ANNUAL REPORT 2012uic.com.sg/system/misc/ar2012.pdf · 2014-12-15 · UNITED INDUSTRIAL CORPORATION LIMITED ANNUAL REPORT 2012 2012 Review The Singapore economy grew by 1.3% in 2012,

ANNUAL REPORT

2012

UNITED INDUSTRIAL CORPORATION LIMITED

Contents

1 Group Financial Highlights

2 Chairman’s Statement

5 Board of Directors

9 Corporate Governance Report

19 Corporate Data

20 Management Review

30 Human Resource

31 Property Activities Summary

33 Financial Report

104 Five Year Summary

106 Statistics of Shareholdings

108 Notice of Annual General Meeting

Proxy Form

UNITED INDUSTRIAL CORPORATION LIMITED ANNUAL REPORT 2012

747

1,0321,194

806

711

Group Financial Highlights

REVENUE ($’million)

2008 2009 2010 2011 2012

ATTRIBUTABLE (LOSS)/PROFIT ($’million)

TOTAL ASSETS ($’million)

6,429

7,245

7,607

7,1097,018

SHAREHOLDERS’ EQUITY ($’million)

2008 2009 2010 2011 2012

($’million) 2008 2009 2010 2011 2012

(restated) (restated) (restated) (restated)

Revenue 747 1,032 1,194 806 711

Net profi t from operations 149 252 278 200 168

Net fair value (loss)/gain on

investment properties (320) (484) 559 (5) 223

Attributable (loss)/profi t (171) (232) 837 195 392

Total assets 7,109 6,429 7,018 7,245 7,607

Shareholders' equity 3,533 3,290 4,106 4,308 4,684

Certain prior years’ fi gures have been restated following the adoption of Financial Reporting Standard 12 – Deferred Tax:

Recovery of Underlying Assets.

(232)

2008 2009

2010 2011 2012

(171)

837

195 392

3,5333,290

4,1064,308

4,684

2008 2009 2010 2011 2012

1


2012 Review

The Singapore economy grew by 1.3%

in 2012, below the Government’s

forecast of around 1.5%. The weak

US economy, eurozone crisis and

local labour crunch contributed to

the slower growth.

Despite the weak economy, the

offi ce rental market held up better

than expected, mainly supported

by demand from the non-fi nancial

sectors. For the residential market,

pent up demand, high liquidity and

low interest rates continued to push

up housing prices and sales volume,

making 2012 a record year.

Performance Review and Dividend

For the fi nancial year 2012,

the Group achieved revenue

amounting to $711.5 million,

a decrease of 12% compared to

$805.5 million in 2011. Lower revenue

from hotel operations due to the closure

of Pan Pacifi c Singapore Hotel for

renovation works, lower contribution

from sales of trading properties due

to completion of certain residential

projects and lower rental incomes

due to redevelopment of UIC Building

were contributory factors.

During the year, revenue from hotel

operations was $86.1 million, down

39% due to Pan Pacifi c Singapore

closing for four months from April

2012 for renovation.

Sales of trading properties decreased

by $15.8 million (6%) to $271.6 million

following the completion of The Trizon

in May 2012 and Park Natura in

May 2011.

Gross rental income from offi ce

buildings in 2012 was affected by

the absence of contribution from UIC

Building which was vacated by end

2011. Consequently rental declined

to $270.8 million, 6% lower than the

$287.5 million achieved in 2011.

With the lower revenue, the Group’s

operating profi t during the fi nancial

year declined by $32.0 million (16%)

to $168.2 million.

Chairman’s Statement

2


However, with the inclusion of $223.3

million (2011: $4.9 million in fair value

loss) in fair value gain on investment

properties which registered a 5%

increase in capital values, the Group’s

overall net profi t improved to $391.6

million (2011: $195.4 million).

Following the adoption on 1 January

2012 of amendments to Financial

Reporting Standard 12, the Group’s

deferred income tax provision of

$487.7 million as at 31 December

2011 became unnecessary and

was written back retrospectively.

The Group’s 2011 net profi t was

correspondingly adjusted to $195.4

million, a restatement of the $214.2

million profi t reported previously.

As at end December 2012, the

Group’s net asset value stood at

$3.40 per share (2011: $3.13).

The Board recommends a fi rst and

fi nal tax-exempt (one-tier) dividend

of 3.0 cents (2011: 3.0 cents).

The payout amounts to $41.3 million

(2011: $41.3 million) for the fi nancial

year ended 31 December 2012.

Singapore Offi ce and

Retail Properties, Hotels

During the year under review, the

Group’s offi ce buildings registered an

improvement in average occupancy

by two percentage points to 98%

in spite of strong competition from

newly completed buildings within the

Raffl es Place/Marina Bayfront new

fi nancial district.

At the former UIC Building, demolition

and development work have started

and TOP is expected in 2017. The

iconic development, comprising a

23-storey prime Grade A offi ce tower

and a 54-storey residential tower

called V on Shenton is designed

by world renowned UN Studio in

collaboration with local architectural

fi rm, Architects 61. The sale of the

510 apartments was launched in July

2012 and as at end of December,

60% has been sold.

The Marina Square shopping

mall, with its diverse selection of

entertainment, retail and dining

continued to be a strong draw for

local and foreign visitors. The Mall won

the “Best Retail Event 2012” award

from the Singapore Retailers

Association for its innovative

3-Dimensional Balloon Sculpture.

Two of the Marina Square hotels,

Marina Mandarin Singapore and

Mandarin Oriental Singapore were

able to maintain good occupancies

and rate growth on the back of the

strong infl ux of visitors. The Pan

Pacifi c Singapore underwent a multi-

million dollar renovation and was

re-opened in September 2012. With

a revitalised lobby, more luxurious

guest rooms and haute dining

restaurants, the Pan Pacifi c Singapore

will reposition itself as a premier hotel

of choice for discerning business and

leisure guests in the Marina Bay hub.

Singapore Residential Projects

The Group secured three prime

residential sites through public

tenders in 2012. The sites are in

popular residential enclaves at

Jervois Road, Farrer Drive as well

as Alexandra Road, and close to

the city centre. In addition, a site at

Bright Hill Drive, off Upper Thomson

was acquired together with UOL

Group on a 50:50 joint venture basis.

This site is close to a designated MRT

station. All four sites are expected

to be launched for sale in 2013.

The Group has successfully sold all

the 553 apartments and 24 strata

houses in Archipelago, a 50:50 joint

venture project with UOL Group.

Located at Bedok Reservoir Road

and close to Bedok Reservoir,

TOP is expected to be obtained

in 2016.

The Certificate of Statutory

Completion for The Trizon, our

freehold condominium in the Mount

Sinai area, was obtained in November

2012. The project was 94% sold as

at the end of January 2013.

Overseas Investments

The Group’s wholly-owned project

in Chengdu, The Excellency, was

completed in June 2012. The

development comprising two 51-storey

residential blocks and 3,300 square

metres of retail/commercial space is

located close to the Chun Xi shopping

belt. As at end December 2012, 74%

of the development had been sold.

3


The Westin Tianjin Hotel, in which the

Group holds a 51% stake, has built

a good reputation among business

travellers and won numerous

accolades. During the year, it achieved

average occupancy of 68%.

In Shanghai, Singland China Holdings

Pte. Ltd. (a subsidiary of the Group),

UOL Capital Investments Pte Ltd

(a subsidary of UOL Group Limited)

and Peak Star Pte. Ltd. (a subsidary

of Kheng Leong Company (Private)

Limited) with shareholdings of 30%,

40% and 30% respectively are jointly

developing the Shanghai Chang

Feng project. Construction of the

proposed mixed-used residential

and retail project covering 39,540

square metres with 70 years tenure is

expected to commence in the second

quarter of 2013. The development will

feature high rise apartments and low

rise townhouses.

Technology Business

UIC Technologies Group saw a 9%

decrease in revenue to $73.4 million

during the year compared to $80.6

million achieved in 2011. Pre-tax

profi t was $1.9 million, a decrease

of 31% compared to $2.8 million in

2011. The lower turnover and profi t

were caused by business slowdown

in 2012 resulting in slower rollout of IT

projects and hardware refresh in the

corporate sector as well as decrease

in IT procurement in the public sector.

Outlook for 2013

With Singapore’s GDP growth for

2013 forecast at between 1% and

3%, in view of the weak global

economic outlook, the year ahead

is likely to be a challenging one for

the commercial and residential

property market.

In January 2013, the Government

introduced the strongest cooling

measures to date to curb rising

residential property prices. These

measures would affect affordability

and reduce transaction volume.

However price correction may be

moderated by low interest rates and

high employment.

With the cautious outlook over the

global economy and high operating

costs faced by retailers due to the tight

labour market, the retail rental market is

expected to face some pressure. In the

hotel sector, visitor arrivals will grow at

a slower pace and increased operating

costs caused by the labour crunch will

remain a signifi cant challenge.

Acknowledgement

On behalf of the Board, I would like

to thank our shareholders, business

partners, customers, tenants,

management and staff for your

unstinting support.

The Board would like to thank Mr Alvin

Yeo for serving as interim Chairman of

the Audit Committee. Mr Yang Soo

Suan, an Independent Director, was

appointed as the Chairman of the

Audit Committee on 2 January 2013.

In conclusion, I thank all my fellow

directors for your wise counsel in

the past year.

WEE CHO YAW

Chairman

February 2013

Chairman’s Statement

4


Wee Cho Yaw

Chairman

Dr Wee Cho Yaw was appointed

a Director and Chairman of United

Industrial Corporation Limited (“UIC”)

in 1992. He has more than 50

years of experience in the banking

industry. He is the Chairman of United

Overseas Bank Limited, Far Eastern

Bank Ltd, United Overseas Insurance

Ltd, United International Securities

Ltd, UOL Group Limited, Haw Par

Corporation Limited, Pan Pacifi c

Hotels Group Limited, Singapore

Land Limited and Marina Centre

Holdings Private Limited. He is also

the Chairman of the Wee Foundation.

Dr Wee received Chinese high

school education. He is the Honorary

President of the Singapore Federation

of Chinese Clan Associations,

Singapore Chinese Chamber of

Commerce and Industry and

Board of Directors

John Gokongwei, Jr.

