADOPTION OF NEW AND REVISED STANDARDS – In the current financial year, the Group has adopted all the new and revised FRSs and Interpretations of FRSs (“INT FRSs”) that are relevant to its operations and effective for annual periods beginning on or after January 1, 2008. The adoption of these new/revised FRSs and INT FRSs does not result in changes to the Group’s and the Company’s accounting policies and has no material effect on the amounts reported for the current or prior years. At the date of authorisation of these financial statements, the following FRSs, INT FRSs and amendments to FRSs that are relevant to the Group and the Company were issued but not effective: FRS FRS FRS FRS
1 23 102 108
– – – –
Presentation of Financial Statements (Revised) Borrowing Costs (Revised) Share-based Payment (Amendments relating to vesting conditions and cancellations) Operating Segments
Consequential amendments were also made to various standards as a result of these new/revised standards. The management anticipates that the adoption of the above FRSs, INT FRSs and amendments to FRSs in future periods will have no material impact on the financial statements of the Group and of the Company in the period of their initial adoption except for the following: FRS 1 – Presentation of Financial Statements (Revised) FRS 1 (Revised) will be effective for annual periods beginning on or after January 1, 2009, and will change the basis for presentation and structure of the financial statements. It does not change the recognition, measurement or disclosure of specific transactions and other events required by other FRSs.
66
YANLORDLAND 2008 ANNUAL REPORT
Notes to Financial Statements December 31, 2008 2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont’d) FRS 108 – Operating Segments FRS 108 will be effective for annual financial statements beginning on or after January 1, 2009 and supersedes FRS 14 – Segment Reporting. FRS 108 requires operating segments to be identified on the basis of internal reports about components of the Group that are regularly reviewed by the chief operating decision maker in order to allocate resources to the segment and to assess its performance. In contrast, FRS 14 requires an entity to identify two sets of segments (business and geographical), using a risks and rewards approach, with the entity’s system of internal financial reporting to key management personnel serving only as the starting point for the identification of such segments. Following the adoption of FRS 108, the Group’s current basis of segment reporting is not expected to change significantly as the identification of the reportable segments is based on the internal management reports submitted to management for decision making. BASIS OF CONSOLIDATION – The consolidated financial statements incorporate the financial statements of the Company and entities controlled by the Company (its subsidiaries). Control is achieved where the Company has the power to govern the financial and operating policies of the investee enterprise so as to obtain benefits from its activities. The results of subsidiaries acquired or disposed of during the year are included in the consolidated profit and loss statement from the effective date of acquisition or up to the effective date of disposal, as appropriate. All intra-group transactions, balances, income and expenses are eliminated on consolidation. Minority interests in the net assets of consolidated subsidiaries are identified separately from the Group’s equity therein. Minority interests consist of the amount of those interests at the date of the original business combination (see below) and the minority’s share of changes in equity since the date of the combination. Losses applicable to the minority in excess of the minority’s interest in the subsidiary’s equity are allocated against the interests of the Group except to the extent that the minority has a binding obligation and is able to make an additional investment to cover its share of those losses. In the Company’s financial statements, investments in subsidiaries are carried at cost less any impairment in net recoverable value that has been recognised in profit or loss. BUSINESS COMBINATIONS – The acquisition of subsidiaries from a common shareholder is accounted for using the merger accounting method. Under this method, the Company has been treated as the holding company of the subsidiaries for the financial years presented rather than from the date of acquisition of the subsidiaries. The acquisition of subsidiaries from a party other than a common shareholder is accounted for using the purchase method. The cost of the acquisition is measured at the aggregate of the fair values, at the date of exchange, of assets given, liabilities incurred or assumed, and equity instruments issued by the Group in exchange for control of the acquiree, plus any costs directly attributable to the business combination. The acquiree’s identifiable assets, liabilities and contingent liabilities that meet the conditions for recognition under FRS 103 are recognised at their fair values at the acquisition date.
67
YANLORDLAND 2008 ANNUAL REPORT
Notes to Financial Statements December 31, 2008 2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont’d) Goodwill arising on acquisition is recognised as an asset and initially measured at cost, being the excess of the cost of the business combination over the Group’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities recognised. If, after reassessment, the Group’s interest in the net fair value of the acquiree’s identifiable assets, liabilities and contingent liabilities exceeds the cost of the business combination, the excess is recognised immediately in profit or loss. The interest of minority shareholders in the acquiree is initially measured at the minority’s proportion of the net fair value of the assets, liabilities and contingent liabilities recognised. FINANCIAL INSTRUMENTS – Financial assets and financial liabilities are recognised on the Group’s balance sheet when the Group becomes a party to the contractual provisions of the instrument. Financial assets Investments are recognised and de-recognised on a trade date where the purchase or sale of an investment is under a contract whose terms require delivery of the investment within the timeframe established by the market concerned, and are initially measured at fair value, plus transaction costs except for those financial assets classified as at fair value through profit or loss which are initially measured at fair value. Other financial assets are classified into the following specified categories: “financial assets at fair value through profit or loss”, “available-for-sale financial assets” and “loans and receivables”. The classification depends on the nature and purpose of financial assets and is determined at the time of initial recognition. Effective interest method The effective interest method is a method of calculating the amortised cost of a financial instrument and of allocating interest income or expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts or payments (including all fees on points paid or received that from an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the financial instrument, or where appropriate, a shorter period. Income and expense is recognised on an effective interest rate basis for debt instruments other than those financial instruments “at fair value through profit or loss”. Financial assets at fair value through profit or loss (FVTPL) Financial assets are classified as at FVTPL where the financial asset is either held for trading or it is designated as at FVTPL. A financial asset is classified as held-for-trading if: z
it has been acquired principally for the purpose of selling in the near future; or
z
it is a part of an identified portfolio of financial instruments that the group manages together and has a recent actual pattern of short-term profit-taking; or
z
it is a derivative that is not designated and effective as a hedging instrument.
FVTPL are stated at fair value, with any resultant gain or loss recognised in profit or loss. The net gain or loss recognised in profit or loss incorporates any dividend or interest earned on the financial asset.
68
YANLORDLAND 2008 ANNUAL REPORT
Notes to Financial Statements December 31, 2008 2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont’d) Available-for-sale financial assets Available-for-sale financial assets are those non-derivative financial assets that are not classified into any of the other categories. Investments in equity instruments that do not have a quoted market price in an active market and whose fair value cannot be reliably measured are measured at cost less impairment loss. Loans and receivables Trade receivables, loans and other receivables that have fixed or determinable payments that are not quoted in an active market are classified as “loans and receivables”. Loans and receivables are measured at amortised cost using the effective interest method less impairment. Interest is recognised by applying the effective interest method, except for short-term receivables when the recognition of interest is immaterial. Impairment of financial assets Financial assets, other than those at fair value through profit or loss, are assessed for indicators of impairment at each balance sheet date. Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows of the investment have been impacted. For financial assets carried at amortised cost, the amount of the impairment is the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the original effective interest rate. The carrying amount of the financial asset is reduced by the impairment loss directly for all financial assets with the exception of trade receivables where the carrying amount is reduced through the use of an allowance account. When a trade receivable is uncollectible, it is written off against the allowance account. Subsequent recoveries of amounts previously written off are credited against the allowance account. Changes in the carrying amount of the allowance account are recognised in profit or loss. With the exception of available-for-sale equity instruments, if, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment loss was recognised, the previously recognised impairment loss is reversed through profit or loss to the extent the carrying amount of the investment at the date the impairment is reversed does not exceed what the amortised cost would have been had the impairment not been recognised. In respect of available-for-sale equity instruments, any subsequent increase in fair value after an impairment loss, is recognised directly in equity. Derecognition of financial assets The Group derecognises a financial asset only when the contractual rights to the cash flows from the asset expire, or it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity. If the Group neither transfers nor retains substantially all the risks and rewards of ownership and continues to control the transferred asset, the Group recognises its retained interest in the asset and an associated liability for amounts it may have to pay. If the Group retains substantially all the risks and rewards of ownership of a transferred financial asset, the Group continues to recognise the financial asset and also recognises a collaterialised borrowing for the proceeds received.
69
YANLORDLAND 2008 ANNUAL REPORT
Notes to Financial Statements December 31, 2008 2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont’d) Financial liabilities and equity instruments Classification as debt or equity Financial liabilities and equity instruments issued by the Group are classified according to the substance of the contractual arrangements entered into and the definitions of a financial liability and an equity instrument. Equity instruments An equity instrument is any contract that evidences a residual interest in the assets of the Group after deducting all of its liabilities. Equity instruments are recorded at the proceeds received, net of direct issue costs. Financial liabilities Trade and other payables are initially measured at fair value, net of transaction costs, and are subsequently measured at amortised cost, using the effective interest method, with interest expense recognised on an effective yield basis. Interest-bearing bank loans are initially measured at fair value, and are subsequently measured at amortised cost, using the effective interest method. Any difference between the proceeds (net of transaction costs) and the settlement or redemption of borrowings is recognised over the term of the borrowings in accordance with the Group’s accounting policy for borrowing costs (see below). Financial guarantee contract liabilities are measured initially at their fair values and subsequently at the higher of the amount of obligation under the contract recognised as a provision in accordance with FRS 37 – Provision, Contingent Liabilities and Contingent Assets and the amount initially recognised less cumulative amortisation in accordance with FRS 18 – Revenue. Derecognition of financial liabilities The Group derecognises financial liabilities when, and only when, the Group’s obligations are discharged, cancelled or they expire. Convertible notes Convertible notes are regarded as compound instruments, consisting of a liability component and an equity component. The component parts of compound instruments are classified separately as financial liabilities and equity in accordance with the substance of the contractual arrangement. At the date of issue, the fair value of the liability component is estimated using the prevailing market interest rate for a similar nonconvertible instrument. This amount is recorded as a liability on an amortised cost basis until extinguished upon conversion or at the instrument’s maturity date. The equity component is determined by deducting the amount of the liability component from the fair value of the compound instrument as a whole. This is recognised and included in equity, net of income tax effects, and is not subsequently remeasured. Upon conversion, the liability component is derecognised, the amortised cost of the notes converted and the original equity component recognised are reclassified to share capital. No gain or loss is recognised on conversion. LEASES – Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.
70
YANLORDLAND 2008 ANNUAL REPORT
Notes to Financial Statements December 31, 2008 2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont’d) The Group as lessor Rental income from operating leases is recognised on a straight-line basis lease unless another systematic basis is more representative of the time derived from the leased asset is diminished. Initial direct costs incurred in operating lease are added to the carrying amount of the leased asset and basis over the lease term.
over the term of the relevant pattern in which use benefit negotiating and arranging an recognised on a straight-line
The Group as lessee Rentals payable under operating leases are charged to profit and loss statement on a straight-line basis over the term of the relevant lease unless another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed. Contingent rentals arising under operating leases are recognised as an expense in the period in which they are incurred. PROPERTIES FOR DEVELOPMENT – Properties for development are mainly vacant leasehold land for development and land where management is obtaining permits prior to the commencement of physical construction and are stated at cost less allowance for impairment in value made by the management. These land properties include all land acquired where management has yet to decide whether to develop it for long term retention or for sale. When the intention is clear and action initiated or the physical construction and development are commenced, land to be developed for long term retention is reclassified as investment properties whereas land to be developed for sale and expected to be realised in the normal course of the Group’s property development cycle is reclassified as properties under development for sale under current assets. PROPERTIES UNDER DEVELOPMENT FOR SALE – Properties under development for sale are stated at lower of cost or estimated net realisable value. Net realisable value takes into account the price ultimately expected to be realised and the anticipated costs to completion. Cost of property in the course of development comprises land cost, development costs and borrowing costs capitalised during the development period. When completed, the units held for sale are classified as completed properties for sale. COMPLETED PROPERTIES FOR SALE – Completed properties for sale but remaining unsold at year end are stated at lower of cost or net realisable value. Cost is determined by apportionment of the total land cost, development costs and borrowing costs capitalised attributable to the unsold properties. Net realisable value is determined by reference to sale proceeds of properties sold in the ordinary course of business less all estimated selling expenses after the balance sheet date, or by management estimates based on prevailing market conditions. PROPERTY, PLANT AND EQUIPMENT – Property, plant and equipment are stated at cost less accumulated depreciation and any accumulated impairment losses. Construction-in-progress consists of construction costs and finance costs incurred during the period of construction.
71
YANLORDLAND 2008 ANNUAL REPORT
Notes to Financial Statements December 31, 2008 2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont’d) Depreciation is charged so as to write off the cost of property, plant and equipment, other than construction-in-progress, over their estimated useful lives, using the straight-line method, substantially on the following bases: Leasehold land and buildings Furniture, fixtures and equipment Motor vehicles
– – –
2% to 5% 20% 10% to 25%
The estimated useful lives, residual values and depreciation method are reviewed at each year end, with the effect of any changes in estimate accounted for on a prospective basis. Fully depreciated property, plant and equipment still in use are retained in the financial statements. The gain or loss arising on the disposal or retirement of a property, plant and equipment is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognised in the profit or loss. INVESTMENT PROPERTIES – Investment properties, which are properties held to earn rentals and/or for capital appreciation, are measured initially at its cost, including transaction costs. Subsequent to initial recognition, investment property is measured at fair value. The fair value of an investment property is the price at which the property could be exchanged between knowledgeable, willing parties in an arm’s length transaction. Professional valuations are obtained at least once in three years. Gains or losses arising from changes in the fair value of investment property are included in profit or loss for the period in which they arise. GOODWILL – Goodwill arising on the acquisition of a subsidiary or a jointly-controlled entity from third parties represents the excess of the cost of acquisition over the Group’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities of the subsidiary or jointly controlled entity recognised at the date of acquisition. Goodwill is initially recognised as an asset at cost and is subsequently measured at cost less any accumulated impairment losses. For the purpose of impairment testing, goodwill is allocated to each of the Group’s cash-generating units expected to benefit from the synergies of the combination. Cash-generating units to which goodwill has been allocated are tested for impairment annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit. An impairment loss recognised for goodwill is not reversed in a subsequent period. On disposal of a subsidiary or a jointly-controlled entity, the attributable amount of goodwill is included in the determination of the profit or loss on disposal. INTANGIBLE ASSET – This relates to a club membership held on a long-term basis and is stated at cost less impairment losses. IMPAIRMENT OF TANGIBLE AND INTANGIBLE ASSETS EXCLUDING GOODWILL – At each balance sheet date, the Group reviews the carrying amounts of its tangible and intangible assets other than investment properties carried at fair value, to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs.
72
YANLORDLAND 2008 ANNUAL REPORT
Notes to Financial Statements December 31, 2008 2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont’d) Intangible assets with indefinite useful lives and intangible assets not yet available for use are tested for impairment annually, and whenever there is an indication that the asset may be impaired. Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss. Where an impairment loss subsequently reverses, the carrying amount of the asset (cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss. PROVISIONS – Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that the Group will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation. The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the balance sheet date, taking into account the risks and uncertainties surrounding the obligation. Where a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows. When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, the receivable is recognised as an asset if it is virtually certain that reimbursement will be received and the amount of the receivable can be measured reliably. SHARE-BASED PAYMENTS – The Group issues equity-settled share-based payments to certain employees. Equity-settled share-based payments are measured at fair value of the equity instruments (excluding the effect of non market-based vesting conditions) at the date of grant. Details regarding the determination of the fair value of equity-settled share-based transactions are set out in Note 32. The fair value determined at the grant date of the equity-settled share-based payments is expensed on a straight-line basis over the vesting period, based on the Group’s estimate of the number of equity instruments that will eventually vest and adjusted for the effect of non market-based vesting conditions. At each balance sheet date, the Group revises the estimate of the number of equity instruments expected to vest. The impact of the revision of the original estimates, if any, is recognised over the remaining vesting period with a corresponding adjustment to the equity-settled employee benefits reserve. MERGER RESERVE – Merger reserve represents the difference between the nominal amount of the share capital of the subsidiaries at the date on which it was acquired by the Group and the nominal amount of the share capital issued as consideration for the acquisition under the merger accounting (see above). STATUTORY RESERVE – Statutory reserve represents the amount transferred from profit after taxation of the subsidiaries incorporated in the People’s Republic of China (excluding Hong Kong) (the “PRC”) in accordance with the PRC requirement. The statutory reserve cannot be reduced except where approval is obtained from the relevant PRC authority to apply the amount either in setting off any accumulated losses or increasing capital.
73
YANLORDLAND 2008 ANNUAL REPORT
Notes to Financial Statements December 31, 2008 2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont’d) OTHER RESERVE – Other reserve represents the difference between the purchase consideration and the carrying amount of net assets of the additional interest acquired in the subsidiaries at the date of acquisition. REVENUE RECOGNITION – Revenue is measured at the fair value of the consideration received or receivable. Revenue is reduced for estimated customer returns, rebates and other similar allowances. Sale of properties developed Revenue from properties developed for sale is recognised when the legal title passes to the buyer or when the equitable interest in the property vest in the buyer upon release of the handover notice of the respective property to the buyer, whichever is the earlier. Payments received from buyers prior to this stage are recorded as advances from customers for sales of properties and are classified as current liabilities. Rendering of services Management fee income and service income are recognised in the year when services have been rendered. Interest income Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable. Dividend income Dividend income from investments is recognised when the shareholders’ rights to receive payment have been established. Rental income Rental income from investment properties is recognised on a straight-line basis over the term of the relevant lease. TAX SUBSIDIES – Tax subsidies are credited to the profit and loss statement when received from the relevant authorities. GOVERNMENT SUBSIDIES – Government subsidies are not recognised until there is reasonable assurance that the Company will comply with the conditions attaching to them and the subsidies will be received. Government subsidies are recognised as income over the periods necessary to match them with the related costs. Government subsidies related to expense items are recognised in the same period as those expenses are charged to the profit and loss statement or are reported separately as “other operating income”. BORROWING COSTS – Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of these assets, until such time as the assets are substantially ready for their intended use or sale. Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalisation.
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YANLORDLAND 2008 ANNUAL REPORT
Notes to Financial Statements December 31, 2008 2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont’d) All other borrowing costs are recognised in profit and loss statement in the period in which they are incurred. RETIREMENT BENEFIT COSTS – Payments to defined contribution retirement benefit plans are charged as an expense as they fall due. Payments made to state-managed retirement benefit schemes, such as the Singapore Central Provident Fund, are dealt with as payments to defined contribution plans where the Group’s obligations under the plans are equivalent to those arising in a defined contribution retirement benefit plan. Pursuant to the relevant regulations of the PRC government, the PRC subsidiaries of the Group (“PRC Subsidiaries”) have participated in central pension schemes (“the Schemes”) operated by local municipal governments whereby the PRC Subsidiaries are required to contribute a certain percentage of the basic salaries of their employees to the Schemes to fund their retirement benefits. The local municipal governments undertake to assume the retirement benefit obligations of all existing and future retired employees of the PRC Subsidiaries. The only obligation of the PRC Subsidiaries with respect to the Schemes is to pay the ongoing required contributions under the Schemes mentioned above. Contributions under the Schemes are charged to the profit and loss statement as incurred. EMPLOYEE LEAVE ENTITLEMENT – Employee entitlements to annual leave are recognised when they accrue to employees. A provision is made for the estimated liability for annual leave as a result of services rendered by employees up to the balance sheet date. INCOME TAX – Income tax expense represents the sum of the tax currently payable and deferred tax. The tax currently payable is based on taxable profit for the year. Taxable profit differs from profit as reported in the profit and loss statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are not taxable or tax deductible. The Group’s liability for current tax is calculated using tax rates (and tax laws) that have been enacted or substantively enacted in countries where the Company and subsidiaries operate by the balance sheet date. Deferred tax is recognised on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit. Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries, except where the Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.
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YANLORDLAND 2008 ANNUAL REPORT
Notes to Financial Statements December 31, 2008 2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont’d) Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset realised based on the tax rates (and tax laws) that have been enacted or substantively enacted by the balance sheet date. Deferred tax is charged or credited to profit or loss, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Group intends to settle its current tax assets and liabilities on a net basis. Current and deferred tax are recognised as an expense or income in profit or loss, except when they relate to items credited or debited directly to equity, in which case the tax is also recognised directly in equity, or where they arise from the initial accounting for a business combination. In the case of a business combination, the tax effect is taken into account in calculating goodwill or determining the excess of the acquirer’s interest in the net fair value of the acquiree’s identifiable assets, liabilities and contingent liabilities over cost. FOREIGN CURRENCY TRANSACTIONS AND TRANSLATION – The individual financial statements of each Group entity are measured and presented in the currency of the primary economic environment in which the entity operates (its functional currency). The consolidated financial statements of the Group and the balance sheet of the Company are presented in Singapore dollars, which is the functional currency of the Company and the presentation currency for the consolidated financial statements. In preparing the financial statements of the individual entities, transactions in currencies other than the entity’s functional currency are recorded at the rates of exchange prevailing on the date of the transaction. At each balance sheet date, monetary items denominated in foreign currencies are retranslated at the rates prevailing on the balance sheet date. Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rates prevailing on the date when the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated. Exchange differences arising on the settlement of monetary items, and on retranslation of monetary items are included in profit or loss for the period. Exchange differences arising on the retranslation of non-monetary items carried at fair value are included in profit or loss for the period except for differences arising on the retranslation of non-monetary items in respect of which gains and losses are recognised directly in equity. For such non-monetary items, any exchange component of that gain or loss is also recognised directly in equity. For the purpose of presenting consolidated financial statements, the assets and liabilities of the Group’s foreign operations (including comparatives) are expressed in Singapore dollars using exchange rates prevailing on the balance sheet date. Income and expense items (including comparatives) are translated at the average exchange rates for the period, unless exchange rates fluctuated significantly during that period, in which case the exchange rates at the dates of the transactions are used. Exchange differences arising, if any, are classified as equity and transferred to the Group’s translation reserve. Such translation differences are recognised in profit or loss in the period in which the foreign operation is disposed of. On consolidation, exchange differences arising from the translation of the net investment in foreign entities (including monetary items that, in substance, form part of the net investment in foreign entities) are taken to the translation reserve.
76
YANLORDLAND 2008 ANNUAL REPORT
Notes to Financial Statements December 31, 2008 2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont’d) Goodwill and fair value adjustments arising on the acquisition of a foreign operation are treated as assets and liabilities of the foreign operation and translated at the closing rate. CASH AND CASH EQUIVALENTS – Cash and cash equivalents comprise cash on hand and demand deposits and are subject to an insignificant risk of changes in value.
3
CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY In the application of the Group’s accounting policies, which are described in Note 2 above, management is required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods. Critical judgements in applying the Group’s accounting policies The following are the critical judgements, apart from those involving estimations (see below), that management has made in the process of applying the Group’s accounting policies and that have the most significant effect on the amounts recognised in the financial statements. Taxation The Group accounts for income taxes under the provisions of FRS 12 – Income Taxes. The Group has recorded deferred tax assets on tax loss of $22.7 million (2007 : $27.0 million) because the management believes it is more likely than not that such tax loss can be utilised (Note 13). In the event the management determines that the Group would not be able to realise such deferred tax assets in the future in excess of their recorded amount, an adjustment to the Group’s deferred tax assets would decrease the Group’s income in the period such determination is made. Likewise, if the management determines that the Group is able to realise all or part of the Group’s unrecognised deferred tax on tax loss of $21.8 million (2007 : $16.4 million), which is currently not expected to be utilised in the future, an adjustment to the Group’s deferred tax assets would increase the Group’s income in the period such determination is made. The Group records deferred tax using the balance sheet liability method at the rates that have been enacted by the balance sheet date. Land Appreciation Tax (“LAT”) All income from sale of properties in the PRC is subject to LAT at progressive rates under the PRC tax laws and regulations. The management estimates and provides for LAT in accordance with the PRC tax laws and regulations. However, prior to October 1, 2006, the Group has not been levied any LAT for the sale of properties located in Shanghai Pudong New District and this applies also to all property development companies in Shanghai Pudong New District. The management, after taking into consideration its due diligence, as described in Note 26, consider the provision of LAT to be adequate.
77
YANLORDLAND 2008 ANNUAL REPORT
Notes to Financial Statements December 31, 2008 3
CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY (Cont’d) Key sources of estimation uncertainty The key assumptions concerning the future, and other key sources of estimation uncertainty at the balance sheet date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are discussed below. Carrying amounts of properties for development, properties under development for sale and completed properties for sale The aggregate carrying amount of these properties totaled $3,903.6 million as at December 31, 2008 (2007 : $2,627.8 million), details of which are disclosed in Note 9. They are stated at cost less allowance for impairment in value or at the lower of cost and estimated net realisable values, assessed on an individual project basis. When it is probable that the total project costs will exceed the total projected revenue net of selling expenses i.e., net realisable value, the amount in excess of net realisable value is recognised as an expense immediately. The process of evaluating the net realisable value for each property is subject to management judgement and the effect of assumptions in respect of development plans, timing of sale and the prevailing market conditions. Management performs cost studies for each project, taking into account the costs incurred to date, the development status and costs to complete each development project. Any future variation in plans, assumptions and estimates can potentially impact the carrying amounts of the respective properties. Valuation of investment properties As disclosed in Note 8 to the financial statements, investment properties are stated at fair value based on the valuation performed by an independent professional valuer. In determining the fair values, the valuer has made reference to both the comparable sales transactions as available in the relevant market of these properties and the capitalisation of the existing and reversionary rental income potential. The valuer, has in its valuation report, drawn attention to the fact that the current volatility in the global financial system has created a significant degree of turbulence in commercial real estate markets across the world. Furthermore, the lack of liquidity in the capital markets means that it may be very difficult to achieve a successful sale of property assets in the short-term. In relying on the independent professional valuation report, management considered the method of valuation and the Group’s marketing strategy and is of the view that the estimated values are reasonable. Depreciation of property, plant and equipment The management exercises their judgement in estimating the useful lives of the depreciable assets. Depreciation is provided to write off the cost of property, plant and equipment (Note 7) over their estimated useful lives, using the straight line method. Share-based payment FRS 102 Shared-based Payment requires the recognition of equity-settled share-based payments at fair value at the date of grant. As disclosed in Note 32 to the financial statements, the management used the Black-Scholes pricing model to measure fair value at the date of grant. The fair value determined at the grant date of equity-settled share-based payments is expensed on a straight-line basis over the vesting period, based on the Group’s estimate of shares that will eventually vest and adjusted for the effect of non market-based vesting conditions.