Deputy Chairman

Dr John Gokongwei, Jr. was

appointed a Director and Deputy

Chairman of UIC in 1999. As of

January 2002, he is the Chairman

Emeritus of JG Summit Holdings,

Inc., a company incorporated in

the Philippines and listed on the

Philippines Stock Exchange Inc.,

since its formation in 1990. He is

also a Director and Deputy Chairman

of Singapore Land Limited, Director

of Marina Centre Holdings Private

Limited, Universal Robina Corporation,

Robinsons Land Corporation, Oriental

Petroleum and Minerals Corporation

and Anscor Phils.

Dr Gokongwei received a Master in

Business Administration from the

De la Salle University in the

Philippines, and attended the

Advanced Management Program

at Harvard University, Boston,

Massachusetts, USA.

Singapore Hokkien Huay Kuan.

He was appointed Pro-Chancellor of

Nanyang Technological University in

2004 and was conferred Honorary

Doctor of Letters by the National

University of Singapore in 2008.

Dr Wee was conferred the

Businessman Of The Year award

twice at the Singapore Business

Awards in 2001 and 1990. In

2006, he received the inaugural

Credit Suisse-Ernst & Young

Lifetime Achievement Award for his

outstanding achievements in the

Singapore business community.

In 2009, he was conferred the

Lifetime Achievement Award by

The Asian Banker.

In 2011, Dr Wee was awarded the

Distinguished Service Order, the

highest National Day award, by the

Government for his contributions

towards the community and education

in Singapore.

5


Board of Directors

James L. Go

Mr James L. Go was appointed

a Director of UIC in 1999. He is

the Chairman and Chief Executive

Offi cer of JG Summit Holdings,

Inc., Robinsons, Inc. and Oriental

Petroleum and Minerals Corporation.

He is the Chairman of Universal

Robina Corporation, Robinsons Land

Corporation and JG Summit

Petrochemical Corporation. He is

also the President and a Trustee of

the Gokongwei Brothers Foundation,

Inc. He also sits as a director of

Cebu Air, Inc., Singapore Land

Limited, Marina Centre Holdings

Private Limited and Hotel Marina

City Private Limited. He was elected

as a director of the Philippine Long

Distance Telephone Company

(PLDT) on November 3, 2011 and

was appointed a member of PLDT’s

Technology Strategy Committee.

Mr Go graduated with a Bachelor

of Science and Master of

Science, Chemical Engineering

from Massachusetts Institute of

Technology, USA.

Lim Hock San

President and CEO

Mr Lim Hock San, the President and

Chief Executive Offi cer, was appointed

a Director of UIC in 1992. Mr Lim is

also the President and Chief Executive

Offi cer of Singapore Land Limited and

the Chairman of the National Council

On Problem Gambling.

Mr Lim graduated with a Bachelor

of Accountancy from the University

of Singapore. He obtained a

Master of Science in Management

from the Massachusetts Institute

of Technology, and attended the

Advanced Management Program

at Harvard Business School. He is

a Fellow of the Chartered Institute

of Management Accountants (UK)

and a Fellow and past President

of the Institute of Certifi ed Public

Accountants of Singapore.

Gwee Lian Kheng

Mr Gwee Lian Kheng was appointed

a Director of UIC in 1999. He is the

Group Chief Executive of UOL and its

listed subsidiary Pan Pacifi c Hotels

Group Limited. Mr Gwee has been

with the UOL Group since 1973.

He also sits on the board of Singapore

Land Limited.

Mr Gwee graduated with a Bachelor

degree in Accountancy (Honours)

from the University of Singapore.

He is a Fellow Member of the

Chartered Institute of Management

Accountants, Association of

Chartered Certifi ed Accountants

and the Institute of Certifi ed Public

Accountants of Singapore.

6


Hwang Soo Jin

Mr Hwang Soo Jin was appointed

a Director of UIC in January 2003

and is currently the Chairman of

the Nominating Committee. He is

a Chartered Insurer qualifi ed in the

United Kingdom, and has more than

50 years’ business experience.

Mr Hwang is currently the Chairman

Emeritus and Director of Singapore

Reinsurance Corporation Ltd and

also sits on the boards of directors of

United Overseas Insurance Ltd, Haw

Par Corporation Ltd and Singapore

Land Limited, among others. He is

the former Chairman of Singapore

Reinsurance Corporation Ltd.

Mr Hwang is an Associate of

the Chartered Insurance Institute,

United Kingdom.

Alvin Yeo Khirn Hai

Mr Alvin Yeo Khirn Hai was

appointed a Director of UIC in 2002

and is currently the Chairman of the

Remuneration Committee. He is a

lawyer in private practice and the

Senior Partner of WongPartnership

LLP. Mr Yeo was appointed Senior

Counsel of the Supreme Court of

Singapore in January 2000. He is the

Chairman of the Audit Committee of

the Law Society of Singapore, and a

member of the Appeals Advisory Panel

of the Monetary Authority of Singapore,

the Singapore International Arbitration

Centre’s Council of Advisors, and

a Fellow of the Singapore Institute of

Arbitrators. He is also a Director of

Singapore Land Limited and Keppel

Corporation Ltd. Mr Yeo is a Member

of Parliament.

Mr Yeo graduated with a Bachelor

of Laws (Honours) from King’s

College, University of London, and is

a Barrister-at-Law (Gray’s Inn).

Yang Soo Suan

Mr Yang Soo Suan was appointed

a Director of UIC on 27 April 2012

and is currently the Chairman of the

Audit Committee. He is an architect by

training and has more than 48 years of

professional practice experience.

He is a Director of United Overseas

Insurance Limited and United

International Securities Ltd. He is a

Life Fellow of the Singapore Institute

of Architects, a Fellow Member of the

Singapore Society of Project Managers,

and a member of the Singapore

Institute of Directors. He is the former

Chairman of Architects 61 Pte Ltd

and National Fire Prevention Council.

He is also the former board member of

the Housing and Development Board

and the Board of Architects, a former

President of the Singapore Institute of

Architects and currently a member of

the Appeals Board (Land Acquisition).

Mr Yang holds a Bachelor of

Architecture (Honours) in Design,

Town Planning and Building (1961)

from Melbourne University, Australia

and was awarded the Bintang Bakti

Masyarakat (Public Service Star,

Singapore) in 1996.

7


Antonio L. Go

Mr Antonio L. Go was appointed

a Director of UIC in April 2007.

He is currently a Director and President

of Equitable Computer Services, Inc.

and Chairman of Equicom Savings

Bank and Algo Leasing and Finance

Inc. He is a Trustee of Go Kim Pah

Foundation and Equitable Foundation

Inc. He sits on the boards of Cebu Air,

Inc., Maxicare Healthcare Corporation,

Oriental Petroleum and Minerals

Corporation, Equicom Information

Technology, Equicom Manila Holdings,

Medilink Network, Inc. and Equitable

Development Corporation. From year

2006-2011, he was an Independent

Director of Digital Telecommunications,

Philippines, Inc.

Mr Go graduated with a Bachelor

of Business Administration from

Youngstown University, USA. He

also attended the International

Advanced Management programme

at the International Management

Institute, Geneva, Switzerland, and

the ABA National School of

Bankcard Management, Northwestern

University, USA.

Lance Y. Gokongwei

Mr Lance Y. Gokongwei was

appointed a Director of UIC in

1999. He is the President and Chief

Operating Offi cer and a Director of

JG Summit Holdings, Inc., Universal

Robina Corporation and JG Summit

Petrochemical Corporation. He is also

the Vice Chairman and Deputy Chief

Executive Offi cer of Robinsons Land

Corporation. He is the President

and Chief Executive Offi cer of Cebu

Air, Inc. He is also the Chairman of

Robinsons Bank, Vice Chairman of JG

Summit Capital Markets Corporation

and a Director of Oriental Petroleum

and Minerals Corporation and

Singapore Land Limited. He is also

a trustee, secretary and treasurer of

the Gokongwei Brothers Foundation,

Inc. He served as a Director of Digital

Telecommunications Phils. Inc. from

May 1994 up to October 2011.

Mr Gokongwei graduated with a

Bachelor of Science (Applied Science)

from Pennsylvania Engineering School

and a Bachelor of Science (Finance)

from Wharton School, USA.

He also attended the management

and technology program at the

University of Pennsylvania.

Board of Directors

Wee Ee Lim

Mr Wee Ee Lim was appointed

a Director of UIC in 1999. He is

presently the President and Chief

Executive Offi cer of Haw Par

Corporation Limited. In addition,

he sits on the board of directors

of Singapore Land Limited as

well as UOL Group Limited, Pan

Pacifi c Hotels Group Limited, Hua

Han Bio-Pharmaceutical Holdings

Limited (a company listed on the

Hong Kong Stock Exchange) and

Wee Foundation.

Mr Wee graduated with a Bachelor

of Arts (Economics) from Clark

University, USA.

8


Corporate Governance Report

The Company is committed to maintaining high standards of corporate governance and this report outlines the

Company’s corporate governance practices with reference to the principles and guidelines of the Singapore Code of

Corporate Governance (“Code”).

Board Matters

Board’s Conduct of its Affairs

The principal functions of the Board are to: (a) provide

entrepreneurial leadership, set strategic objectives and

commitments, review recommendations of the Nominating

Committee (“NC”), Remuneration Committee (”RC”) and

Audit Committee (“AC”) and ensure that the necessary

fi nancial and human resources are in place for the Company

to meet its objectives; (b) establish a framework of prudent

and effective controls which enables risk to be assessed

and managed, including safeguarding of shareholders’

interest and the Company’s assets; (c) review the business

results of the Company and monitor the performance

of Management; (d) identify the key stakeholder

groups and recognize that their perceptions affect the

Company’s reputation; (e) set the Company’s values and

standards (including ethical standards), and ensure that

obligations to shareholders and other stakeholders are

understood and met; (f) consider the sustainability issues,

e.g. environmental and social factors, as part of its

strategic formulation, and (g) assume responsibility for

corporate governance.

The Board delegates certain functions to the NC,

RC and AC. Each committee has its own written terms

of reference.