78
YANLORDLAND 2008 ANNUAL REPORT
Notes to Financial Statements December 31, 2008 4
FINANCIAL RISKS AND MANAGEMENT (a)
Categories of financial instruments The following table sets out the financial instruments as at the balance sheet date: GROUP 2008 $’000 Financial assets Fair value through profit or loss: Held-for-trading investments Loans and receivables (including cash and cash equivalents) Available-for-sale investments Financial liabilities Amortised cost
(b)
COMPANY 2007 $’000
2008 $’000
2007 $’000
1,101
3,323
–
–
498,017 10,445
828,493 52,384
1,353,020 –
1,289,428 –
2,008,973
1,358,125
606,615
589,941
Financial risk management policies and objectives The management of the Group monitors and manages the financial risks relating to the operations of the Group to ensure appropriate measures are implemented in a timely and effective manner. These risks include market risk (including foreign exchange risk, interest rate risk, equity price risk), credit risk and liquidity risk. The Group does not hold or issue derivative financial instruments for speculative purposes. There has been no change to the Group’s exposure to these financial risks or the manner in which it manages and measures the risks. Market risk exposures are measured using sensitivity analysis indicated below. (i)
Foreign exchange risk management The Group transacts business in various foreign currencies, including the United States (“US”) dollar, Hong Kong (“HK”) dollar and Renminbi (“RMB”) and therefore is exposed to foreign exchange risk. The Group does not enter into derivative foreign exchange contracts and foreign currency borrowings to hedge its foreign exchange risk. At the reporting date, the carrying amounts of monetary assets and monetary liabilities denominated in currencies other than the respective entities’ functional currencies are as follows: GROUP Liabilities 2008 2007 $’000 $’000 US dollars HK dollars RMB
– – 291,190 293,233 – –
COMPANY
Assets 2008 2007 $’000 $’000 18,760 3,126 15,443
Liabilities 2008 2007 $’000 $’000
109,647 – 3,323 287,836 – –
Assets 2008 2007 $’000 $’000
– 995,087 973,368 293,210 109,996 65,702 – – –
79
YANLORDLAND 2008 ANNUAL REPORT
Notes to Financial Statements December 31, 2008 4
FINANCIAL RISKS AND MANAGEMENT (Cont’d) (b)
Financial risk management policies and objectives (Cont’d) (i)
Foreign exchange risk management (Cont’d) The Company has a number of investments in foreign subsidiaries, whose net assets are exposed to currency translation risk. The Group has not designated its foreign currency denominated debt obligations as hedging instruments for managing of foreign currency translation risk relating to the net assets of its foreign operations. Foreign currency sensitivity The following table details the sensitivity to a 6% increase in the exchange rate for the relevant foreign currencies against the functional currency of each entity of the Group. 6% is the sensitivity rate used when reporting foreign currency risk internally to key management personnel and represents management’s assessment of the possible change in foreign exchange rates. The sensitivity analysis includes only outstanding foreign currency denominated monetary items and adjusts their translation at the year end for a 6% change in foreign currency rates. A positive number below indicates an increase in profit before income tax when the functional currency of each Group entity strengthens 6% against the relevant foreign currencies. For a 6% weakening of the functional currency of each Group entity against the relevant foreign currencies, there would be equal and opposite impact on the profit before income tax. US dollar impact
HK dollar impact
RMB impact
2008 $’000
2007 $’000
2008 $’000
2007 $’000
2008 $’000
(1,062)
(6,262)
16,317
16,409
(874)
–
(56,337)
(55,109)
10,068
12,878
–
–
2007 $’000
GROUP (Decrease) increase in profit before income tax COMPANY (Decrease) increase in profit before income tax
The Group’s sensitivity to US dollar exchange rate has decreased during the current year due to the reduction of US dollar balances in cash and bank balances at current year end as compared with the preceding year end. The Group’s sensitivity to HK dollar exchange rate during the current year approximates that of the preceding year as there is no significant change in the HK dollar denominated net monetary liabilities. The Group’s sensitivity to RMB exchange rate during current year is attributable to the RMB denominated amounts due from minority shareholders. The Company’s sensitivity to US dollar exchange rate has increased during the current year mainly due to the increase in US dollar denominated non-trade amount due from a subsidiary at current year end as compared with the preceding year end. The Company’s sensitivity to HK dollar exchange rate has decreased during the current year mainly due to the decrease in HK dollar denominated net liabilities at current year end as compared with the preceding year end. In management’s opinion, the sensitivity analysis is unrepresentative of the inherent foreign exchange risk as the year end exposure does not reflect the exposure during the year.
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YANLORDLAND 2008 ANNUAL REPORT
Notes to Financial Statements December 31, 2008 4
FINANCIAL RISKS AND MANAGEMENT (Cont’d) (b)
Financial risk management policies and objectives (Cont’d) (ii)
Interest rate risk management Summary quantitative data of the Group’s interest-bearing financial instruments can be found in Section (v) of this Note. The Group’s policy is to maintain cash and cash equivalents and borrowings in fixed rate instruments. However, it sometimes borrows at variable rates as well. Interest rate sensitivity The sensitivity analysis below has been determined based on the exposure to interest rates for non-derivatives instruments at the balance sheet date and the stipulated change taking place at the beginning of the financial year and held constant throughout the reporting year in the case of instruments that have floating rates. A 100 basis point increase or decrease is used when reporting interest rate risk internally to key management personnel and represents management’s assessment of the possible change in interest rates. If interest rates had been 100 basis points higher or lower and all other variables were held constant, the Group’s: z
profit before income tax for the year ended December 31, 2008 would decrease/ increase respectively by $11.8 million (2007 : decrease/increase respectively by $6.8 million). This is mainly attributable to the Group’s exposure to its variable rate of borrowings. It is the Group’s accounting policy to capitalise borrowing costs relevant to property development. Hence, the above mentioned interest rate fluctuation may not fully impact the profit in the year where interest is accrued but may affect profit in future financial years.
The Group’s sensitivity to interest rates has increased during the current year mainly due to the increase in variable rate debt instruments. In 2008, the management is of the view that the interest rate risk is not significant for the Company. Hence, no sensitivity analysis is presented for the Company. The Company’s profit and loss for the year ended December 31, 2007 was not affected by the changes in interest rates as the interest-bearing instruments carry fixed interest rate. (iii)
Equity price risk management The Group is exposed to equity price risk arising from equity investments classified as held-for-trading. Available-for-sale investments are held for strategic rather than trading purposes. The Group does not actively trade available-for-sale investments. Further details of these equity investments can be found in Notes 11 and 16 to the financial statements. The management is of the view that the equity price risk is not significant for the Group. Hence no sensitivity analysis is presented.
81
YANLORDLAND 2008 ANNUAL REPORT
Notes to Financial Statements December 31, 2008 4
FINANCIAL RISKS AND MANAGEMENT (Cont’d) (b)
Financial risk management policies and objectives (Cont’d) (iv)
Credit risk management Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Group. The Group has adopted a policy of only dealing with creditworthy counterparties and obtaining sufficient collateral where appropriate, as a means of mitigating the risk of financial loss from defaults. For sales of properties, sales proceeds are fully settled upon delivery of properties. The Group does not have any significant credit risk exposure to any single counterparty or any group of counterparties having similar characteristics except for non-trade amounts due from minority shareholders. The credit risk on financial assets is limited because the counterparties are mainly PRC government agents (Note 14) which management considers to be creditworthy and certain minority shareholders where securities are provided by undistributed retained earnings of a subsidiary yet to be declared as dividends and future dividend distributions by a subsidiary to the minority shareholders (Note 15). The sum of the carrying amount of financial assets recorded in the financial statements, grossed up for any allowances for losses represents the Group’s maximum exposure to credit risk. In addition to the credit risk in respect of the financial assets, the Group has provided guarantees of approximately $228.8 million (2007 : $224.3 million) to banks for the benefit of the Group’s customers in respect of mortgage loans provided by the banks to these customers for the purchase of the Group’s development properties, as elaborated in Note 35 to the financial statements.
(v)
Liquidity risk management The Group maintains cash and cash equivalents and external bank loans with staggered repayment dates, some of which are in excess of two years. The Group also minimises liquidity risk by keeping committed credit lines available. At December 31, 2008, the Group had available $169.3 million (2007 : $374.2 million) of undrawn committed bank credit facilities in respect of which all precedent conditions had been met. In managing liquidity risk, the management prepares cash flow forecasts using various assumptions and monitors the cash flows of the Group. Liquidity and interest risk analyses Non-derivative financial liabilities The following tables detail the remaining contractual maturity for non-derivative financial liabilities. The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Group and Company can be required to pay. The table includes both interest and principal cash flows. The adjustment column represents the estimated future interest attributable to the instrument included in the maturity analysis which is not included in the carrying amount of the financial liabilities on the balance sheet.
82
YANLORDLAND 2008 ANNUAL REPORT
Notes to Financial Statements December 31, 2008 4
FINANCIAL RISKS AND MANAGEMENT (Cont’d) (b)
Financial risk management policies and objectives (Cont’d) (v)
Liquidity risk management (Cont’d) Non-derivative financial liabilities (Cont’d) Weighted average On effective demand More than More than interest or within 1 year to 2 years to rate 1 year 2 years 5 years Adjustments % $’000 $’000 $’000 $’000
Total $’000
GROUP 2008 Non-interest bearing Variable interest rate instruments
6.7
Fixed interest rate instruments
8.1
436,454
–
–
–
436,454
373,474
750,889
207,906
(152,876)
1,179,393
–
32,741
390,064
(29,679)
393,126
809,928
783,630
597,970
(182,555)
2,008,973
359,320
–
–
–
359,320
2007 Non-interest bearing Variable interest rate instruments
6.5
156,627
165,933
458,222
(107,774)
673,008
Fixed interest rate instruments
7.9
28,438
–
338,250
(40,891)
325,797
544,385
165,933
796,472
(148,665)
1,358,125
280,365
–
–
–
280,365
COMPANY 2008 Non-interest bearing Variable interest rate instruments
6.5
2,863
–
–
(175)
2,688
Fixed interest rate instruments
8.0
–
–
338,250
(14,688)
323,562
283,228
–
338,250
(14,863)
606,615
83
YANLORDLAND 2008 ANNUAL REPORT
Notes to Financial Statements December 31, 2008 4
FINANCIAL RISKS AND MANAGEMENT (Cont’d) (b)
Financial risk management policies and objectives (Cont’d) (v)
Liquidity risk management (Cont’d) Non-derivative financial liabilities (Cont’d) Weighted average On effective demand More than More than interest or within 1 year to 2 years to rate 1 year 2 years 5 years Adjustments % $’000 $’000 $’000 $’000
Total $’000
COMPANY 2007 Non-interest bearing Fixed interest rate instruments
8.0
290,746
–
–
–
290,746
–
–
338,250
(39,055)
299,195
290,746
–
338,250
(39,055)
589,941
Non-derivative financial assets The following tables detail the expected maturity for non-derivative financial assets. The tables below have been drawn up based on the undiscounted contractual maturities of the financial assets including interest that will be earned on those assets except where the Group and the Company anticipate that the cash flows will occur in a different period. Weighted average On effective demand More than interest or within 1 year to More than rate 1 year 5 years 5 years Adjustments % $’000 $’000 $’000 $’000
Total $’000
GROUP 2008 Non-interest bearing
84
403,962
–
10,445
–
414,407
Variable interest rate instruments
7.5
15,927
–
–
(1,111)
14,816
Fixed interest rate instruments
3.5
83,169
–
–
(2,829)
80,340
503,058
–
10,445
(3,940)
509,563
YANLORDLAND 2008 ANNUAL REPORT
Notes to Financial Statements December 31, 2008 4
FINANCIAL RISKS AND MANAGEMENT (Cont’d) (b)
Financial risk management policies and objectives (Cont’d) (v)
Liquidity risk management (Cont’d) Non-derivative financial assets (Cont’d) Weighted average On effective demand More than interest or within 1 year to More than rate 1 year 5 years 5 years Adjustments % $’000 $’000 $’000 $’000
Total $’000
GROUP 2007 Non-interest bearing Fixed interest rate instruments
3.5
545,359
–
52,384
–
597,743
296,525
–
–
(10,068)
286,457
841,884
–
52,384
(10,068)
884,200
In 2008 and 2007, the Company’s non-derivative financial assets are non-interest bearing with expected maturity within a year, except for the fixed deposits in 2007 which carried an interest rate of 2.6% per annum. (vi)
Fair value of financial assets and financial liabilities The carrying amounts of cash and cash equivalents, trade and other current receivables and payables approximate their respective fair values due to the relatively short-term maturity of these financial instruments. The management considers that carrying values approximate the fair values of other classes of financial assets and liabilities except for the convertible notes stated at amortised cost where fair value is disclosed in Note 20. The fair value of financial assets and financial liabilities with standard terms and conditions and traded on active liquid markets are determined with reference to quoted market prices.
85
YANLORDLAND 2008 ANNUAL REPORT
Notes to Financial Statements December 31, 2008 4
FINANCIAL RISKS AND MANAGEMENT (Cont’d) (c)
Capital risk management policies and objectives The Group manages its capital to ensure that entities in the Group will be able to continue as a going concern while maximising the return to shareholders through the optimisation of the debt and equity balance. The Group monitors capital on the basis of the net debt to equity ratio. This ratio is calculated as total debt less cash and bank balances divided by equity. Total debt include bank loans, convertible notes, non-trade amount due to a minority shareholder of a subsidiary and a shareholder of the Company. Equity is “Equity attributable to equity holders of the Company” as shown in the consolidated balance sheet. The net debt to equity ratio as at December 31, 2008 and 2007 were as follows: GROUP 2008 $’000 Total debt
2007 $’000
1,572,519
998,805
(375,741)
(702,857)
Net debt
1,196,778
295,948
Equity
1,869,325
1,535,192
64.0%
19.3%
Cash and bank balances
Net debt to equity ratio The Group’s overall strategy remains unchanged from 2007.
5
HOLDING COMPANY AND RELATED COMPANY TRANSACTIONS The Company is a subsidiary of Yanlord Holdings Pte. Ltd., incorporated in the Republic of Singapore, which is also the Company’s ultimate holding company. Related companies in these financial statements refer to members of the Company’s group of companies. Transactions between the Company and its subsidiaries, which are related companies of the Company, have been eliminated on consolidation and are not disclosed in this note. The intercompany balances are unsecured, interest-free and repayable on demand unless otherwise stated. The Company’s non-trade amounts due from subsidiaries are substantially denominated in US dollars. The Company’s non-trade amount due to a subsidiary is substantially denominated in HK dollars.