The Board meets on a quarterly basis and as and when

warranted by circumstances. Telephonic conferences at

Board meetings are permitted by the Company’s Articles

of Association (“Articles”). The number of Board and

Board Committee meetings held in 2012, as well as the

attendance of each Board member at these meetings, are

disclosed below:

Name

Attendance at 4

Board Meetings

Attendance at 4

Audit Committee

Meetings

Attendance at

2 Nominating

Committee

Meetings

Attendance at 2

Remuneration

Committee

Meetings

Wee Cho Yaw 4 n/a 2 2

John Gokongwei, Jr. 4 n/a n/a n/a

Lim Hock San 4 n/a n/a n/a

James L. Go 4 4 2 2

Lance Y. Gokongwei 4 n/a n/a n/a

Gwee Lian Kheng 4 n/a n/a n/a

Hwang Soo Jin 4 3 2 2

Antonio L. Go 4 n/a 2 2

Tan Boon Teik * 1 1 1 n/a

Wee Ee Lim 4 n/a n/a n/a

Alvin Yeo Khirn Hai ** 2 3 n/a 1

Yang Soo Suan *** 2 2 1 n/a

* Tan Boon Teik passed away on 10 March 2012

** Alvin Yeo appointed as Chairman of AC from 19 March 2012 to 1 January 2013

*** Yang Soo Suan appointed as Director, member of AC and NC on 27 April 2012 and Chairman of AC on 2 January 2013

9


The Company has adopted internal guidelines

and fi nancial authority limits structure setting forth

matters that require Board approval. Under the

guidelines, Board approval is required for material

commitments and payments of operating and

capital expenditure.

A formal letter setting out the Director’s duties and

obligations is provided to each Director upon his

appointment. The Company funds training programmes

for the Directors, and has an orientation programme

for incoming Directors to familiarize them with the

Company’s business and governance practices.

Board’s Composition And Guidance The Board comprises eleven Directors, of whom

four, namely, M/s Hwang Soo Jin, Antonio L. Go,

Alvin Yeo Khirn Hai and Yang Soo Suan (appointed on

27 April 2012) are considered independent directors.

The independence of each Director is reviewed annually

by the NC. Following the NC’s review, the Board is of

the view that the independent directors make up at least

one-third of the Board and that the current Board size

is appropriate, taking into account the nature and scope

of the Company’s operations. No individual or small

group of individuals dominates the Board’s decision-

making process.

The Board consists of high calibre members with

a wealth of knowledge, expertise and experience.

As a group, the Directors contribute valuable direction

and insight, drawing from their vast experience in matters

relating to accounting, fi nance, legal, banking, business,

management, property and general corporate matters.

Brief description on the background of each Director

is set out in the “Board of Directors” section of this

Annual Report.

Chairman And Chief Executive Offi cer To ensure an appropriate balance of power, increased

accountability and a greater capacity of the Board for

independent decision-making, the Company has a

clear division of responsibilities at the top management

level. Such division of responsibilities is established and


agreed by the Board. The non-executive Chairman and

the CEO have separate roles and they are not related

to each other. The Chairman’s responsibilities include:

(a) leading the Board; (b) setting the agenda and ensuring

that adequate time is available for discussion of all

agenda items, in particular strategic issues; (c) promoting

a culture of openness and debate at the Board; (d) ensuring

that the Directors receive complete, accurate and timely

information; (e) ensuring effective communication with

shareholders; (f) encouraging constructive relations within

the Board and between the Board and Management;

(g) facilitating the effective contribution of non-executive

Directors in particular; and, (h) promoting high standards

of corporate governance.

Board Membership

Nominating Committee

The NC comprises fi ve Directors, namely, M/s Hwang Soo

Jin (Chairman), Wee Cho Yaw, James L. Go, Antonio L. Go

and Yang Soo Suan (appointed on 27 April 2012), of whom

three, including the Chairman are independent.

The main Terms of Reference of the NC are: (a) reviewing

the Board’s succession plans for Directors, in particular,

the Chairman and CEO; (b) developing the process for

the evaluation of the performance of the Board, its Board

Committees and Directors; (c) reviewing the training and

professional development programmes for the Board;

(d) recommending all new Board appointments and

re-appointments to the Board; (e) reviewing skills

required by the Board; (f) reviewing the size of the Board;

(g) determining annually the independence of each

Director, and ensuring that independent directors

form one-third of the Board; (h) deciding whether

a Director with multiple Board representations is able

to and has been adequately carrying out his duties

as a Director; (i) deciding how the performance of the

Board, its Committees and Directors may be evaluated

and proposing objective performance criteria to assess

the effectiveness of the Board and Board Committees

as a whole and the contribution of each Director; and

(j) carrying out annual assessment of the effectiveness of

the Board, its Board Committees and individual Directors.

10


In the nomination and selection process for a new Director,

the NC identifi es key attributes of an incoming Director

based on the requirements of the Group and recommends

to the Board the appointment of the new Director. The

NC conducts a yearly review of the re-appointment of

Directors. The Directors submit themselves for re-election

on regular intervals of at least once every three years in

accordance with the Articles. In its deliberations on the

re-appointment of existing Directors, the NC takes into

consideration the Director’s contribution and performance.

Directors are given opportunities to attend courses and

talks on corporate governance and other matters relevant

to the business of the Company.

The external auditor would brief the AC members

of changes to the accounting standards and of

issues which have a direct impact on fi nancial statements.

The NC is also responsible for determining annually,

the independence of Directors. The NC assessed

M/s Hwang Soo Jin, Antonio L. Go, Alvin Yeo Khirn Hai

and Yang Soo Suan to be independent directors as they

have acted independently and objectively at all times

in the interest of the Company and its shareholders.

The NC scrutinised in particular the independence of

Mr Alvin Yeo Khirn Hai (11 years) and Mr Hwang Soo Jin

(10 years) who have served more than nine years each. The

NC is satisfi ed that their long service has not compromised

their ability to exercise independent business judgement.

The NC further noted that Mr Alvin Yeo Khirn Hai is

a partner of WongPartnership LLP, which has provided

legal services to the Company and its subsidiaries for the

year 2012, for total fees of below $200,000. The NC was

informed that Mr Yeo was not involved in providing the

legal services and did not involve himself in the selection

or appointment of legal counsel by the Company.

The NC considered the multiple board representations

of the Directors and is satisfi ed that notwithstanding

their multiple directorships, each Director has been able

to commit time and effort to the affairs of the Company.

A Director who is unable to attend meetings in person

may give his views, if any, in writing to the Chairman of the

Board and/or Board Committee.

The Board is of the view, that as different companies

have different complexities and directors have different

capabilities, it is best to leave each Director to evaluate

his own ability to commit time to the Company. For this

reason, the Board has not prescribed the maximum

number of directorships a Director may hold.

The information on independent, executive and

non-executive Directors, including the year of initial

appointment, last re-election and membership on Board

Committees is set out in the section of this Annual Report

entitled “Corporate Data”.

As alternate directors should be appointed only in

exceptional cases and for limited periods only, Mr Patrick

O. Ng (alternate director to Mr Lance Y. Gokongwei)

and Mr Frederick D. Go (alternate director to Dr John

Gokongwei, Jr.) have relinquished their roles with effect

from 7 November 2012.

Board PerformanceWith the Board’s approval, the NC has adopted objective

performance criteria for assessing the effectiveness of the

Board as a whole, the Board Committees and individual

directors. In evaluating the Board’s performance as

a whole, the NC has adopted the quantitative indicators

which include, return on equity, return on assets, economic

value added, the Company’s share price performance over

a fi ve year period vis-à-vis the Singapore Straits Times Index

and a benchmark index of industry peers. In addition, the

NC also takes into consideration the qualitative criteria of

the effectiveness of the Board in monitoring Management’s

performance and the success of Management in achieving

strategic and budgetary objectives set by the Board.

As part of the yearly assessment of contribution of each

Director to the effectiveness of the Board, the Chairmen

of the NC and the Board would assess whether each

Director has contributed effectively and discharged their

duties responsibly. The Board would then be informed of

the results of the performance evaluation. The individual

11



Director’s performance criteria is in relation to their industry

knowledge and/or functional expertise, contribution and

workload requirements, sense of independence and

attendance at the Board and Board Committee meetings.

A formal assessment of the effectiveness of the Board as

a whole and the contribution by each individual Director

to the effectiveness of the Board was duly carried out this

year on the above basis.

Access To Information To enable the Board to fulfi l its responsibilities, Directors are

provided with complete, adequate and timely information

prior to Board and Board Committee meetings and on

an on-going basis.

Management provides Directors with monthly management

accounts. The Company Secretary attends all Board and

Board Committee meetings and ensures good information

fl ow within the Board and its Committees and between

senior Management and non-executive Directors.

The Directors have separate and independent access to

the Company Secretary and senior Management.

The Board takes independent professional advice as and

when necessary to enable it to discharge its responsibilities

effectively. Subject to the approval of the Chairman, the

Directors may seek and obtain separate and independent

professional advice to assist them in their duties.

Procedures For Developing Remuneration Policies

Remuneration Committee

There is a formal and transparent procedure for

developing policies on executive remuneration and for

fi xing the remuneration packages of individual Directors.

The members of the RC are M/s. Alvin Yeo Khirn Hai

(Chairman), Wee Cho Yaw, James L. Go, Hwang Soo Jin

and Antonio L. Go. The RC is made up of non-executive

Directors, the majority of whom, including the Chairman

are independent.

The RC’s main Terms of Reference are: (a) reviewing the

existing benefi t and remuneration systems, including

the Performance or Variable Bonus Schemes and the

Executive Share Option Scheme (“ESOS”) of United

Industrial Corporation Limited (“UIC”) [applicable to the

Company and its Group] and proposing any amendment/

update, where appropriate, to the Board for approval;

(b) approving the remuneration packages of the CEO

and senior Management of the Group; (c) administering

the UIC ESOS, which was approved and extended

by shareholders on 18 May 2001 and 27 April 2011

respectively, including approving allocations of options

to qualifying executives including executive Directors

of the Company; and (d) recommending appropriate

fees for Directors taking into account their services

and contributions on the various Board Committees;

(e) reviewing the Company’s obligations arising in the event

of termination of executive director and key management

personnel’s contract of service to ensure that the contracts

of service contain fair and reasonable termination clauses

that are not overly generous.

For consideration on the appropriate remuneration for

its Directors and key management personnel, the RC

is guided by Key Performance Indicators (“KPIs”) of the

Company which, includes profi tability and return on

equity. The President’s/CEO’s remuneration is decided

by the RC and the President/CEO is not present in

the discussion.

Level And Mix Of Remuneration In determining the remuneration of Directors and Senior

Management, the RC will take into account the Company’s

performance and the performance of Directors and Senior

Management. The Board, with the RC’s input, periodically

reviews the Company’s remuneration policy to ensure that

it is in line with market practices and that the level and

structure of remuneration is aligned with the long-term

interest of the Company and is appropriate to attract, retain

and motivate Directors and key management personnel.

No member of the RC or any Director is involved in the

deliberations in respect of any remuneration, compensation,

options or any form of benefi ts to be granted to him.

12


The Company’s remuneration packages for its key

executives including the executive Director of the Company

include share options granted under the UIC Share

Option Scheme. Details of the share options granted to

executives of the UIC Group under the ESOS are set out

in the Directors’ Report section of this Annual Report, and

can also be found on the website www.uic.com.sg. The

non-executive Directors’ remuneration consist of directors’

fees and where applicable, additional fees for serving on

Board Committees.

To align remuneration with the Company’s performance

and long term interest, the share options granted by the

Company are exercisable in accordance with the vesting

schedule. In the event of a participant’s misconduct, the

RC may treat the options as lapsed and null and void.

There are no special service contracts offered by

the Company.

Remuneration of Directors For The Year Ended 31 December 2012 is as follows:

Remuneration Band

and Name of Director

Base/

Fixed Salary

Variable or

Performance-

Related

Income/

Bonuses Directors Fees

Share Options

Granted,

Allowances and

Other Benefi ts

$1,000,000 - $1,250,000

Lim Hock San 54% 34% n/a 12%

Below $250,000

Wee Cho Yaw n/a n/a 100% n/a

John Gokongwei, Jr. n/a n/a 100% n/a

James L. Go n/a n/a 100% n/a

Lance Y. Gokongwei n/a n/a 100% n/a

Gwee Lian Kheng n/a n/a 100% n/a

Hwang Soo Jin n/a n/a 100% n/a

Antonio L. Go n/a n/a 100% n/a

Tan Boon Teik * n/a n/a 100% n/a

Wee Ee Lim n/a n/a 100% n/a

Alvin Yeo Khirn Hai n/a n/a 100% n/a

Yang Soo Suan ** n/a n/a 100% n/a

* passed away on 10 March 2012

** appointed Director on 27 April 2012

13



Remuneration of Key Executives (who are not also Directors) For The Year Ended 31 December 2012 is as follows:

Remuneration Band

and Name of Key Executive

Base/

Fixed Salary

Variable or

Performance-

Related

Income/

Bonuses

Share Options

Granted,

Allowances and

Other Benefi ts

$500,000 - $750,000

Michael Ng Seng Tat 66% 21% 13%

$250,000 - $500,000

Loy Chee Chang 53% 13% 34%

Goh Poh Leng 52% 15% 33%

Lee Wah Poh 72% 19% 9%

Below $250,000

Susie Koh 59% 14% 27%

No employee of the Company and its subsidiaries was an immediate family member of a Director or the CEO and whose

remuneration exceeded $50,000 during the fi nancial year ended 31 December 2012.

Goh Poh Leng

(Senior General Manager, Marketing)

Ms Goh Poh Leng graduated with a Bachelor of Science

(Estate Management)(Honours) from the National University

of Singapore in 1990 and subsequently obtained her

Certifi ed Diploma in Accounting and Finance conducted

by The Association of Chartered Certifi ed Accountants,

UK. Prior to joining the Group, Ms Goh worked in an

international property consultancy fi rm for two years.

She joined in 1992 and held various positions until her

appointment as Senior General Manager, Marketing in

January 2010.

Susie Koh

(Company Secretary/Legal Manager)

Mrs Susie Koh obtained her LLB (Honours), University of

London in 1976 and Barrister-at-Law (Gray’s Inn) in 1979.

Mrs Koh was in private legal practice in Singapore as

an Advocate & Solicitor from 1985. She became an in-

house corporate lawyer and held the position of Company

Secretary/General Manager (Legal) in Scotts Holding

Ltd in 1991 until 1995 when she joined Sembawang

Corporation Ltd as Senior Vice President, Group Legal/

Information On Key Executives

Michael Ng Seng Tat

(Group General Manager)

Mr Michael Ng Seng Tat was Managing Director of Savills

Singapore before joining the Group in October 2010. His

other previous appointments were Managing Director of

Hamptons International; General Manager of the real estate

arm of COSCO Singapore where he handled investment

and development projects in Singapore and China; and

Associate Director of investment sales at Richard Ellis. He

was a member of the Strata Titles Board from 1999 to 2008.

He holds a Bachelor of Science (Estate Management)

Honours degree from National University of Singapore.

Mr Michael Ng is in charge of property investments and

development projects for the Group.

Loy Chee Chang

(Senior Financial Controller)

Mr Loy Chee Chang graduated from the National University

of Singapore in 1982 with a Bachelor of Accountancy

degree and worked in Pricewaterhouse, Singapore as an

auditor from 1982 to 1991. He joined UIC in 1991 as its

Financial Controller. He is the Senior Financial Controller of

both UIC and Singapore Land Limited.

14


Group Company Secretary. She was appointed Company

Secretary and Legal Manager for both UIC and Singapore

Land Limited in 2001. She is a member of the Singapore

Academy of Law.

Lee Wah Poh

(Managing Director of UIC Technologies Pte Ltd)

Ms Lee obtained her Bachelor of Technology with First

Class Honours in Chemistry and Control Engineering

and Master in Business Administration at the University

of Bradford, U.K. She worked as a Programmer/Analyst

with Hewlett Packard, Singapore from February 1981 to

October 1982.

She joined UIC Computer Systems Pte Ltd in November

1982 as an Assistant to the Managing Director and was

promoted to the post of Managing Director in July 1993.

Ms Lee resigned in 1998 and re-joined the UIC Group to

become the Managing Director of UIC Technologies Pte

Ltd in March 2000.

Accountability And Audit The Board provides shareholders with a balanced

and understandable assessment of the Company’s

performance, position and prospects on a quarterly basis

via quarterly announcements of results and other ad hoc

announcements as required by SGX-ST; and Management

provides Directors with the management accounts on a

monthly basis.

Audit Committee The AC comprises four non-executive Directors, namely,

M/s Yang Soo Suan (appointed member on 27 April 2012

and Chairman on 2 January 2013), Alvin Yeo Khirn Hai,

James L. Go and Hwang Soo Jin, the majority of whom,

including the Chairman, are independent.

The Terms of Reference of the AC are to: (a) review with

the external auditor the scope and results of the audit

report and its cost effectiveness; (b) review the signifi cant

fi nancial reporting issues and judgements made; (c)

review the adequacy the effectiveness of the Company’s

material internal controls and risk management; (d) the

effectiveness of the internal audit function; (e) review the

assistance given by the Company’s offi cers to the external

and internal auditors; (f) commission investigations

into and review fi ndings likely to have a material impact

on the Group’s operating results or fi nancial position;

(g) review interested person transactions; (h) meet with

the external and internal auditors annually without the

presence of the Management; (i) review the independence

of external auditors annually; and (j) decide and award

major tender contracts.

The AC has explicit authority to investigate any matter

within its Terms of Reference, full access to and co-

operation by Management and full discretion to invite

any Director or executive Director to attend its meetings,

and has reasonable resources to enable it to discharge

its functions properly. Management has put in place, with

the AC’s endorsement, arrangements by which staff of the

Group may, in confi dence, raise concerns about possible

improprieties in matters of fi nancial reporting or other

matters. A whistle-blowing policy was implemented in

February 2004.

During the year, the AC held four meetings.

The announcements of the quarterly and full year results,

and the fi nancial statements of the Group and the Auditor’s

Report thereon for the full year were reviewed by the

AC prior to consideration and approval of the Board.

The AC has met with the external and internal auditors,

without the presence of Management, at least once

during the year. For the fi nancial year 2012, the AC

undertook a review of the fees and expenses of the audit

and non-audit services provided by the external auditor,

PricewaterhouseCoopers LLP. For details of fees payable

in respect of audit and non-audit services, please refer to

Note 7 to the Financial Statements. It assessed whether

the nature and extent of the non-audit services might

prejudice the independence and objectivity of the auditor

before confi rming its re-nomination. The AC was satisfi ed

that such services did not affect the independence of

external auditor and that the external auditor has the

requisite resources and expertise to do their work.

The AC also reviewed the Company’s interested person

transactions and the cost-effectiveness of the audit

conducted by the external auditor.

15



The Company confi rms that Rules 712 and 715 of the

SGX-ST Listing Manual on the appointment of Auditors

have been complied with. Please refer to Note 34 to the

Financial Statements.

Internal ControlsThe Group maintains a sound system of internal controls

and risk management for ensuring proper accounting

records and reliable fi nancial information as well as

management of business risks with a view to safeguarding

shareholders’ investments and the Company’s assets.

The Company has a Risk Management Committee to

assist the AC and the Board to, inter alia, determine the

Company’s level of risk tolerance and risk policies, oversee

Management in the design, implementation and monitoring

the risk management and internal control systems.

Based on the internal controls established and maintained

by the Company, work performed by the internal and

external auditors, and reviews performed by management,

the Audit Committee and the Board, the Board with the

concurrence of the Audit Committee is satisfi ed with the

adequacy of the Company’s internal controls, addressing

the fi nancial, operational and compliance risks.

The system of internal controls and risk management

established by the Company provides reasonable

assurance that the Company will not be materially affected

by any event that can be reasonably foreseen. No system

of internal controls and risk management can provide

absolute assurance against the occurrence of material

errors, fraud or other irregularities.

Internal AuditThe Group maintains accountability through an internal

audit function that is independent of the activities it audits.