86
YANLORDLAND 2008 ANNUAL REPORT
Notes to Financial Statements December 31, 2008 6
OTHER RELATED PARTY TRANSACTIONS Related parties are entities with common direct or indirect shareholders and/or directors. Parties are considered to be related if one party has the ability to control the other party or exercise significant influence over the other party in making financial and operating decisions. Some of the Group’s transactions and arrangements are with related parties and the effect of these on the basis determined between the parties is reflected in these financial statements. The balances with related parties are unsecured, interest-free and repayable on demand unless otherwise stated. The nontrade amount due to a shareholder of $2.7 million bore floating interest of 6.5% (2% plus cost of fund of bank) per annum. The Group’s and Company’s balances with related parties are substantially denominated in the functional currencies of the respective entities. During the year, the Group entered into the following transactions with related parties: GROUP 2008 $’000
2007 $’000
(2,341)
(1,969)
–
(20)
Sales of properties to a minority shareholder of a subsidiary
(3,632)
–
Sales of properties to related parties
(5,115)
(214)
895
–
3,705
1,912
Rental expense to a related party
938
1,005
Consultancy fee to a minority shareholder of a subsidiary
857
659
12
–
Interest income from minority shareholders of subsidiaries Other income from a related party
Interest expense to a shareholder Interest expense to minority shareholders of subsidiaries
Other expense to a related party Compensation of directors and key management personnel
The remuneration of directors and other members of key management during the year was as follows: GROUP
Short-term benefits Post-employment benefits Equity-settled share-based payments
2008 $’000
2007 $’000
8,989
9,726
52
68
409
780
9,450
10,574
87
YANLORDLAND 2008 ANNUAL REPORT
Notes to Financial Statements December 31, 2008 7
PROPERTY, PLANT AND EQUIPMENT Leasehold land and Motor buildings vehicles $’000 $’000
Furniture, fixtures and Construction equipment in progress $’000 $’000
Total $’000
GROUP Cost: At January 1, 2007 Arising from acquisition of subsidiaries Additions Reclassification Transfer from construction in progress Disposals Currency realignment At December 31, 2007 Additions Transfer from properties under development for sale Disposals Currency realignment At December 31, 2008
19,894
7,028
6,513
1,291
34,726
–
94
8
–
102
44
2,057
3,048
–
5,149
6
152
(158)
–
–
316
–
–
(316)
–
–
(198)
(45)
–
(243)
(116)
134
55
25
98
20,144
9,267
9,421
1,000
39,832
802
2,277
5,851
–
8,930
4,792
–
–
–
4,792
(6)
(298)
(101)
–
(405)
700
509
482
58
1,749
26,432
11,755
15,653
1,058
54,898
1,267
2,873
3,978
–
8,118
Accumulated depreciation: At January 1, 2007 Arising from acquisition of subsidiaries
–
58
6
–
64
Depreciation for the year
819
1,271
985
–
3,075
Reclassification
(15)
2
13
–
–
–
(135)
(37)
–
(172)
(12)
55
35
–
78
2,059
4,124
4,980
–
11,163
794
2,098
1,409
–
4,301
–
53
(53)
–
–
(5)
(238)
(83)
–
(326)
105
293
284
–
682
2,953
6,330
6,537
–
15,820
At end of year
23,479
5,425
9,116
1,058
39,078
At beginning of year
18,085
5,143
4,441
1,000
28,669
Eliminated on disposals Currency realignment At December 31, 2007 Depreciation for the year Reclassification Eliminated on disposals Currency realignment At December 31, 2008 Carrying amount:
88
YANLORDLAND 2008 ANNUAL REPORT
Notes to Financial Statements December 31, 2008 8
INVESTMENT PROPERTIES GROUP 2008 $’000
2007 $’000
219,901
105,702
Transfer from properties under development for sale
14,752
75,398
Transfer from completed properties for sale
17,142
–
Change in fair value (Note 24)
81,220
39,634
Currency realignment
15,512
2,126
Disposals
(1,203)
(2,959)
347,324
219,901
At fair value: Balance as at beginning of year
Balance as at end of year
The investment properties are stated at valuation based on the professional valuation carried out by an independent valuer, CB Richard Ellis Limited Hong Kong, for all investment properties as at December 31, 2008 and 2007 by making reference to both the comparable sales transactions as available in the relevant market of these properties and the capitalisation of the existing and reversionary rental income potential. As at December 31, 2008, the investment properties amounting to $30.5 million (2007 : $108.6 million) were pledged to banks to secure the bank loans granted to the Group. (Note 19) The rental income earned by the Group from its investment properties under operating leases amounted to $3.1 million (2007 : $0.7 million). Direct operating expenses arising on the investment properties in the year amounted to $0.2 million (2007 : $0.03 million).
9
PROPERTIES FOR DEVELOPMENT/PROPERTIES UNDER DEVELOPMENT FOR SALE/COMPLETED PROPERTIES FOR SALE GROUP 2008 $’000
2007 $’000
Properties for development (Non-current assets)
2,150,667
1,443,124
Properties under development for sale (Current assets)
1,246,708
1,067,147
506,244
117,484
3,903,619
2,627,755
At cost:
Completed properties for sale (Current assets)
a)
Properties for development, properties under development for sale and completed properties for sale are located in the PRC.
89
YANLORDLAND 2008 ANNUAL REPORT
Notes to Financial Statements December 31, 2008 9
PROPERTIES FOR DEVELOPMENT/PROPERTIES UNDER DEVELOPMENT FOR SALE/COMPLETED PROPERTIES FOR SALE (Cont’d) b)
Up to December 31, 2008, total interest capitalised are as follows: GROUP 2008 $’000
2007 $’000
Properties for development
50,268
16,478
Properties under development for sale
49,079
16,587
Completed properties for sale
22,134
4,049
The capitalisation rate is disclosed in Notes 19 and 20.
10
INVESTMENTS IN SUBSIDIARIES COMPANY
Unquoted equity shares, at cost
2008 $’000
2007 $’000
515,319
515,319
Details of the Company’s subsidiaries at December 31, 2008 are as follows: Country of incorporation (or registration) and operation
Name of subsidiary
Proportion of ownership interest and voting power held
Principal activity
2008 %
2007 %
Singapore
100
100
Investment holding
Singapore
100
100
Investment holding
Hong Kong
100
100
Investment holding
Held by the Company Yanlord Commercial Property Investments Pte. Ltd. (a) 仁恒商业地产投资有限公司 Yanlord Land Pte. Ltd. 仁恒置地有限公司
(a)
Yanlord Land (HK) Co., Ltd. 仁恒地产(香港)有限公司
90
(b)
YANLORDLAND 2008 ANNUAL REPORT
Notes to Financial Statements December 31, 2008 10
INVESTMENTS IN SUBSIDIARIES (Cont’d) Country of incorporation (or registration) and operation
Name of subsidiary
Proportion of ownership interest and voting power held
Principal activity
2008 %
2007 %
Singapore
67
67
Investment holding
Singapore
60
60
Investment holding
Singapore
95
95
Investment holding
Hong Kong
100
100
Investment holding
Hong Kong
100
100
Management service
Chengdu Everrising Asset Management Co., Ltd. (b) 成都市恒业东升资产经营管理 有限公司
PRC
51
51
Property development and investment
Chengdu Yanlord Investment Management Co., Ltd. (1) (b) 成都仁恒投资管理有限公司
PRC
100
–
Management service and investment
Chengdu Yanlord Property Management Co., Ltd. (b) 成都仁恒物业管理有限公司
PRC
100
100
Property management
Yanlord Land (Chengdu) Co., Ltd. (b) 仁恒置地(成都)有限公司
PRC
100
100
Property development
Guiyang Yanlord Property Co., Ltd. (b) 貴阳仁恒房地产开发有限公司
PRC
67
67
Property development
Guiyang Yanlord Property Management Co., Ltd. (b) 貴阳仁恒物业管理有限公司
PRC
67
54
Property management
Held by Yanlord Land Pte. Ltd. and its subsidiaries Palovale Pte Ltd 柏龙威有限公司
(a)
Yanlord Property Pte. Ltd. 仁恒地产有限公司
(a)
Yanlord Real Estate Pte. Ltd. 仁恒置业发展有限公司 East Hero Investment Ltd. 东亨投资有限公司
(a)
(b)
Singapore Yanlord Land (HK) Ltd. (b) 新加坡仁恒地产(香港)有限公司
91
YANLORDLAND 2008 ANNUAL REPORT
Notes to Financial Statements December 31, 2008 10
INVESTMENTS IN SUBSIDIARIES (Cont’d)
Name of subsidiary
Country of incorporation (or registration) and operation
Proportion of ownership interest and voting power held 2008 %
2007 %
Principal activity
Held by Yanlord Land Pte. Ltd. and its subsidiaries (Cont’d) Nanjing Yanlord Development Co., Ltd. (b) 南京仁恒置地房产开发有限公司
PRC
100
100
Property development
Nanjing Yanlord Property Management Co., Ltd. (b) 南京仁恒物业管理有限公司
PRC
100
100
Property management
Nanjing Yanlord Real Estate Co., Ltd. (b) 南京仁恒置业有限公司
PRC
60
60
Property development
Yanlord Investment (Nanjing) Co., Ltd. (b) 仁恒投资(南京)有限公司
PRC
100
100
Property development and investment
Shenzhen Long Wei Xin Investment Co., Ltd. (b) 深圳市龙威信投资实业有限公司
PRC
75
75
Property development
Yanlord Land (Shenzhen) Co., Ltd. (b) 仁恒置地(深圳)有限公司
PRC
100
100
Management service
Shanghai Hong Ming Ge Food & Beverage Service Management Co., Ltd. (b) 上海宏名阁餐饮服务管理有限公司
PRC
60
60
Restaurant operation
Shanghai Pudong New District Private Yanlord Kindergarten (2) (b) 上海市浦东新区民办仁恒幼儿园
PRC
50
50
Kindergarten operation
Shanghai Renjie Hebin Garden Property Co., Ltd. (3) (b) 上海仁杰河滨园房地产有限公司
PRC
34
34
Property development
Shanghai Yanlord Gaoqiao Property Co., Ltd. (2) (b) 上海仁恒高乔房地产有限公司
PRC
50
50
Property development
92
YANLORDLAND 2008 ANNUAL REPORT
Notes to Financial Statements December 31, 2008 10
INVESTMENTS IN SUBSIDIARIES (Cont’d)
Name of subsidiary
Country of incorporation (or registration) and operation
Proportion of ownership interest and voting power held 2008 %
2007 %
Principal activity
Held by Yanlord Land Pte. Ltd. and its subsidiaries (Cont’d) Shanghai Yanlord Investment Management Co., Ltd. (1) (b) 上海仁恒投资管理有限公司
PRC
67
–
Management service and investment
Shanghai Yanlord Property Co., Ltd. (4) (b) 上海仁恒房地产有限公司
PRC
67
67
Property development
Shanghai Yanlord Property Management Co., Ltd. (b) 上海仁恒物业管理有限公司
PRC
67
67
Property management
Shanghai Yanlord Real Estate Co., Ltd. (b) 上海仁恒置业发展有限公司
PRC
56
56
Property development
Shanghai Yanlord Yangpu Property Co., Ltd. (1) (b) 上海仁恒杨浦房地产有限公司
PRC
67
–
Property development
Yanlord Land Investment Management (Shanghai) Co., Ltd. (b) 仁恒置地投资管理(上海)有限公司
PRC
100
100
Management service
Suzhou Yinghan Property Development Co., Ltd. (b) 苏州鷹汉房地产开发有限公司
PRC
100
100
Property development
Suzhou Zhonghui Property Development Co., Ltd. (b) 苏州中辉房地产开发有限公司
PRC
100
100
Property development
Yanlord Property (Suzhou) Co., Ltd. (b) 仁恒地产(苏州)有限公司
PRC
100
100
Property development
Tianjin Yanlord Haihe Development Co., Ltd. (b) 天津仁恒海河开发有限公司
PRC
80
–(5)
Property development
93
YANLORDLAND 2008 ANNUAL REPORT
Notes to Financial Statements December 31, 2008 10
INVESTMENTS IN SUBSIDIARIES (Cont’d)
Name of subsidiary
Country of incorporation (or registration) and operation
Proportion of ownership interest and voting power held 2008 %
2007 %
Principal activity
Held by Yanlord Land Pte. Ltd. and its subsidiaries (Cont’d) Tianjin Yanlord Property Management Co., Ltd. (1) (b) 天津仁恒物业服务有限公司
PRC
100
–
Property management
Yanlord Commercial Investment (Tianjin) Co., Ltd. (1) (b) 仁恒商业投资(天津)有限公司
PRC
100
–
Management service and investment
Yanlord Development (Tianjin) Co., Ltd. (b) 仁恒发展(天津)有限公司
PRC
100
100
Property development
Zhuhai Yanlord Industrial Co., Ltd. (b) 珠海仁恒实业有限公司
PRC
95
95
Property development
Zhuhai Yanlord Property Management Co., Ltd. (b) 珠海仁恒物业管理有限公司
PRC
90
90
Property management
Zhuhai Yanlord Real Estate Development Co., Ltd. (b) 珠海仁恒置业发展有限公司
PRC
90
90
Property development
(1)
Incorporated during the year.
(2)
The proportion of ownership interest and voting power held is 50.25%.
(3)
Although the Group does not effectively own more than 50% of the equity shares of this entity, it has control over the financial and operating policies of this entity as this is majority owned by the subsidiary. Accordingly, this entity is regarded as a subsidiary.
(4)
Pursuant to the shareholder agreement signed in 2007, a subsidiary of the Company, Yanlord Land Pte. Ltd., commited to acquire the remaining interest in a subsidiary, Shanghai Yanlord Property Co., Ltd. (SYP). Yanlord Land Pte. Ltd. injected additional capital of US$99.0 million into SYP in 2007 (as part of the payment to increase ownership interest in SYP) and paid a further RMB72.2 million to the minority shareholder of SYP representing the minority shareholder’s share of reserves. The additional capital injected into SYP was utilised in acquisition of land and development of a new project in which the minority shareholder of SYP is not entitled to share the returns in accordance with the shareholder agreement. Upon payment of total consideration of $30.1 million in future, SYP will become a wholly-owned subsidiary of the Company.