The internal audit team is guided by the Standards of

Professional Practice of internal auditing set by the Institute

of Internal Auditors, and it reports directly to the Chairman

of the AC and, administratively, to the CEO.

The Company’s internal auditors review the effectiveness

of the Company’s material internal controls, including

fi nancial, operational and compliance controls, and risk

management. Any material non-compliance or failures in

internal controls and recommendations for improvements

are reported to the AC. The internal audit team has

unrestricted access to all records, properties, functions

and co-operation from Management and staff necessary

to effectively discharge its responsibilities.

Communication With Shareholders The Board provides shareholders with a balanced

and understandable assessment of the Company’s

performance, position and prospects on a quarterly basis

via quarterly announcement of results and other ad hoc

announcements as required by SGX-ST.

The Company continues to keep shareholders and analysts

informed of its corporate activities on a timely, consistent

and even-handed basis. The disclosures are made on

an immediate basis as required under the Listing Manual

of the SGX-ST or as soon as possible where immediate

disclosure is not practicable. Briefi ngs and meetings with

analysts are held upon request.

In the interest of transparency and broad dissemination,

material announcements are posted on the Company’s

website at www.uic.com.sg.

To encourage shareholder participation, shareholders

receive the Annual Report/Summary Financial Report and

notice of the Annual General Meeting (“AGM”). Notice of

AGM is also advertised in the main press and

issued via SGXNET. At the AGM and immediately

thereafter, shareholders have the opportunity to

communicate their views and discuss with Board

members and Management matters affecting

the Company. The Chairman of each Board Committee,

namely, the AC, NC and RC, and the external auditor are

present at the AGM to address shareholders’ queries,

if any.

16


To ensure transparency in the voting process and better

refl ect shareholders’ interest, the Company will conduct

electronic poll voting for shareholders/proxies present

at the meeting for all the resolutions proposed at the

AGM. Votes cast, for or against, on each resolution will

be tallied and displayed “live-on-screen” to shareholders

immediately at the AGM. The total number of votes cast

for or against the resolutions will also be announced after

the AGM via SGXNET.

Greater Shareholder ParticipationThe Company’s Articles allow a shareholder of

the Company to appoint up to 2 proxies to attend and

vote in his or her place at general meetings. The Company

also allows CPF Investors to attend general meetings

as observers.

Code On Share Dealings The Company has adopted Rule 1207(19) of the SGX-ST

Listing Manual with respect to dealings in the Company’s

securities by its Directors and employees. Circulars are

issued to all Directors and employees of the Company

and its subsidiaries to remind them of, inter alia, laws of

insider trading and the importance of not dealing in the

shares of the Company and within the Group on short

term consideration and during the “prohibitive periods”.

Interested Person Transactions Policies The Company has adopted an internal policy in respect of

any transaction with interested persons and has set out

the procedures for review and approval of the Company’s

interested person transactions.

The Company’s disclosures according to Rule 907 of

the SGX-ST Listing Manual in respect of interested

person transactions (“IPT”) for the fi nancial year ended

31 December 2012 is as follows:

Name of Interested Person

Aggregate value of all IPT during

the fi nancial year under review

(excluding transactions less

than $100,000 and transactions

conducted under shareholders’

mandate pursuant to Rule 920 of

the SGX-ST Listing Manual)

S$’million

Aggregate value of all IPT

conducted under shareholders’

mandate pursuant to Rule 920

of the SGX-ST Listing Manual

(excluding transactions less than

$100,000)

S$’million

Purchase of a unit of residential

property at V on Shenton by a relative

of a director

2.0 n/a

The above IPT was conducted on normal commercial terms. The AC has reviewed and approved the above sale

and is satisfi ed that the terms are fair and reasonable and are not prejudicial to the interests of the Company and

its minority shareholders.

17


Material ContractsThere was no other material contracts of the Company

or its subsidiaries involving the interests of the CEO, each

Director or controlling shareholder, either still subsisting

at the end of the fi nancial year or if not then subsisting

entered into since the end of the previous fi nancial year

except for:

(a) Singland China Holdings Pte. Ltd. (a wholly-owned

subsidiary of Singapore Land Limited), UOL Capital

Investments Pte. Ltd. (a subsidiary of UOL Group

Limited) and Peak Star Pte. Ltd. (a subsidiary of Kheng

Leong Company (Private) Limited), have established a

joint venture company, Shanghai Jin Peng Realty Co

Ltd on a 30:40:30 basis respectively to develop Parcel

11, Changfeng District, Shanghai, PRC, into a mixed

use development comprising residential units and

retail component. The purchase price of the land was

RMB 2.06 billion.

The aforesaid transaction was on normal commercial

terms, the risks and rewards of the joint consortium are

in proportion to the equity of each joint venture partner.

(b) S.L. Development Pte Limited (a wholly-owned

subsidiary of Singapore Land Limited) and UOL Venture

Investments Pte. Ltd. (a subsidiary of UOL Group

Limited) have established a joint venture company,

United Venture Development (Bedok) Pte. Ltd. on

a 50:50 basis to develop Archipelago, a residential

development at Bedok Reservoir Road. The purchase

price of the land was S$320 million.




(c) Singland Homes Pte. Ltd. (a wholly-owned subsidiary of

Singapore Land Limited) and UOL Venture Investments

Pte. Ltd. (a subsidiary of UOL Group Limited) have

established a joint venture company, UVD Pte. Ltd. on

a 50:50 basis to develop land parcel at Bright Hill Drive.

The purchase price of the land was S$292 million.





18


Corporate Data

Board of Directors Board Appointment

Date of

Initial

Appointment

Date of

Last Re-Election

Wee Cho Yaw Non-Executive Chairman 26.06.92 27.04.12

John Gokongwei, Jr. Non-Executive Deputy Chairman 27.07.99 27.04.12

Lim Hock San President & Chief Executive Offi cer 01.04.92 27.04.12

Antonio L. Go Non-Executive and Independent Director 25.04.07 27.04.12

James L. Go Non-Executive Director 28.05.99 27.04.12

Lance Y. Gokongwei Non-Executive Director 28.05.99 27.04.12

Gwee Lian Kheng Non-Executive Director 28.05.99 27.04.12

Hwang Soo Jin Non-Executive and Independent Director 31.01.03 27.04.12

Wee Ee Lim Non-Executive Director 28.05.99 27.04.11

Yang Soo Suan Non-Executive and Independent Director 27.04.12 not applicable

Alvin Yeo Khirn Hai Non-Executive and Independent Director 11.09.02 27.04.12

Audit Committee

Yang Soo Suan Chairman (appointed Chairman on

2 January 2013)

James L. Go Member

Alvin Yeo Khirn Hai Member

Hwang Soo Jin Member

Nominating Committee

Hwang Soo Jin Chairman

Wee Cho Yaw Member

James L. Go Member

Yang Soo Suan Member(appointed on 27 April 2012)

Antonio L. Go Member

Remuneration Committee

Alvin Yeo Khirn Hai Chairman

Wee Cho Yaw Member

James L. Go Member

Hwang Soo Jin Member

Antonio L. Go Member

Company Secretary

Susie Koh

Auditors

PricewaterhouseCoopers LLP

8 Cross Street #17-00 PWC Building

Singapore 048424

Audit Partner: Sim Hwee Cher

(appointed with effect from fi nancial year 2008)

Share Registrars

KCK CorpServe Pte Ltd

333 North Bridge Road #08-00

KH KEA Building

Singapore 188721

Telephone: 6837 2133

Facsimile: 6338 3493

Registered Offi ce

24 Raffl es Place #22-01/06

Clifford Centre

Singapore 048621

Telephone: 6220 1352

Facsimile: 6224 0278

Website: www.uic.com.sg

Company Registration Number

196300181E

19


Management Review

2012 Overview

Notwithstanding the weak global sentiments, offi ce rental market showed some resilience and

recorded smaller decline in rents, underpinned mainly by demand from the non-fi nancial sectors.

However, it was a record-making year for the residential property market, with demand, liquidity and

low interest rates pushing up prices and volume.

Artist’s impression of V on Shenton.

20


Property Portfolio

Singapore Commercial Offi ce Properties

SGX Centre.

UIC Building Redevelopment Project

The former UIC Building will be redeveloped into a twin tower

comprising a 54-storey residential tower (V on Shenton)

and a 23-storey offi ce building. Strategically situated along

Shenton way, one of the principal commercial locations

in the core Central Business District and within close

proximity to the Raffl es Place/New Marina Bay Financial

District, it is designed by world renowned Dutch architect,

Ben van Berkel of UN Studio working in collaboration with

local architectural fi rm, Architects 61.

Demolition work on the existing building began in April

2012 and will complete by December 2013.

The sale of the residential units was launched in July 2012

and as at end of December, 60% has been sold.

Stamford Court

Stamford Court, a neo-classical offi ce cum retail building,

is situated at the junction of Hill Street and Stamford Road,

directly opposite the Singapore Management University. In

the year under review, the building achieved an average

occupancy of 98%.

Clifford Centre

Clifford Centre, located in the heart of Raffl es Place,

the fi nancial district of Singapore, improved its average

occupancy by 3 percentage points to 99% in the year

under review. Total rental income also improved by 7%

compared to the previous year.

Retail space which constitutes 20% of the total lettable

area, contributed signifi cantly to rental revenue and is an

added attraction to the building’s tenants for their shopping

convenience. As part of an on-going programme to help

tenants maintain healthy sales revenue, year-end marketing

promotions were organized during the festive season.

During the year, the building’s car park system was

upgraded to an Electronic Parking System to speed up

traffi c fl ow at the entry/exit points. Closed-Circuit Television

system was also installed in all lifts to enhance the security

system in the building.Clifford Centre.

21


Property Portfolio

Singapore Commercial Offi ce Properties

Singapore Land Tower.

The Gateway.

The Gateway

The twin towers are located along Beach Road, just outside

the Central Business District. Although 26% of its leases

expired during the year, the building managed to improve its

average occupancy by 3 percentage points to 96%.

All 32 lifts in The Gateway were upgraded to provide tenants

with smoother and faster rides. As part of the building’s ongoing

energy conservation programme, light fi ttings in staircases were

also replaced with higher energy effi cient ones.

Singapore Land TowerSingapore Land Tower faced intense competition from new

Grade A buildings within the Raffl es Place/New Marina Bay

Financial District. Notwithstanding the strong competition, the

building continued to perform well during the year and was

able to maintain its average occupancy at 98% although rental

income was marginally lower compared to the preceding year.

During the year, several initiatives were undertaken to

improve the building’s facilities. These include upgrading

of washrooms, installation of Electronic Parking System to

improve traffi c fl ow and the replacement of cooling towers

with energy effi cient features to save water consumption and

optimise energy effi ciency.

SGX Centre

Located along Shenton Way, the Group owns 36,000 square

feet and 240,000 square feet of lettable space in SGX Centre

1 and SGX Centre 2 respectively. During the year, SGX Centre

maintained its average occupancy at 98%. Rental income,

however, was 3% lower as market rents were still lower than

expiry rents.

The contract to serve as the managing agent for SGX Centre

was renewed for another 2 years.

Abacus Plaza and Tampines Plaza

Located in the Tampines Finance Park, the twin offi ce towers

enjoyed close proximity to various facilities such as the

Tampines MRT Station and several shopping malls.

In the year under review, both Abacus Plaza and Tampines

Plaza achieved full occupancy with improvement in rental

revenue by 13% and 4% respectively compared to the

preceding year.

During the year, the buildings’ Closed-Circuit Television system

was upgraded to enhance the security of the twin towers.

22


Singapore Commercial Retail Properties

Marina Square Shopping Mall.

Marina Square Shopping Mall

With over 640,000 square feet of net lettable retail space,

the Mall maintains a broad mix of tenants which offers

diverse shopping, dining and entertainment options. The

opening of a 20,000 square foot duplex store by British

label, Marks & Spencer in 2012, complemented the other

international fashion brands like Zara, Mango, Desigual and

Massimo Dutti. Another new tenant is Laline from Israel,

a renowned bath-and-beauty brand. These international

labels reinforce the Mall’s position as a prime shopping

destination within the Marina Bay area.

The draw of food and beverage outlets in Marina

Square remains strong with the entry of Paradise Inn.

Shoppers can expect more enticing dining options

when renovation works at the revamped Gourmet Zone

are completed in the second quarter of 2013.

Promotional activities were organised throughout 2012.

In March, the Mall’s 3-Dimensional Balloon Sculpture,

constructed in the shape of a robot, was recorded in

the Guinness World Records and the Singapore Book

of Records as the “Largest 3D Balloon Sculpture”

and the “Largest Single Sculpture Made of Balloons”

respectively. This event also bagged the Best Retail

Event 2012 organised by the Singapore Retailers

Association.

23


Property Portfolio

Mandarin Oriental Singapore.

Marina Square Hotels

The hotel market continued to remain strong with high

occupancies spurred by healthy tourists arrival from

regional and long haul markets. New tourist attractions,

such as, Gardens by the Bay and Marina Bay Sands

located within the vicinity of the 3 Marina Square Hotels

(Pan Pacifi c Singapore, Marina Mandarin Singapore and

Mandarin Oriental Singapore) have contributed to the

increased visitor arrivals into Singapore. Marina Mandarin

and Mandarin Oriental have benefi ted from this and

recorded strong occupancies and rate growth in 2012.

Pan Pacifi c Singapore embarked on a multi-million dollar

make-over in April 2012 and was re-opened in September

2012. The transformed Pan Pacifi c Singapore features a

spectacular new lobby and an exclusive Pacifi c Club on

Level 38 which commands an unparalleled 360 degree

view of the city skyline. The renovated guestrooms

encompass a perfect mix of comfort, elegant design and

latest technology. A vibrant new dining experience awaits

at the Edge, a new all-day dining restaurant featuring

seven distinct regional open kitchens. Hai Tien Lo,

an award winning Cantonese restaurant, re-opened at its

new location on Level 3, serving well-known favourites

with a contemporary interpretation.

The lobby of Pan Pacifi c Singapore.


24


Velocity @ Novena Square.


Novena Square

The Group has a 20% interest in Novena Square, a

commercial development located above the Novena MRT

Station. For the year 2012, the development enjoyed 99%

occupancy for the retail mall, Velocity@Novena Square

(“Velocity”) as well as offi ce Towers A and B.

The retail mall, Velocity strengthened its sports positioning

with several innovative sports events. 3 new events - caged

fl oorball challenge, paintball competition and human-

sized foosball tournament were organised and were

well-received by shoppers. In September 2012, Velocity

forged a new alliance with Sports Clinic of Tan Tock Seng

Hospital. The partnership allows Sports Clinic to share

crucial sports information free to shoppers through a series

of monthly talks and vital information posted on Velocity’s

Facebook page.

Velocity maintained its popularity as the preferred race kit

collection point for 18 major runs in Singapore, including

New Balance Real Run, 100 Plus Passion Run, Safari Zoo

Run, Newton 30km Run, Saloman Run and POSB Kids

Run. It was also the offi cial venue for the fi nals of Singapore

Table Tennis Crocodile Cup and the Opening of Singapore

HeritageFest 2012 by the National Heritage Board.

West Mall

West Mall which is directly connected to Bukit Batok MRT,

remains a focal point for residents of Bukit Batok, Jurong

East, Hillview, Upper Bukit Timah and Clementi. Shopper

traffi c recorded at the Mall for year 2012 was approximately

12 million.

West Mall ushered in Chinese New Year with an upbeat

acrobatic performance from Shandong, China, Carlsberg

Road Show and lion dance performance by 10 majestic

lions. During the year, West Mall continued to support

public outreach programs organised by Bukit Batok

Community Club such as Line Dancing and Community

Music Time. Events such as Tamiya racing championship,

3-on-3 basketball championship and stage appearance

by Taiwanese pop singer Alien Huang were also organised

to attract young patrons to the Mall.

Total rental revenue achieved for 2012 was $31.1 million, an

increase of 2% compared with 2011. Average occupancy

was maintained at 99%, with 27 leases spanning an area

of 43,661 square feet renewed or replaced at 20% higher

than the expiring rents. Amongst the Mall’s new tenants is a

new cinema operator Cathay Cineplex which commenced

operations in February 2013.

As part of green efforts, West Mall took part in Earth

Hour in March 2012 and installed digital kilowatt meters

at electrical switchboard to record energy consumption

of the different building services so as to monitor and

minimize energy wastages.

West Mall.

25


Property Portfolio

Singapore Residential Properties

Farrer Drive Project

The 67,471 square feet site which is located close to

the city centre, is nestled in the lush greeneries of private

residential enclave and within 2 km of two top primary

schools, Nanyang Primary School and Raffl es Girls’

Primary School. The development comprises three

8-storey blocks with 106 units and is expected to be

launched in third quarter of 2013.

Bright Hill Drive Project

Located at Bright Hill Drive, the 144,636 square feet

site along Upper Thomson Road, is within 200 metres

from the designated Upper Thomson MRT Station and

Ai Tong Primary School. The Group acquired this site in

joint venture with UOL Group Limited on 50:50 basis.

The high-rise development comprises 435 apartments

and 10 strata houses with condominium facilities. The

project is slated to be launched in third quarter of 2013.

Alexandra View Project

The 69,980 square feet site which is located at Alexandra

View is within walking distance to the Redhill MRT Station

and close to Orchard Road and the Central Business

District. The iconic high-rise development comprises

approximately 400 units and is expected to be launched

in the fourth quarter of 2013.

The Trizon

The Trizon, with a total land area of 195,000 square feet

is located off Holland Road in the Mount Sinai area. It is

a freehold development which comprises three 24-storey

blocks of 289 apartments with full condominium facilities.

The Trizon obtained the Certifi cate of Statutory Completion

in November 2012. As at end of January 2013, the project

was 94% sold.

Archipelago

Situated at the edge of Bedok Reservoir Park, this 491,080

square feet site houses a 5-storey condominium with 553

apartments and 24 strata-houses. This 50:50 joint venture

project with UOL Group Limited, was launched in December

2011 and as at end of 2012, the project was fully sold. TOP

is expected to be obtained in 2016.

Mon Jervois

Located in District 10, the 96,423 square feet site is in

the vicinity of embassies and Good Class Bungalows in

Jervois Road and Bishopgate. The fi ve-storey boutique

development with 109 units is expected to be launched in

the second quarter of 2013.

Artist’s impression of Mon Jervois.

26


Overseas Investments, China

The Excellency, Chengdu.

The Excellency, Chengdu

The 7,566 square metres site is situated close to the

popular Chun Xi Road shopping belt in Dacisi Road.

It has a saleable area of approximately 54,000 square

metres inclusive of 3,300 square metres of shopping

commercial space and two 51-storey residential blocks.

The development, which is wholly-owned by the Group,

was completed in the second quarter of 2012 with 74%

sold as at 31 December 2012.

Shanghai Chang Feng Project

The project is jointly owned by a consortium comprising

Singland China Holdings Pte. Ltd., (a subsidiary of UIC

Group), UOL Capital Investments Pte. Ltd., (a subsidiary

of UOL Group Limited) and Peak Star Pte. Ltd.,

(a subsidiary of Kheng Leong Company (Private) Limited),

with shareholdings of 30%, 40% and 30% respectively.

Situated within the Chang Feng Ecological Business Park,

about 5 kilometres to the north-east of the Hongqiao

Transportation Hub and less than 10 kilometres from the

Bund, the site has a total land area of approximately 39,540

square metres. The proposed mixed-use development

comprising residential and retail components has 70 years

tenure for the residential and 40 years tenure for the retail

component.

Construction is expected to commence in the second

quarter of 2013.

Artist’s impression of Shanghai Chang Feng Project.

27


The Westin Tianjin.

Overseas Investments, China

Sheraton Tianjin Hotel.

Property Portfolio

The Westin Tianjin

The Westin Tianjin hotel, situated in Heping district central

business area, has 275 guest rooms, 7 food and beverage

outlets which offer a variety of cuisines and a 1,265 metres

of event space comprising a ballroom, exhibit space,

conference/meeting rooms, and banquet facilities. The

Westin Tianjin has built a good reputation among business

travellers and was awarded Best Business Hotel in Tianjin

for 3 consecutive years since 2010 by the Business

Travelers Magazine. The hotel had an average occupancy

of 68% with average room rate at RMB 807 for 2012.