(5)
Transferred from available-for-sale investments during the year (Notes 11 and 31).
94
YANLORDLAND 2008 ANNUAL REPORT
Notes to Financial Statements December 31, 2008 10
INVESTMENTS IN SUBSIDIARIES (Cont’d) Notes on auditors
11
(a)
Audited by Deloitte & Touche LLP, Singapore.
(b)
Audited by Deloitte Touche Tohmatsu, Shanghai for consolidation purposes.
AVAILABLE-FOR-SALE INVESTMENTS GROUP
Unquoted equity shares, at cost
2008 $’000
2007 $’000
10,445
52,384
The investments included above represent investments in unquoted equity shares that present the Group with opportunity for return through dividend income and capital appreciation. The management of the Company is of the view that the fair value of unquoted equity shares cannot be measured reliably as the range of reasonable fair value estimates is significant and the probabilities of the various estimates cannot be reasonably assessed. Accordingly, these investments are stated at cost. During the year, an available-for-sale investment amounting to $42.2 million was transferred to investments in subsidiaries (Note 31). The available-for-sale investments are denominated in the functional currencies of the respective entities. The management has evaluated whether there is any indicator of impairment for unquoted equity shares carried at cost, by considering both internal and external sources of information, and is satisfied that there is no such indicator.
12
INTANGIBLE ASSET GROUP 2008 $’000 Club membership
128
2007 $’000 –
At December 31, 2008, management assessed the marketable value of the club membership and determined that it was in excess of its carrying amount.
95
YANLORDLAND 2008 ANNUAL REPORT
Notes to Financial Statements December 31, 2008 13
DEFERRED TAXATION GROUP
Deferred tax assets Deferred tax liabilities
2008 $’000
2007 $’000
5,637 (46,640) (41,003)
6,849 (23,926) (17,077)
The following are the major deferred tax assets and liabilities recognised by the Group and movements thereon during the current and prior reporting year.
GROUP At January 1, 2007 (Charge) credit to profit and loss statement for the year (Note 26) Exchange differences At December 31, 2007 Charge to profit and loss statement for the year (Note 26) Exchange differences At December 31, 2008
Revaluation of investment properties $’000
Temporary difference between depreciation and tax deduction $’000
Tax loss $’000
Total $’000
(17,412)
363
5,795
(11,254)
(6,164) (350) (23,926)
(350) (71) (58)
925 187 6,907
(5,589) (234) (17,077)
(20,702) (2,012) (46,640)
(2) – (60)
(1,458) 248 5,697
(22,162) (1,764) (41,003)
Pursuant to PRC tax regulations, at the balance sheet date, the Group has unutilised tax losses of $44.5 million (2007 : $43.4 million) available for offset against future profits. A deferred tax asset has been recognised in respect of $22.7 million (2007 : $27.0 million) of such losses. No deferred tax asset has been recognised in respect of the remaining $21.8 million (2007 : $16.4 million) due to the unpredictability of future profit streams. Tax losses may be carried forward for 5 years subject to the conditions imposed by law including the retention of majority shareholders as defined.
96
YANLORDLAND 2008 ANNUAL REPORT
Notes to Financial Statements December 31, 2008 14
OTHER RECEIVABLES AND DEPOSITS GROUP 2008 $’000 Advances to suppliers Deposits for construction of properties and purchase of land for development Staff loans Prepayments (1) Sales tax prepayments Interest receivables Other receivables (2)
2007 $’000
COMPANY 2008 2007 $’000 $’000
1,669
1,108
–
–
10,522 2,269 129 1,034 – 26,300 41,923
6,823 2,178 684 4,603 44 36,056 51,496
– – – – – – –
– – 588 – – – 588
(1)
Included in prepayments is non-audit fees paid to the auditors of the Company of $Nil (2007 : $256,226) in connection with the fund-raising exercise of the Company.
(2)
Included in other receivables is an advance of $14.8 million (2007 : $14.0 million) to a PRC government agent for the resettlement of occupants relating to land which the Group intends to purchase. The advance is unsecured, interest-free and repayable within 6 months from the date of advance unless extension is mutually agreed or the resettlement of occupants is not completed. Other receivables in 2007 included an advance to a third party in connection with completion of the land title procedure amounting to $10.0 million, which was unsecured, bore interest based on market rate and repayable within 6 months from the date of advance.
The credit risk on other receivables and deposits is limited because the counterparties are government agent or third parties with long business relationships with the Group. The other receivables and deposits are substantially denominated in the functional currencies of the respective entities.
15
NON-TRADE AMOUNTS DUE FROM/TO MINORITY SHAREHOLDERS OF SUBSIDIARIES Amounts due from minority shareholders of subsidiaries are unsecured, interest free and repayable on demand except for the following: a)
An amount of $21.2 million (2007 : $20.0 million) which bore interest at 8.2% (2007 : 7.3%) per annum and is secured by undistributed retained earnings of a subsidiary yet to be distributed as dividends to the minority shareholder of that subsidiary.
b)
An amount of $1.9 million (2007 : Nil) which bore interest at 4.0% per annum.
c)
Total amount of $14.8 million (2007 : Nil) which bore interest at 7.5% per annum and is secured by future dividend distributions by a subsidiary to the minority shareholders of that subsidiary.
Amounts due to minority shareholders of subsidiaries are unsecured, interest free and repayable on demand except for a non-current amount of $69.6 million in 2008 which bore interest at 8.3% per annum and repayable within 3 years and a current amount of $26.6 million in 2007 which bore interest at 6.9% per annum.
97
YANLORDLAND 2008 ANNUAL REPORT
Notes to Financial Statements December 31, 2008 15
NON-TRADE AMOUNTS DUE FROM/TO MINORITY SHAREHOLDERS OF SUBSIDIARIES (Cont’d) The carrying amounts of amounts due from/to minority shareholders of subsidiaries approximate their fair values due to the relatively short term maturity of interest-free balances or the interest rates approximate the prevailing market rates. Non-trade amounts due to minority shareholders of subsidiaries are denominated in the functional currencies of respective entities. The non-trade amounts due from minority shareholders of subsidiaries that are not denominated in the functional currencies of the respective entities are as follows: GROUP 2008 $’000 HK dollars RMB
16
COMPANY 2007 $’000
2008 $’000
2007 $’000
2,025
–
–
–
15,443
–
–
–
HELD-FOR-TRADING INVESTMENTS GROUP 2008 $’000 Quoted equity securities, at fair value
1,101
2007 $’000 3,323
Held-for-trading investments present the Group with opportunities for return through dividend income and fair value gains. These investments have no fixed maturity or coupon rate. The fair values of these securities are based on closing quoted market price on the last market day of the financial year. The held-for-trading investments are denominated in HK dollars.
17
CASH AND BANK BALANCES AND PLEDGED BANK DEPOSITS GROUP 2008 $’000 Cash on hand Cash at bank Fixed deposits Cash and cash equivalents Pledged bank deposits
98
YANLORDLAND 2008 ANNUAL REPORT
COMPANY 2007 $’000
2008 $’000
2007 $’000
396
533
–
–
323,342
448,482
380
140
52,003
253,842
–
93,319
375,741
702,857
380
93,459
8,272
3,155
–
–
Notes to Financial Statements December 31, 2008 17
CASH AND BANK BALANCES AND PLEDGED BANK DEPOSITS (Cont’d) Pledged bank deposits, cash and bank balances comprise cash held by the Group and short term bank deposits with an original maturity of 6 months or less. The carrying amounts of these assets approximate their fair values. The effective interest rates for fixed deposits and pledged bank deposits are 1.5% (2007 : 3.0%) and 4.3% (2007 : 3.4%) per annum respectively. Pledged bank deposits represent deposits pledged to banks to secure bank loans and as securities for construction contracts required by certain local authorities. The cash and bank balances that are not denominated in the functional currencies of the respective entities are as follows: GROUP
US dollars
18
COMPANY
2008 $’000
2007 $’000
18,760
109,647
2008 $’000
2007 $’000
66
51,724
SHARE CAPITAL GROUP AND COMPANY 2008 2007 ’000 ’000 Number of ordinary shares
2008 $’000
2007 $’000
Issued and paid up: At beginning of year
1,825,814
1,624,523
1,219,081
780,175
Issuance of shares pursuant to international offerings exercise, net of expenses
–
150,000
–
299,213
Conversion of convertible notes
–
51,291
–
139,693
Issuance of shares under Pre-IPO Share Option Scheme At end of year
5,520
–
7,087
–
1,831,334
1,825,814
1,226,168
1,219,081
In 2007, 51,291,000 ordinary shares were issued pursuant to the conversion of convertible notes. As the convertible notes have been accounted for as a compound instrument comprising of liability and equity components, the value of issued share capital upon conversion comprises the liability component and equity component of $120,312,000 and $19,381,000 respectively. Fully paid up ordinary shares, which have no par value, carry one vote per share and carry a right to dividends.
99
YANLORDLAND 2008 ANNUAL REPORT
Notes to Financial Statements December 31, 2008 19
BANK LOANS GROUP 2008 $’000
2007 $’000
The bank loans are repayable as follows: On demand or within one year
347,339
147,068
More than one year but not exceeding two years
662,160
146,844
More than two years but not exceeding five years
167,206
379,096
1,176,705
673,008
Less: Amount due for settlement within 12 months (shown under current liabilities)
(347,339)
(147,068)
Amount due for settlement after 12 months
829,366
525,940
– Current bank loans
254,979
114,052
– Non-current bank loans
461,537
164,075
716,516
278,127
460,189
394,881
1,176,705
673,008
Secured
Unsecured
The above secured bank loans are pledged on the following: GROUP 2008 $’000
2007 $’000
Properties for development
386,123
253,776
Properties under development for sale
777,548
619,256
Completed properties for sale
197,871
19,278
Investment properties
30,478
108,550
Leasehold land and buildings
10,133
–
2,704
–
Bank deposits
The bank loans that are not denominated in the functional currencies of the respective entities are as follows: GROUP
HK dollars
100
YANLORDLAND 2008 ANNUAL REPORT
2008 $’000
2007 $’000
288,121
289,832
Notes to Financial Statements December 31, 2008 19
BANK LOANS (Cont’d) In 2008, the bank loans for the purpose of property development, amounting to $288.1 million (2007 : $289.8 million) bear floating interest rate (1.5% to 1.6% plus HIBOR rate of the bank) of 5.09% to 5.13% (2007 : 5.3% to 5.4%) per annum due in 2009 and 2010. The other bank loans which are for the purpose of property development, bear floating interest rate based on a bank’s prime rate and the average effective interest rate was 7.2% (2007 : 6.9%) per annum. The carrying amounts of bank loans approximate their fair values as the interest rates approximate the prevailing market rates.
20
CONVERTIBLE NOTES The convertible notes were issued on February 6, 2007. The convertible notes will mature on February 6, 2012. The convertible notes accrue interest at 4.00% per annum, compounded semi-annually. Accrued interest on a convertible notes is payable only at maturity or upon early redemption, and will be foregone upon conversion of the convertible notes. The conversion price was initially $2.7531 per share, and has been adjusted to $2.7100 on account of the dividend distributions for the financial year ended December 31, 2006. The conversion price may be further adjusted for certain specified dilutive events. The notes are convertible into 124,815,535 new ordinary shares of the Company as at December 31, 2008 and 2007 based on the adjusted conversion price at the option of the holders. The net proceeds received from the issue of the convertible notes have been allocated between the liability component and the equity component which represents the fair value of the embedded option to convert the liability into equity: GROUP AND COMPANY 2008 $’000
2007 $’000
Nominal value of convertible notes issued
477,250
477,250
Equity component (gross)
(69,063)
(69,063)
Transaction costs *
(14,877)
(14,877)
Liability component at date of issue
393,310
393,310
50,564
26,197
Converted to equity
(120,312)
(120,312)
Liability component at end of year
323,562
299,195
Cumulative interest charged
*
Transaction costs included non-audit fees of $252,430 paid to the auditors of the Company in 2007 in connection with the international offering of shares and convertible notes exercise of the Company.
The interest charged for the year is calculated by applying an effective interest rate of 8.0% per annum to the liability component for the twelve-month (2007 : eleven-month) period since the convertible notes were issued.
101
YANLORDLAND 2008 ANNUAL REPORT
Notes to Financial Statements December 31, 2008 20
CONVERTIBLE NOTES (Cont’d) The management estimates the fair value of the liability component of the convertible notes at December 31, 2008 to be approximately $185.4 million (2007 : $273.2 million). This fair value has been calculated by assuming redemption on February 6, 2012 and using interest rate of 27.6% (2007 : 10.3%) per annum, compounded semi-annually. The interest rate is based on Singapore government’s two-year treasury bill rate of 3.1% (2007 : five-year treasury bill rate of 2.5%) per annum which matured on February 1, 2011, a credit spread risk margin of 19.6% (2007 : 5.6%) per annum and holding the liquidity risk rate as a percentage of both the risk free rate and the liquidity risk rate constant. The convertible notes are denominated in the functional currency of the Company.
21
TRADE PAYABLES GROUP
Outside parties
2008 $’000
2007 $’000
335,511
311,565
The average credit period for trade payables is 116 days (2007 : 108 days). The trade payables are substantially denominated in the functional currencies of the respective entities.
22
OTHER PAYABLES GROUP
Advances received from buyers Accrued expenses Other payables
COMPANY
2008 $’000
2007 $’000
2008 $’000
2007 $’000
129,498
242,270
–
–
6,302
4,369
463
462
87,990
28,756
–
332
223,790
275,395
463
794
The other payables are substantially denominated in the functional currencies of the respective entities.