Sheraton Tianjin Hotel

Situated in Hexi District, south-west of Tianjin City, Sheraton

Tianjin has a total of 296 rooms which comprises 240

guest rooms and 56 serviced apartments. Being amongst

the fi rst few internationally branded hotels to make an

entry in Tianjin City, it has been in the market for more than

2 decades. During the year, the hotel registered an average

occupancy of 70% with an average room rate of RMB 684.

The Group has a 36% interest in the hotel.

Beijing Landmark Towers

The Group has a 19.95% interest in Beijing Landmark

Towers, a mixed development comprising a hotel, an

apartment block and 2 offi ce towers. The Group received

$2.1 million of dividend from this investment in 2012.

28


Trading and Services

The Management Team of UIC Technologies Group.

UIC Technologies Pte Ltd

For the year ended 31 December 2012, UIC Technologies

Group’s (UICT) revenue decreased by 9% to $73.4 million

as compared with the same period last year resulting in

pre-tax profi t decreasing by 31% ($0.9 million) to $1.9

million. The uncertain global economy in 2012 resulted in

slower rollout of IT projects and hardware refresh in the

corporate sector.

UICTech Group will continue to strive to maintain its

preferred IT Solutions and Service Provider status in

Singapore. It will continue to leverage its strength and

strong strategic alliances with key IT vendors with include

HP, Microsoft, Dell, Lenovo, Symantec and VMware

to expand its offerings which include cloud computing

services in Education, Healthcare, Financial Services and

mid-size Enterprises.

Information Technology

29


Human Resource

Food from the Heart, a Community Development Programme.Heritage Hunt to promote staff bonding.

BollyRobics, part of the exercise programme for staff.

As the UIC Group values employees, its employment

policies and practices adhere to employment standards

and keep abreast with property industry trend.

Employees are encouraged to attend training courses

and seminars to enhance their knowledge of the changing

trends and developments in the property sector as well as

in their areas of professional expertise.

As part of the Group’s effort in promoting work-life harmony,

a series of ongoing Workplace Health Promotion activities

were organised during the year. These include health

talks, ergonomics exercise, cardio-fi t, healthy cooking

classes and distribution of fruits. For the second time, the

Group received its Gold Award from The Health Promotion

Board which recognises organisations with commendable

Workplace Health Promotion programmes. Such activities

also provide opportunities for staff interaction and

cohesiveness.

To promote family bonding, social activities such as day trip

to Johor Bahru and Gardens by the Bay were organised for

employees and their families. Corporate passes are also

available for employees and their families to visit Singapore

Science Centre and IMAX Theatre.

In support of corporate and social responsibility,

employees voluntarily participated in community outreach

programme, such as at the Food from the Heart, a

charitable organisation in Singapore. The Group also

made contributions to several community and charitable

organisations during the year.

30


Property Activities SummaryAs at 31 December 2012

Site Area

(sq metres)

Gross

Floor Area

(sq metres)

Approximate

Net Floor

Area

(sq metres)

Car

Parking

Lots

Percentage of

Shareholding

Capital

Value

($m)

Subsidiary Companies'

Investment Properties

Stamford Court

A 4-storey commercial building of shops and

offi ces situated at the junction of Stamford

Road and Hill Street

2,072 7,264 5,990 36 100 87

West Mall

A 5-storey retail and entertainment complex

with three basements of car parking space,

located at Bukit Batok Town Centre

9,890 26,300 17,042 314 90 398

Singapore Land Tower

A 47-storey complex of banks and offi ces and

three basements of car parking space with

frontages on Raffl es Place/Battery Road

5,064 74,215 57,500 288 80 1,480

SGX Centre 2

A 29-storey offi ce building with

two basements of car parking space

located at 4 Shenton Way

2,970 36,590 25,800 (inclusive of

3,336 sq m in

SGX Centre 1)

136 80 503 (UIC Group’s

interest in SGX

Centre 1 & 2)

Clifford Centre

A 29-storey complex of shops and

offi ces with frontages on both

Raffl es Place and Collyer Quay

3,343 37,267 25,470 268 80 527

The Gateway

A pair of 37-storey towers with two

basements of car parking space located at

Beach Road

22,381 97,430 69,803 689 80 1,046

Abacus Plaza

and Tampines Plaza

A pair of 8-storey offi ce buildings with

two basements of car parking space

located at Tampines Central 1 in

the Tampines Finance Park

2,614 10,970 8,397 87 80 86

2,613 10,965 8,397 79 80 85

Marina Square

3 Hotels and two investment properties,

a 4-storey Retail Mall (comprising fashion

boutiques, department store, eating and

entertainment outlets, food court, cinemas,

bowling alley and car park) and a six-storey

offi ce building (Marina Bayfront)

92,197 315,211 206,780 1,990 42 935

(In respect

of retail mall

and offi ce

building only)

Proposed commercial

redevelopment

(at former location of UIC Building) This is a part of a mixed development

(residential/commercial building) with the residential

component, V on Shenton classifi ed under

properties held for sale

6,778 30,933 25,714 588 100 339

31


Property Activities Summary

Site Area

(sq metres)

Gross

Floor Area

(sq metres)

Approximate

Net Floor

Area

(sq metres)

Car

Parking

Lots

Percentage of

Shareholding

Capital

Value

($m)

Associated Company’s

Investment Property

Novena Square

A commercial complex comprising two

offi ce towers of 25 and 18 storeys and

a three-storey retail block located at

the junction of Thomson Road and

Moulmein Road

16,673 70,010 57,197 491 16 1,083

Tenure

Site Area

(sq metres)

Gross Floor

Area

(sq metres)

Actual/

Expected

Year of

TOP

Percentage of

Shareholding

Subsidiary and Associated Companies’, and

Joint Ventures’ Properties Held For Sale

Completed in 2012

The Trizon

289-unit condominium at Ridgewood Close

Freehold 18,153 38,122 2012 80

The Excellency, Chengdu

Two towers of 51 storeys each with 3 basement

car parks at the junction of Dacisi Road and

Tian Xian Qiao Road North

Leasehold 7,566 77,000 2012 80

Under Development

Archipelago

577-unit condominium development

at Bedok Reservoir Road

Leasehold 45,623 63,873 2016 40

V on Shenton

510-unit condominium development at Shenton Way This is a part of a mixed development (residential/commercial

building) with the commercial component classifi ed under

investment properties

Leasehold 6,778 55,850 2017 100

Shanghai Chang Feng Project

398-unit condominium development at No. 11 plot,

Danba Road/Tongpu Road, Changfeng Area,

Putuo District, Shanghai

Leasehold 39,540 85,800 2016 24

Mon Jervois

109-unit condominium development at Jervois Road

Leasehold 8,958 12,542 2016 80

Development site at Farrer Drive

106-unit condominium development at Farrer Drive

Leasehold 6,268 10,030 2016 80

Development site at Bright Hill Drive

445-unit condominium development at Bright Hill Drive

Leasehold 13,437 37,624 2017 40

Development site at Alexandra View

400-unit condominium development at Alexandra View

Leasehold 6,501 31,857 2017 80

As at 31 December 2012

32

Financial Report Contents

34 Directors’ Report

40 Statement by Directors

41 Independent Auditor’s Report

43 Consolidated Income Statement

44 Consolidated Statement of Comprehensive Income

45 Statements of Financial Position

46 Consolidated Statement of Changes in Equity

47 Consolidated Statement of Cash Flows

49 Notes to the Financial Statements

33


Directors’ ReportFor the fi nancial year ended 31 December 2012

The directors present their report to the members together with the audited fi nancial statements of the Group for the

fi nancial year ended 31 December 2012 and the statement of fi nancial position of the Company as at 31 December 2012.

Directors

The directors of the Company in offi ce at the date of this report are:

Wee Cho Yaw (Chairman)

John Gokongwei, Jr. (Deputy Chairman)

Lim Hock San (President and Chief Executive Offi cer)

Antonio L. Go

James L. Go

Lance Y. Gokongwei

Gwee Lian Kheng

Hwang Soo Jin

Wee Ee Lim

Yang Soo Suan (Appointed on 27 April 2012)

Alvin Yeo Khirn Hai

Arrangements to enable directors to acquire shares and debentures

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

was to enable the directors of the Company to acquire benefi ts by means of the acquisition of shares in, or debentures

of, the Company or any other body corporate, other than as disclosed under “Share options” of this report.

34


Directors’ interests in shares or debentures

(a) According to the register of directors’ shareholdings, none of the directors holding offi ce at the end of the fi nancial

year had any interest in the shares or debentures of the Company or related corporations, except as follows:

Holdings registered in name of

director or nominee

Holdings in which director is

deemed to have an interest

At 31.12.2012 At 1.1.2012 At 31.12.2012 At 1.1.2012

United Industrial Corporation

Limited (“UIC”)

(Ordinary shares)

Wee Cho Yaw 1,857,000 1,857,000 664,140,565 658,112,565

John Gokongwei, Jr. - - 497,245,000 497,195,000

Lim Hock San 22,000 22,000 - -

Hwang Soo Jin 300,000 300,000 - -

Singapore Land Limited

(Ordinary shares)

John Gokongwei, Jr. - - 329,207,384 323,565,384

Lim Hock San 340,000 340,000 - -

(b) According to the register of directors’ shareholdings, the following director holding offi ce at the end of the fi nancial

year had an interest in options to subscribe for ordinary shares of the Company granted pursuant to the UIC Share

Option Scheme:

No of unissued ordinary shares

of the Company under option

At 31.12.2012 At 1.1.2012

Lim Hock San 870,000 770,000

(c) Except for Dr. John Gokongwei, Jr., who has a deemed interest in 502,245,000 UIC shares as at 21 January 2013,

there was no change in any of the above-mentioned directors’ interests between the end of the fi nancial year and

21 January 2013.


35



Directors’ contractual benefi ts

Since the end of the previous fi nancial year, no director has received or become entitled to receive a benefi t by reason

of a contract made by the Company or a related corporation with the director or with a fi rm of which he is a member

or with a company in which he has a substantial fi nancial interest, except as disclosed in the accompanying fi nancial

statements note 30.