102
YANLORDLAND 2008 ANNUAL REPORT
Notes to Financial Statements December 31, 2008 23
REVENUE GROUP 2008 $’000
2007 $’000
1,033,156
1,273,852
Less: Business tax
(52,173)
(64,258)
Net income from sale of properties in the PRC
980,983
1,209,594
Property management fee income
17,404
11,059
Less: Business tax
(1,140)
(1,032)
Net property management fee income
16,264
10,027
Rental and other service income
10,860
8,787
(890)
(476)
9,970
8,311
1,007,217
1,227,932
Gross income from sale of properties in the PRC
Less: Business tax Net rental and other service income Total
24
OTHER OPERATING INCOME GROUP 2008 $’000 Interest income
2007 $’000
7,957
21,236
–
1,721
81,220
39,634
3,115
2,257
27
73
–
299
11
–
Net gain on disposal of held-for-trading investments
–
4,123
Net gain on disposal of investment properties
–
361
4,038
6,352
Government subsidies
8,132
4,230
Others
7,914
3,583
112,414
83,869
Fair value gain on held-for-trading investments Fair value gain on investment properties (Note 8) Dividend income from an available-for-sale investment Dividend income from held-for-trading investments Doubtful debts recovered Net gain on disposal of property, plant and equipment
Tax subsidies
Total (1)
(1)
Pursuant to relevant laws and regulations in the PRC, a subsidiary, being the investor of the subsidiaries in the PRC, received tax refunds from the tax bureau of the PRC because the Group has increased its investment in the PRC subsidiaries by way of capitalising the accumulated profits of those subsidiaries.
103
YANLORDLAND 2008 ANNUAL REPORT
Notes to Financial Statements December 31, 2008 25
FINANCE COST GROUP 2008 $’000
2007 $’000
Interest on bank loans
71,827
26,549
Interest on convertible notes
24,367
26,197
895
–
3,705
1,912
100,794
54,658
– properties under development for sale
(62,834)
(23,163)
– properties for development
(33,221)
(16,144)
4,739
15,351
Interest expense to a shareholder Interest expense to minority shareholders of subsidiaries Total Less: Interest capitalised in
Net
26
INCOME TAX GROUP 2008 $’000
2007 $’000
Current – Foreign
69,126
66,636
Deferred (Note 13)
22,162
5,589
174,728
128,181
Withholding tax
385
–
Under provision in prior years
526
481
266,927
200,887
Land appreciation tax (“LAT”)
Net
No provision for Singapore taxation has been made as the majority of the Group’s income neither arises in, nor is derived from Singapore. Taxation arising in the PRC is calculated at the prevailing rate of 18% (2007 : 15%) for major operating subsidiaries. The prevailing rate in the other subsidiaries is at 10% to 25% (2007 : 15% to 33%). On March 16, 2007, the PRC promulgated the Law of the PRC on Enterprise Income Tax (“New Law”) by Order No.63 of the President of the PRC, with an effective date of January 1, 2008. On December 28, 2007, the State Council of the PRC issued Implementation Regulations of the New Law. Due to the New Law and Implementation Regulations, the PRC subsidiaries will be subject to 25% Enterprise Income Tax, commencing January 1, 2008 except that certain subsidiaries which originally enjoy the preferential tax rates shall gradually transit to the tax rate of 25% within 5 years after the enforcement of the new tax law.
104
YANLORDLAND 2008 ANNUAL REPORT
Notes to Financial Statements December 31, 2008 26
INCOME TAX (Cont’d) The income tax expense varied from the amount of income tax expense determined by applying the above income tax rate to profit before income tax as a result of the following differences: GROUP 2008 $’000
2007 $’000
104,559
80,639
Non-deductible items
3,265
207
Non-taxable items
(1,124)
(428)
Effect of unutilised tax losses not recognised as deferred tax assets
1,585
2,522
15,045
9,073
Income tax expense at PRC applicable tax rate of 18%* (2007 : 15%*)
Effect of different tax rates for certain subsidiaries Effect of LAT
143,277
108,954
Withholding tax
385
–
Under provision in prior years
526
481
Others
(591)
(561)
266,927
200,887
Total income tax expense *
These are the applicable tax rates for most of the Group’s taxable profits.
Income tax for overseas subsidiaries is calculated at the rates prevailing in the respective jurisdictions. LAT There is no significant development in LAT ruling and interpretation in 2007 and 2008. As previously disclosed in prior years’ audited consolidated financial statements, the directors of the Company, after taking into account legal advice received and consulting the local Shanghai Pudong Tax Bureau, are of the opinion that the relevant tax authority is not likely to impose any LAT on a retrospective basis. Accordingly, no provision has been made in respect of those properties sold in Pudong New District prior to October 1, 2006. If LAT was to be levied on the Group’s Shanghai Pudong New District properties in accordance with the Provisional Regulations on a retrospective basis, the Group would have incurred additional LAT in the aggregate amount of $111.6 million for the financial periods prior to October 1, 2006, as adjusted for minority interests and for income tax deductions. Should any of these exposures materialise, the Group’s current year net profit will be impacted by the same amount. The management of the Company is of the view that the actual LAT payable as required under the Provisional Regulations approximates the amount of LAT actually paid and accrued by the Group for the PRC subsidiaries as at December 31, 2008. The actual Group’s LAT liabilities are subject to the determination by the tax authorities upon completion of the property development projects and are subject to the specific implementation rules or measures mentioned above.
105
YANLORDLAND 2008 ANNUAL REPORT
Notes to Financial Statements December 31, 2008 27
PROFIT FOR THE YEAR Profit for the year has been arrived at after charging (crediting): GROUP 2008 $’000 Depreciation of property, plant and equipment
(1)
2007 $’000
4,301
3,075
Equity-settled share-based payments
1,148
2,290
Retirement benefit scheme contributions
2,602
2,226
Salaries and other short-term benefits
40,901
36,849
Total employee benefits expense
44,651
41,365
400
620
4,332
5,422
700
550
5,032
5,972
Employee benefits expense (including directors’ remuneration):
Directors’ fees Directors’ remuneration: – of the Company – of the subsidiaries
GROUP 2008 $’000
2007 $’000
(1,498)
(3,445)
(Gain) loss on acquisition of additional interest from a minority shareholder
(15)
37
Goodwill written off (Note 31)
632
–
2,155
(1,721)
Net (gain) loss on disposal of property, plant and equipment
(11)
28
Net loss (gain) on disposal of investment properties
109
(361)
423,399
670,206
– paid to auditors of the Company
45
103
– paid to other auditors
95
202
Net foreign exchange gains
Fair value loss (gain) on held-for-trading investments
Cost of completed properties for sale recognised as expenses Non-audit fees:
(1)
106
For 2008, $401,000 (2007 : $289,000) of depreciation of property, plant and equipment is capitalised in properties for development and properties under development for sale.
YANLORDLAND 2008 ANNUAL REPORT
Notes to Financial Statements December 31, 2008 28
EARNINGS PER SHARE The calculation of the basic and diluted earnings per share attributable to the ordinary equity holders of the Company is based on the following data: GROUP 2008 $’000
2007 $’000
225,841
221,500
2,437
14,366
228,278
235,866
Earnings Earnings for the purposes of basic earnings per share (profit for the year attributable to equity holders of the Company) Effect of dilutive potential ordinary shares: Interests on convertible notes Earnings for the purposes of diluted earnings per share
GROUP 2008 $’000
2007 $’000
1,828,002
1,769,478
5,283
9,159
124,815
165,947
1,958,100
1,944,584
Basic
12.35
12.52
Diluted
11.66
12.13
Number of shares Weighted average number of ordinary shares for the purposes of basic earnings per share Effect of dilutive potential ordinary shares: Share options Convertible notes Weighted average number of ordinary shares for the purposes of diluted earnings per share Earnings per share (cents):
29
DIVIDENDS For the financial year ended December 31, 2007, the directors declared that a first and final one-tier tax exempt dividend of 1.21 cents per ordinary share amounting to $22,092,355, which was paid during 2008. In 2007, $51,283,715 of dividend was paid in respect of a first and final one-tier tax exempt dividend of 2.89 cents per ordinary share declared for the year ended December 31, 2006. In respect of the current year, the directors proposed a first and final one-tier tax exempt dividend of 1.23 cents per ordinary share amounting to $22,525,414. The dividend is subject to approval by shareholders at the Annual General Meeting and has not been included as a liability in these financial statements.
107
YANLORDLAND 2008 ANNUAL REPORT
Notes to Financial Statements December 31, 2008 30
SEGMENT INFORMATION The Group’s operations are located in the PRC and substantially the Group’s revenue and contribution to profit from operations are derived from residential property development and sales. Accordingly, no analysis by business segment and geographical area of operations are provided.
31
ACQUISITION OF SUBSIDIARIES On April 2, 2008, a subsidiary of the Company, Yanlord Development (Tianjin) Co., Ltd. (“YDT”), acquired an additional shareholding interest of 70.6% in Tianjin Yanlord Haihe Development Co., Ltd. (“TYHD”) for a total cash consideration of approximately $317.7 million (RMB1,599.2 million), which includes commitment for capital injection of $138.9 million (RMB699.2 million) in future as included in Note 34 to the financial statements. Following the acquisition, the Group’s shareholding in TYHD held though YDT increased from 9.4% to 80.0%. This transaction has been accounted for by the purchase method of accounting. On September 25, 2007, a subsidiary of the Company, Yanlord Land Pte. Ltd., acquired a whollyowned subsidiary, incorporated in Hong Kong, East Hero Investment Ltd. (“East Hero”), for a total cash consideration of approximately $48.3 million (RMB238.7 million). At the time of acquisition, East Hero held 75% shareholding interest in Shenzhen Long Wei Xin Investment Co., Ltd., a company incorporated in the PRC. This transaction had been accounted for by the purchase method of accounting. The net assets acquired in the transaction are as follows: Carrying amount before Fair value acquisition adjustments $’000 $’000
Fair value $’000
2008 Net assets acquired: Properties for development Cash and bank balances Other receivables and deposits
176,944
–
176,944
44,049
–
44,049
8
–
8 221,001
Minority interests
(637)
Goodwill written off (Note 27)
632
Interest in a subsidiary previously accounted for as available-for-sale investments (Note 11)
(42,205)
Total consideration satisfied by cash
178,791
Net cash outflow arising on acquisition: Cash consideration Cash and bank balances of subsidiary acquired
(178,791) 44,049 (134,742)
108
YANLORDLAND 2008 ANNUAL REPORT
Notes to Financial Statements December 31, 2008 31
ACQUISITION OF SUBSIDIARIES (Cont’d) Carrying amount before Fair value acquisition adjustments $’000 $’000
Fair value $’000
2007 Net assets acquired: Property, plant and equipment Properties for development Cash and bank balances Other payables
38
–
38
47,106
64,065
487
–
487
(15,885)
–
(15,885)
16,959
48,705 Minority interests Total consideration
(401) 48,304
Total consideration – satisfied by cash
10,195
– amount payable
38,109 48,304
Net cash outflow arising on acquisitions: Cash consideration Cash and bank balances of subsidiaries acquired
(10,195) 487 (9,708)
The management is of the view that the deferred tax impact on excess of the Group’s interest in the net fair value of the acquired subsidiaries’ identifiable assets, liabilities and contingent liabilities over cost is not significant. The subsidiary acquired during the year contributed $0.005 million loss (2007 : $0.1 million loss) to the Group’s profit for the year for the period between the date of acquisition and the balance sheet date. There is no revenue contributed by the subsidiary acquired (2007 : Nil). If the acquisition had been completed on January 1, total Group’s profit for the year in 2008 would have decreased by $0.8 million to $313.2 million (2007 : decreased by $0.6 million to $336.1 million). There is no impact to total Group revenue. 32
SHARE-BASED PAYMENTS The options under the Scheme grant the right to the holder to subscribe for new ordinary shares of the Company at the discount of fifteen percent (15%) of the IPO offer share price of $1.08. The options granted under the Scheme will be exercisable after the second anniversary of the date of grant of the options and all options must be exercised before the fifth anniversary from the date of grant of the options. The maximum number of shares in respect of which options may be granted under the Scheme shall not exceed 1% of the issued share capital of the Company on the date immediately preceding the Offer Date of the Option.
109
YANLORDLAND 2008 ANNUAL REPORT
Notes to Financial Statements December 31, 2008 32
SHARE-BASED PAYMENTS (Cont’d) Each option grants the holder the right to subscribe for one ordinary share in the Company. The options may be exercised in full or in part thereof. By virtue of the options, the holders do not have the right to participate in any share issue of the other companies in the Group. Options granted are cancelled when the holder is no longer a full time employee of the Company or any corporations in the Group subject to certain exceptions in accordance with the rules of the Scheme. The above share option scheme is administered by a Pre-IPO Share Option Management Committee. Details of the share options outstanding during the year are as follows: GROUP AND COMPANY 2008 Number of share options ’000
2007 Weighted average exercise price $
Weighted average exercise price $
Number of share options ’000
Outstanding at beginning of year
13,032
0.92
13,912
0.92
Exercised during the year
(5,520)
0.92
–
–
(110)
0.92
(880)
0.92
7,402
0.92
13,032
0.92
Lapsed during the year Outstanding at end of year
The options outstanding at end of the year have a weighted average remaining contractual life of 2.5 years (2007 : 3.5 years). The estimated fair values of the options granted on June 21, 2006 were $5.3 million. These fair values for share options granted in 2006 were calculated using the Black-Scholes pricing model. The inputs into the model were as follows: Weighted average share price ($)
1.08
Weighted average exercise price ($)
0.92
Expected volatility
20.04%
Expected life
2
Risk free rate
3.64%
Expected dividend yield
–
Expected volatility was determined by calculating the historical volatility of the Company’s share price over the previous 3 months. The expected life used in the model has been adjusted, based on management’s best estimate, for the effects of non-transferability, exercise restrictions and behavioural considerations. The Group and the Company recognised total expense of $1.1 million (2007 : $2.3 million) related to equitysettled share-based payment transactions during the year.
110
YANLORDLAND 2008 ANNUAL REPORT
Notes to Financial Statements December 31, 2008 33
OPERATING LEASE ARRANGEMENTS The Group as leasee GROUP
Minimum lease payments under operating leases recognised as an expense in the year
2008 $’000
2007 $’000
4,581
3,277
At the balance sheet date, the Group has outstanding commitments under non-cancellable operating leases, which fall due as follows: GROUP 2008 $’000
2007 $’000
Within one year
4,751
4,077
In the second to fifth year inclusive
6,093
5,574
–
52
10,844
9,703
More than five years
Operating lease payments represent rental payables by the Group in respect of land and buildings for its office premises and staff accommodation. Leases are negotiated for an average term of less than two years. The Group as lessor The Group rents out its investment properties and certain completed properties for sale in the PRC under operating leases. Property rental income earned during the year was $4.6 million (2007 : $1.6 million). At the balance sheet date, the Group has contracted with tenants for the following future minimum lease payments: GROUP
Within one year In the second to fifth year inclusive More than five years
2008 $’000
2007 $’000
4,652
1,826
11,545
3,765
3,356
626
19,553
6,217
111
YANLORDLAND 2008 ANNUAL REPORT
Notes to Financial Statements December 31, 2008 34
CAPITAL EXPENDITURE COMMITMENTS Estimated amounts committed for future capital expenditure but not provided for in the financial statements: GROUP 2008 $’000 Construction of properties
510,900
644,217
Acquisition of land use rights
193,741
507,950
Acquisition of shareholding rights
178,084
25,548
4
524
882,729
1,178,239
Others
35
2007 $’000
CONTINGENCY AND GUARANTEES As at December 31, 2008, the Group has provided guarantees of approximately $228.8 million (2007 : $224.3 million) to banks for the benefit of its customers in respect of the mortgage loans provided by the banks to customers for the purchase of the Group’s development properties. Should such guarantees be called upon, there would be an outflow of cash (previously collected by the Group) from the Group to the banks to discharge the obligations. Management has made enquiries with the banks and considered the profile of customers who buy the Group’s properties and concluded that the likelihood of these guarantees being called upon is low. These guarantees provided by the Group to the banks would be released upon receiving the building ownership certificate of the respective properties by the banks from the customers as a pledge for security for the mortgage loan granted. As at December 31, 2008 and 2007, the Company together with six of its subsidiaries has provided a joint guarantee to banks in respect of a banking facility granted to a subsidiary amounting to US$200.0 million (equivalent to $289.3 million) for a term of two years (2007 : three years) up to November 6, 2010. The management is of the view that the fair values of the financial guarantees provided by the Group and the Company are not significant.
36
RETIREMENT BENEFITS SCHEME The relevant PRC subsidiaries are required to make contributions to the state-managed retirement schemes in the PRC based on certain percentage of the monthly salaries of their current employees to fund the benefits. The employees are entitled to retirement pension calculated with reference to their basic salaries on retirement and their length of service in accordance with the relevant government regulations. The only obligation of the PRC subsidiaries with respect to the state-managed schemes is to make the specified contributions. The PRC government is responsible for the pension liability to these retired staff. As at December 31, 2008 and 2007, no contributions in respect of the current reporting years had not been paid to the schemes.
112
YANLORDLAND 2008 ANNUAL REPORT
Notes to Financial Statements December 31, 2008 37
SUBSEQUENT EVENTS Subsequent to year ended December 31, 2008, the Group has through its subsidiary, Yanlord Land Pte. Ltd. (“YLPL”), entered into: a)
A share transfer agreement with Yanlord Property Pte. Ltd. (“YPPL”), a subsidiary with a shareholding ratio of 60:40 held by YLPL and Reco Yizhong Private Limited (“Reco”) respectively, to transfer YLPL’s entire shareholding interest of 100% in Yanlord Property (Suzhou) Co., Ltd. (“YPSuzhou”) to YLPL for a total consideration of approximately $412.0 million. Upon completion of the transfer, the Group’s beneficial interest in YPSuzhou, held through YPPL, will be reduced to 60%.
b)
Another share transfer agreement (“STA”) with Reco to transfer YLPL’s entire shareholding interest of 40% in Shanghai Yanlord Senlan Real Estate Co., Ltd. (“SYSRE”) for a nominal consideration of $2 to Reco. SYSRE was incorporated in 2009 and has a shareholding ratio of 40:60 held by YLPL and Shanghai Yanlord Property Co., Ltd. (“SYP”) respectively before the proposed transfer. In addition, Reco will inject approximately $100.7 million of registered capital into SYSRE within 7 business days from the effective date of legal transfer of the 40% stake. Upon completion of the STA, SYP and Reco will each hold a stake of 60% and 40% respectively in the equity of SYSRE.
113
YANLORDLAND 2008 ANNUAL REPORT
Statement of Directors In the opinion of the directors, the consolidated financial statements of the Group and the balance sheet and statement of changes in equity of the Company set out on pages 58 to 113 are drawn up so as to give a true and fair view of the state of affairs of the Group and of the Company as at December 31, 2008, and of the results, changes in equity and cash flows of the Group and the changes in equity of the Company for the financial year then ended and at the date of this statement, there are reasonable grounds to believe that the Company will be able to pay its debts when they fall due.
ON BEHALF OF THE DIRECTORS
Zhong Sheng Jian
Chan Yiu Ling
March 27, 2009
114
YANLORDLAND 2008 ANNUAL REPORT
Interested Person Transactions The aggregate value of interest person transactions during the financial year under review is as follows:
Name of Interested Person Yanlord Holdings Pte. Ltd.*
Aggregate value of all interested person transactions during the financial year under review (excluding transactions less than S$100,000 and transactions conducted under shareholders’ mandate pursuant to Rule 920) FY2008 S$4,636,359
Aggregate value of all interested person transactions conducted under shareholders’ mandate pursuant to Rule 920 (excluding transaction less than S$100,000) FY2008 Nil
Pretty Honour Investment Limited*
S$5,206,400
Nil
Mrs. Zhong Lin Miao Jun*
S$4,448,449
Nil
S$82,051
Nil
Mr. Zheng Xi* Mr. Hong Zhi Hua and Ms. Hong Lu Qi** Total
S$461,396
Nil
S$14,834,655
Nil
Notes: *
Associates (as defined in the SGX Listing Manual) of Mr. Zhong Sheng Jian, director and controlling shareholder of the Company.
**
Ms. Hong Lu Qi is an associate (as defined in the SGX Listing Manual) of Mr. Hong Zhi Hua, director of the Company.
There was no material contract entered into by the Company and its subsidiaries involving the interests of the chief executive officer or any director or controlling shareholder, either still subsisting at the end of the financial year or entered into since the end of the previous financial year.
Use of Proceeds The proceeds raised by the Company from its concurrent offerings of ordinary shares and convertible notes in February 2007 had been fully utilised as per the Company’s SGXNET announcement dated 13 June 2008.
115
YANLORDLAND 2008 ANNUAL REPORT
Shareholding Statistics As at 16 March 2009
Number of Shares Issued Class of Shares Issued and Paid-up Share Capital
: : :
1,831,334,476 Ordinary shares with equal voting rights S$1,246,942,240
Size of Shareholdings
No. of Shareholders
1 – 999
Percentage (%)
No. of Shares
Percentage (%)
12
0.30
1,474
0.00
1,000 – 10,000
3,040
74.40
14,947,146
0.82
10,001 – 1,000,000
1,013
24.79
45,574,521
2.49
21
0.51
1,770,811,335
96.69
4,086
100.00
1,831,334,476
100.00
No. of Shares
Percentage (%)
1,000,001 and above TOTAL
TWENTY LARGEST SHAREHOLDERS Name of Shareholders HL BANK NOMINEES (SINGAPORE) PTE LTD
698,186,000
38.12
YANLORD HOLDINGS PTE. LTD.
426,580,000
23.29
ABN AMRO NOMINEES SINGAPORE PTE LTD
160,011,000
8.74
CITIBANK NOMINEES SINGAPORE PTE LTD
115,382,693
6.30
HSBC (SINGAPORE) NOMINEES PTE LTD
85,694,355
4.68
DBS NOMINEES PTE LTD
84,740,329
4.63
UOB KAY HIAN PTE LTD
58,318,000
3.18
DBSN SERVICES PTE LTD
38,156,048
2.08
RAFFLES NOMINEES PTE LTD
30,270,978
1.65
UNITED OVERSEAS BANK NOMINEES (PTE) LTD
21,788,160
1.19
WANG NANHUA
10,010,000
0.55
DBS VICKERS SECURITIES (SINGAPORE) PTE LTD
9,641,000
0.53
MORGAN STANLEY ASIA (SINGAPORE) SECURITIES PTE LTD
9,476,257
0.52
DB NOMINEES (SINGAPORE) PTE LTD
7,479,037
0.41
BNP PARIBAS NOMINEES SINGAPORE PTE LTD
3,157,000
0.17
PHILLIP SECURITIES PTE LTD
3,105,000
0.17
OCBC SECURITIES PRIVATE LTD
2,113,000
0.12
ZHONG HAISHENG
1,761,000
0.10
MERRILL LYNCH (SINGAPORE) PTE LTD
1,746,478
0.10
KIM ENG SECURITIES PTE. LTD.
1,679,000
0.09
1,769,295,335
96.62
TOTAL
116
YANLORDLAND 2008 ANNUAL REPORT
Shareholding Statistics As at 16 March 2009 SUBSTANTIAL SHAREHOLDERS No. of Shares Held
Name YANLORD HOLDINGS PTE. LTD.1 2
ZHONG SHENG JIAN
Deemed Interest
Percentage (%)
Total Interest (%)
Direct Interest
Percentage (%)
1,277,514,000
69.76
–
–
69.76
1,987,000
0.11
1,277,514,000
69.76
69.87
Notes: 1
Interest held directly and via nominee accounts.
2
Zhong Sheng Jian is deemed to be interested in 1,277,514,000 ordinary shares held by Yanlord Holdings Pte. Ltd.
Based on the information available to the Company as at 16 March 2009, approximately 27% of the issued ordinary shares of the Company is held by the public and accordingly, Rule 723 of the Listing Manual issued by the Singapore Exchange Securities Trading Limited has been complied with.
117
YANLORDLAND 2008 ANNUAL REPORT
Notice of Annual General Meeting NOTICE IS HEREBY GIVEN that an Annual General Meeting (“AGM”) of Yanlord Land Group Limited (“Company” or “Yanlord”) will be held on Wednesday, 29 April 2009 at 2.00 p.m. at the Vanda Ballroom, Marina Mandarin Singapore, Level 5, 6 Raffles Boulevard, Marina Square, Singapore 039594 to transact the following business:
AS ROUTINE BUSINESS 1.
To receive and adopt the directors’ report and the audited financial statements of the Company for the financial year ended 31 December 2008 together with the auditors’ reports thereon. (Resolution 1)
2.
To declare a first and final (one-tier) tax-exempt dividend of 1.23 Singapore cents per ordinary share for the year ended 31 December 2008. (Resolution 2)
3.
To approve the payment of Directors’ Fees of S$400,000 for the year ended 31 December 2008. (Resolution 3)
4.
To re-elect the following Directors, each of whom will retire pursuant to Article 91 of the Articles of Association (“AA”) of the Company and who, being eligible, offer themselves for re-election: a) b) c)
5.
Mr. Zhong Siliang Mr. Ng Ser Miang Ms. Ng Shin Ein
(Resolution 4a) (Resolution 4b) (Resolution 4c)
To re-appoint Messrs Deloitte & Touche LLP as Auditors of the Company and to authorize the Directors to fix their remuneration. (Resolution 5)
AS SPECIAL BUSINESS 6.
To consider and, if thought fit, to pass with or without any amendments, the following resolutions as Ordinary Resolutions:
6A.
That authority be and is hereby given to the Directors of the Company to:(a)
(i)
allot and issue shares in the capital of the Company (“shares”) whether by way of rights, bonus or otherwise; and/or
(ii)
make or grant offers, agreements or options (collectively, “Instruments” and each, an “Instrument”) that might or would require shares to be issued, including but not limited to the creation and issue of (as well as adjustments to) warrants, debentures or other instruments convertible into shares,
at any time and upon such terms and conditions and for such purposes and to such persons as the Directors may, in their absolute discretion, deem fit; and (b)
118
(notwithstanding the authority conferred by this Resolution may have ceased to be in force) issue shares in pursuance of any Instrument made or granted by the Directors while this Resolution was in force,
YANLORDLAND 2008 ANNUAL REPORT
Notice of Annual General Meeting provided that: (1)
the aggregate number of shares to be issued pursuant to this Resolution (including shares to be issued in pursuance of Instruments made or granted pursuant to this Resolution): (A)
by way of renounceable rights issues on a pro-rata basis to shareholders of the Company (“Renounceable Rights Issues”) shall not exceed one hundred per cent. (100%) of the total number of issued shares (excluding treasury shares) in the capital of the Company (as calculated in sub-paragraph (3) below; and
(B)
otherwise than by way of Renounceable Rights Issues (“Other Share Issues”) shall not exceed fifty per cent. (50%) of the total number of issued shares (excluding treasury shares) in the capital of the Company (as calculated in accordance with sub-paragraph (3) below), of which the aggregate number of shares to be issued other than on a pro-rata basis to shareholders of the Company (including shares to be issued in pursuance of Instruments made or granted pursuant to this Resolution) does not exceed twenty per cent. (20%) of the total number of issued shares (excluding treasury shares) in the capital of the Company (as calculated in accordance with sub-paragraph (3) below);
(2)
the Renounceable Rights Issues and Other Share Issues shall not, in aggregate, exceed one hundred per cent. (100%) of the total number of issued shares (excluding treasury shares) in the capital of the Company (as calculated in sub-paragraph (3) below);
(3)
(subject to such manner of calculation as may be prescribed by Singapore Exchange Securities Trading Limited (“SGX-ST”) for the purpose of determining the aggregate number of shares that may be issued under sub-paragraphs (1)(A) and (1)(B) above, the total number of issued shares (excluding treasury shares) shall be based on the total number of issued shares (excluding treasury shares) in the capital of the Company at the time this Resolution is passed, after adjusting for:(i)
new shares arising from the conversion or exercise of any convertible securities or share options on issue at the time this Resolution is passed; and
(ii)
any subsequent bonus issue, consolidation or subdivision of shares;
(4)
in exercising the authority conferred by this Resolution, the Company shall comply with the provisions of the Listing Manual of SGX-ST for the time being in force (unless such compliance has been waived by the SGX-ST) and the AA for the time being of the Company; and
(5)
(unless revoked or varied by the Company in general meeting) the authority conferred by this Resolution shall continue in force until the conclusion of the next AGM of the Company or the date by which the next AGM is required by law to be held, whichever is the earlier. (Resolution 6)
119
YANLORDLAND 2008 ANNUAL REPORT
Notice of Annual General Meeting 6B.
That subject to and pursuant to the share issue mandate in 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 20% discount for new shares to the weighted average price per share determined in accordance with the requirements of the SGX-ST. (Resolution 7)
6C.
That approval be and is hereby given to the Directors to:(a)
offer and grant options in accordance with the provisions of the Yanlord Land Group Share Option Scheme 2006 (“ESOS 2006”); and
(b)
allot and issue from time to time such number of shares in the capital of the Company as may be issued pursuant to the exercise of options under the ESOS 2006,
provided that the aggregate number of shares to be issued pursuant to the ESOS 2006 shall not exceed fifteen per cent. (15%) of the total issued shares in the capital of the Company from time to time. (Resolution 8) 7.
To transact any other ordinary business which may properly be transacted at an annual general meeting.
NOTICE OF BOOKS CLOSURE AND DIVIDEND PAYMENT DATES NOTICE IS ALSO HEREBY GIVEN THAT the Share Transfer Books and Register of Members of the Company will be closed on 20 May 2009, for the purpose of determining the shareholders’ entitlements to the first and final (one-tier) tax-exempt dividend of 1.23 Singapore cents per ordinary share for the year ended 31 December 2008 (“Proposed Dividend”) to be proposed at the AGM of the Company to be held on 29 April 2009. Duly completed registrable transfers in respect of shares of the Company received by the Company’s Share Registrar, Boardroom Corporate & Advisory Services Pte. Ltd., of 3 Church Street, #08-01, Samsung Hub, Singapore 049483 up to 5.00 p.m. on 19 May 2009 will be registered to determine shareholders’ entitlements to the Proposed Dividend. Shareholders whose securities accounts with the Central Depository (Pte) Limited are credited with shares as at 5.00 p.m. on 19 May 2009 will be entitled to the Proposed Dividend. The Proposed Dividend, if approved at the forthcoming AGM, will be paid on 5 June 2009.
BY ORDER OF THE BOARD Tan Shook Yng Company Secretary 13 April 2009 Singapore
120
YANLORDLAND 2008 ANNUAL REPORT
Notice of Annual General Meeting Notes: (i)
A shareholder of the Company entitled to attend and vote at the AGM is entitled to appoint not more than two proxies to attend and vote on his behalf. A proxy need not be a member of the Company.
(ii)
The instrument appointing a proxy must be deposited at the registered office of the Company at 9 Temasek Boulevard #36-02 Suntec Tower Two Singapore 038989 not less than 48 hours before the time fixed for holding the AGM.
(iii)
Resolution 4b: Mr. Ng Ser Miang who is considered an independent director will, upon re-appointment as a Director of the Company, remain as Chairman of the Nominating Committee and member of the Risk Management Committee.
(iv)
Resolution 4c: Ms. Ng Shin Ein who is considered an independent director will, upon re-appointment as a Director of the Company, remain as Chairman of the Risk Management Committee, member of the Audit Committee and member of the Remuneration Committee.
(v)
Resolution 6, if passed, is to empower the Directors from the date of the AGM to be held on 29 April 2009 until the date of next AGM, to issue shares in 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 a number not exceeding (i) 100% of the total number of issued shares (excluding treasury shares) in the capital of the Company (calculated as described above) for Renounceable Rights Issues (“100% Renounceable Rights Issues”) and (ii) 50% of the total number of issued shares (excluding treasury shares) in the capital of the Company (calculated as described above) for Other Share Issues, with a sub-limit of 20% for issues other than on a pro-rata basis to shareholders, provided that the total number of shares which may be issued pursuant to (i) and (ii) shall not exceed 100% of the issued shares (excluding treasury shares) in the capital of the Company (calculated as described above). The authority for 100% Renounceable Rights Issues is one of the further measures introduced by Singapore Exchange Limited, in consultation with the Monetary Authority of Singapore and took effect on 20 February 2009 to accelerate and facilitate listed issuers’ fund raising efforts.
(vi)
Resolution 8, if passed, is to authorise the Directors to offer and grant options in accordance with the provisions of the ESOS 2006 and to allot and issue from time to time such number of shares in the capital of the Company as may be issued pursuant to the exercise of options under the ESOS 2006, provided that the aggregate number of shares to be issued pursuant to the ESOS 2006 shall not exceed 15% of the total number of issued shares excluding treasury shares in the capital of the Company from time to time.
121
YANLORDLAND 2008 ANNUAL REPORT
This page has been intentionally left blank.
Yanlord Land Group Limited
Important:
(Incorporated in the Republic of Singapore) Company Registration No. 200601911K
1.
For investors who have used their CPF monies to buy shares of Yanlord Land Group Limited, the Annual Report is forwarded to them at the request of their CPF Approved Nominees and is sent solely FOR INFORMATION ONLY.
PROXY FORM ANNUAL GENERAL MEETING
2.
This Proxy Form is not valid for use by CPF Investors and shall be ineffective for all intents and purposes if used or purported to be used by them.
I/We,
(Name)
of
(Address)
being a member/members of Yanlord Land Group Limited (the “Company” or “Yanlord”) hereby appoint:
Name
Address
NRIC / Passport Number
Proportion of Shareholdings No. of Shares
%
(a) and/or (delete as appropriate): (b) or failing him/her, the Chairman of the Meeting (defined below), as my/our proxy/proxies to attend and vote for me/us on my/our behalf and, if necessary, to demand a poll at the annual general meeting of the Company (“Meeting”) to be held at the Vanda Ballroom, Marina Mandarin Singapore, Level 5, 6 Raffles Boulevard, Marina Square, Singapore 039594 on Wednesday, 29 April 2009 at 2.00 p.m. and at any adjournment thereof. (Please indicate with an “X’’ in the space provided whether you wish your vote(s) to be cast for or against the resolution as set out in the Notice of the Meeting. In the absence of specific directions, the proxy will vote or abstain as the proxy deems fit). No. 1 2 3 4
5 6 7 8
Ordinary Resolutions
For
Against
ROUTINE BUSINESS Adoption of Reports and Accounts Declaration of Dividend Approval of Directors’ Fees (a) Re-election of Mr. Zhong Siliang as Director (b) Re-election of Mr. Ng Ser Miang as Director (c) Re-election of Ms. Ng Shin Ein as Director Re-appointment of Auditors SPECIAL BUSINESS Authority for Directors to issue shares and convertible securities Authority for Directors to issue new shares other than on a pro-rata basis at a discount of up to 20% to the weighted average price per share Authority for Directors to grant options and to issue shares under Yanlord Share Option Scheme 2006
Dated this
day of
2009.
Total Number of Shares Held
Signature(s) or Common Seal of Member(s) IMPORTANT: PLEASE READ NOTES ON THE REVERSE
Notes: 1.
Please insert the total number of shares held by you. If you have shares entered against your name in the Depository Register (as defined in Section 130A of the Companies Act, Cap 50), you should insert that number. If you have shares registered in your name in the Register of Members of the Company, you should insert that number. If you have shares entered against your name in the Depository Register and registered in your name in the Register of Members, you should insert the aggregate number. If no number is inserted, this form of proxy will be deemed to relate to all the shares held by you.
2.
A member entitled to attend and vote at the Meeting is entitled to appoint not more than two proxies to attend and vote on his behalf. A proxy need not be a member of the Company. Where a member appoints more than one proxy, the appointments shall be invalid unless he specifies the proportion of his holding (expressed as a percentage of the whole) to be represented by each proxy.
3.
The instrument appointing a proxy or proxies shall, in the case of an individual, be signed by the appointor or of his attorney duly authorised in writing. Where the instrument appointing a proxy or proxies is executed by a corporation, it must be executed either under its common seal or signed on its behalf by an attorney or a duly authorised officer of the corporation.
4.
Where an instrument appointing a proxy is signed on behalf of the appointor by an attorney, the letter or power of attorney or a duly certified copy thereof must (failing previous registration with the Company) be lodged with the instrument of proxy, failing which the instrument may be treated as invalid.
5.
A corporation which is a member may authorise by resolution of its directors or other governing body such person as it thinks fit to act as its representative at the Meeting, in accordance with Section 179 of the Companies Act, Cap 50.
6.
The Company shall be entitled to reject an instrument appointing a proxy/proxies which is incomplete, improperly completed, illegible or where the true intentions of the appointor is not ascertainable from the instructions of the appointor contained in the instrument of proxy. In addition, in the case of shares entered in the Depository Register, the Company may reject an instrument of proxy if the member, being the appointor, is not shown to have shares entered against his name in the Depository Register as at 48 hours before the time fixed for holding the Meeting, as certified by The Central Depository (Pte) Limited to the Company.
7.
The instrument appointing a proxy or proxies must be deposited at the Company’s registered office at 9 Temasek Boulevard #36-02 Suntec Tower Two, Singapore 038989 not less than 48 hours before the time fixed for the Meeting.
PROXY FORM Affix Stamp Here
The Company Secretary
YANLORD LAND GROUP LIMITED 9 Temasek Boulevard #36-02 Suntec Tower Two Singapore 038989
Corporate
Information
BOARD OF DIRECTORS Zhong Sheng Jian, Chairman and Chief Executive Officer Zhong Siliang, Executive Director Chan Yiu Ling, Executive Director Hong Zhi Hua, Executive Director Ronald Seah Lim Siang, Lead Independent Director Ng Ser Miang, Independent Director Ng Shin Ein, Independent Director Ng Jui Ping, Independent Director AUDIT COMMITTEE Ronald Seah Lim Siang, Chairman Ng Shin Ein Ng Jui Ping NOMINATING COMMITTEE Ng Ser Miang, Chairman Ronald Seah Lim Siang Zhong Sheng Jian REMUNERATION COMMITTEE Ng Jui Ping, Chairman Ronald Seah Lim Siang Ng Shin Ein RISK MANAGEMENT COMMITTEE Ng Shin Ein, Chairman Ng Ser Miang Ng Jui Ping Zhong Sheng Jian
GROUP GENERAL COUNSEL / COMPANY SECRETARY Tan Shook Yng GROUP FINANCIAL CONTROLLER Jim Chan Chi Wai HEAD, FINANCIAL MANAGEMENT AND COMMUNICATIONS John Low HEAD, INVESTOR RELATIONS Michelle Sze Ka Ping REGISTERED OFFICE 9 Temasek Boulevard #36-02 Suntec Tower Two Singapore 038989 Tel: (65) 6336 2922 Fax: (65) 6238 6256 Registration No.: 200601911K WEBSITE http://www.yanlordland.com AUDITORS Deloitte & Touche LLP 6 Shenton Way #32-00 DBS Building Tower Two Singapore 068809 Partner-in-charge: Wong-Yeo Siew Eng (Appointed on April 29, 2008)
SHARE REGISTRAR AND TRANSFER OFFICE Boardroom Corporate & Advisory Services Pte. Ltd. 3 Church Street #08-01 Samsung Hub Singapore 049483 (Appointed on March 7, 2006) PRINCIPAL BANKERS Bank of Shanghai DBS Bank Ltd Industrial and Commercial Bank of China The Hongkong and Shanghai Banking Corporation Ltd The Royal Bank of Scotland STOCK EXCHANGE LISTING Singapore Exchange Securities Trading Limited DATE AND COUNTRY OF INCORPORATION 13 February 2006, Singapore
Y NLORD L NDM RK V
V V
SHARING A GLOBAL VISION
仁恒置地廣場
购物中心/写字楼/服务式公寓
与世界同分享 Ideally situated in the heart of Chengdu’s central business district, Yanlord Landmark is the latest and brightest addition to this hub of western China. An integrated development comprising premier shopping podiums, Grade A office suites and quality serviced apartments, Yanlord Landmark continues to be the development of choice for leading multi-national corporations, domestic enterprises and international designer brands to base their regional operations. Building on a commitment to “Maintaining International Standards” Yanlord Landmark continues to form a conduit that connects Chengdu with the rest of the world 仁恒置地广场，成都CBD核心城市建筑综合体，汇集国际品牌购物中心、甲级写字楼、酒店服务式公寓三种高端物业形态，以“国际视野、世界标准” 打造国际品牌、跨国公司、中外知名企业区域发展总部，成就中国西部“总部经济基地”。让世界与成都交汇，分享全球精彩。 仁恒置地集团 YANLORD LAND GROUP 新加坡上市公司（股票代码Z25）
项目地址: 中国成都人民南路二段1号 开发商：仁恒置地（成都）有限公司 Add:No 1, Section 2, Renmin South Road, Chengdu, China
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