Share options

UIC SHARE OPTION SCHEME

(a) The UIC Share Option Scheme (“ESOS”) to subscribe for ordinary shares of the Company, was approved by the

shareholders of the Company on 18 May 2001. The ESOS had expired on 17 May 2011 and was continued with

the shareholders’ approval at an annual general meeting held on 27 April 2011, for a further period of 10 years from

18 May 2011 to 17 May 2021. Other than the extension, there is no change in any other rules of the ESOS. The

ESOS is administered by the Remuneration Committee (“RC”) comprising the following members:

Alvin Yeo Khirn Hai Chairman (Independent)

Wee Cho Yaw Member (Non-independent)

James L. Go Member (Non-independent)

Hwang Soo Jin Member (Independent)

Antonio L. Go Member (Independent)

Under the terms of the ESOS, the total number of shares granted shall not exceed 5% of the issued share capital

of the Company on the day immediately preceding the offer date of the ESOS. The exercise price is equal to the

average of the last done price per share of the Company’s ordinary shares on the Singapore Exchange Securities

Trading Limited (“SGX–ST”) for fi ve market days immediately preceding the date of the offer.

(b) The aggregate number of options granted to an executive director Lim Hock San and to key executives of

the Company and its subsidiaries since the initial grant of options on 5 March 2007 up to 31 December 2012

is 6,922,000.

Details of the options granted for fi nancial years from 2007 up to 2011 have been set out in the Directors’ Report

for the respective fi nancial years.

On 27 February 2012, the Company granted options to subscribe for 934,000 shares at an exercise price of $2.73

per ordinary share (“2012 Options”).

36



Share options (continued)

UIC SHARE OPTION SCHEME (continued)

The details of the 2012 Options granted are as follows:

Number of

employees

At exercise

price of $2.73

per share

Executive Director, Lim Hock San 1 100,000

Key Executives 15 834,000

16 934,000

(c) Principal terms of the ESOS are set out below:

(i) only full time confi rmed executives of the Company or any of its subsidiary companies (including executive

directors) are eligible for the grant of options;

(ii) the ESOS shall be in force at the discretion of the RC subject to a maximum period of 10 years and may be

continued with the approval of the shareholders;

(iii) all options granted shall be exercisable, in whole or in part (only in respect of 1,000 shares or any multiple

thereof), before the tenth anniversary of the Offer Date and in accordance with the following vesting schedule:

Vesting schedule

Percentage of shares over which

options are exercisable

On or after the second anniversary of the Offer Date 50%

On or after the third anniversary of the Offer Date 25%

On or after the fourth anniversary of the Offer Date 25%

The vesting and exercising of vested or unexercised options are governed by conditions set out in the ESOS; and

(iv) participants in the ESOS, shall not, except with the prior approval of the RC in its absolute discretion, be entitled

to participate in any other share option schemes or share incentive schemes implemented by companies

within or outside the Group. The settlement of options are subject to conditions as set out in the ESOS.

37



Share options (continued)

UIC SHARE OPTION SCHEME (continued)

(d) Other information required by SGX-ST:

(i) The details of options granted to an executive director of the Company, Lim Hock San under the ESOS are

as follows:

Granted in

the fi nancial year ended

31.12.2012

Aggregate granted since

commencement of ESOS

to 31.12.2012

Aggregate

exercised since

commencement of

ESOS to 31.12.2012

Aggregate

outstanding

as at 31.12.2012

100,000 870,000 Nil 870,000

(ii) No options have been granted to controlling shareholders or their associates and no participant has received 5% or

more of the total options available under the ESOS. No options were granted at a discount during the fi nancial year.

(e) During the fi nancial year, 300,000 shares of the Company were issued upon the exercise of options as follows:

By holders of Number of shares Exercise price per share

2009 Options 104,000 $1.07

2010 Options 196,000 $2.03

300,000

(f) As at the end of the fi nancial year, the following options to acquire ordinary shares in the Company were outstanding:

Date of

grant of

options

Options

outstanding

at 1.1.2012

Options

granted in

2012

Options

exercised

Options

cancelled in

2012

Options

outstanding

at 31.12.2012

Exercise

price per

share

Date of

expiry

5.3.2007 1,782,000 - - (144,000) 1,638,000 $2.70 4.3.2017

10.3.2008 804,000 - - (48,000) 756,000 $2.91 9.3.2018

4.5.2009 338,000 - (104,000) (8,000) 226,000 $1.07 3.5.2019

26.2.2010 584,000 - (196,000) (16,000) 372,000 $2.03 25.2.2020

1.3.2011 824,000 - - (35,000) 789,000 $2.78 28.2.2021

27.2.2012 - 934,000 - - 934,000 $2.73 26.2.2022

4,332,000 934,000 (300,000) (251,000) 4,715,000

38



Audit Committee

The Audit Committee comprises four non-executive directors, namely, Yang Soo Suan (Chairman), James L. Go, Hwang

Soo Jin and Alvin Yeo Khirn Hai, majority of whom including the Chairman, are independent directors.

The Audit Committee carried out its functions in accordance with Section 201B(5) of the Companies Act. At a series

of meetings convened during the twelve months up to the date of this report, the Audit Committee reviewed reports

prepared respectively by the external and the internal auditors and approved proposals for improvements in internal

controls. The announcement of quarterly and full year results, the fi nancial statements of the Group and the Independent

Auditor’s Report thereon for the full year were also reviewed prior to consideration and approval of the Board.

Independent auditor

The independent auditor, PricewaterhouseCoopers LLP, has expressed its willingness to accept re-appointment.

On behalf of the directors

WEE CHO YAW LIM HOCK SAN

Director Director

8 February 2013

39


Statement by DirectorsFor the fi nancial year ended 31 December 2012

In the opinion of the directors,

(a) the statement of fi nancial position of the Company and the consolidated fi nancial statements of the Group as set

out on pages 43 to 103 are drawn up so as to give a true and fair view of the state of affairs of the Company and

of the Group as at 31 December 2012 and of the results of the business, changes in equity and cash fl ows of the

Group for the fi nancial year then ended; and

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

as and when they fall due.

On behalf of the directors

WEE CHO YAW LIM HOCK SANDirector Director

8 February 2013

40


Independent Auditor’s ReportTo The Members of United Industrial Corporation Limited

Report on the Financial Statements

We have audited the accompanying fi nancial statements of United Industrial Corporation Limited (the “Company”)

and its subsidiaries (the “Group”) set out on pages 43 to 103, which comprise the consolidated statement of fi nancial

position of the Group and statement of fi nancial position of the Company as at 31 December 2012, the consolidated

income statement, statement of comprehensive income, statement of changes in equity and statement of cash

fl ows of the Group for the fi nancial year then ended, and a summary of signifi cant accounting policies and other

explanatory information.

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation of fi nancial statements that give a true and fair view in accordance with

the provisions of the Singapore Companies Act (the “Act”) and Singapore Financial Reporting Standards, and for devising

and maintaining a system of internal accounting controls suffi cient 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 profi t and loss accounts and statements of fi nancial

position and to maintain accountability of assets.

Auditor’s Responsibility

Our responsibility is to express an opinion on these fi nancial statements based on our audit. We conducted our audit in

accordance with Singapore Standards on Auditing. Those Standards require that we comply with ethical requirements

and plan and perform the audit to obtain reasonable assurance about whether the fi nancial statements are free from

material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the fi nancial

statements. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of

material misstatement of the fi nancial statements, whether due to fraud or error. In making those risk assessments, the

auditor considers internal control relevant to the entity’s preparation of fi nancial statements that give a true and fair view

in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing

an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of

accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating

the overall presentation of the fi nancial statements.

We believe that the audit evidence we have obtained is suffi cient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the consolidated fi nancial statements of the Group and the statement of fi nancial position 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 31 December 2012, and of the

results, changes in equity and cash fl ows of the Group for the fi nancial year ended on that date.

41


Independent Auditor’s ReportTo The Members of United Industrial Corporation Limited

Report on Other Legal and Regulatory Requirements

In our opinion, the accounting and other records required by the Act to be kept by the Company and by those subsidiaries

incorporated in Singapore of which we are the auditors, have been properly kept in accordance with the provisions of

the Act.

PricewaterhouseCoopers LLP

Public Accountants and Certifi ed Public Accountants

Singapore, 8 February 2013

42


Note

2012

$’000

2011

$’000

(restated)

Revenue 4 711,488 805,504

Cost of sales 5 (411,112) (451,774)

Gross profi t 300,376 353,730

Investment income 6 4,741 3,080

Other gains/(losses) - net 2,801 1,590

Selling and distribution costs (33,769) (19,407)

Administrative expenses (19,557) (19,214)

Finance expenses (3,112) (5,566)

Share of results of associated companies 68,767 43,650

Share of results of joint ventures - (500)

320,247 357,363

Fair value gain on investment properties 16 247,327 21,366

Profi t before income tax 7 567,574 378,729

Income tax expense 8 (43,788) (50,981)

Net profi t 523,786 327,748

Attributable to:

Equity holders of the Company 9 391,555 195,357

Non-controlling interests 132,231 132,391

523,786 327,748

Basic/Diluted earnings per share attributable to

equity holders of the Company

(expressed in cents per share) 10 28.4 cents 14.2 cents

Consolidated Income Statement For the fi nancial year ended 31 December 2012

The accompanying notes form an integral part of these fi nancial statements.

43


2012

$’000

2011

$’000

(restated)

Net profi t

Other comprehensive (expense)/income items: 523,786 327,748

Net exchange differences on translation of fi nancial statements of foreign entities (15,435) 14,578

Total comprehensive income 508,351 342,326

Total comprehensive income attributable to:

Equity holders of the Company 380,519 205,461

Non-controlling interests 127,832 136,865

508,351 342,326

Consolidated Statement of Comprehensive Income For the fi nancial year ended 31 December 2012


44


Statements of Financial PositionAs at 31 December 2012

The Group The Company

Note

2012

$’000

2011

$’000

2010

$’000

2012

$’000

2011

$’000

(restated) (restated)ASSETSNon-current assetsOther receivables 11 153,059 73,381 4,305 1,167,912 1,231,507Available-for-sale fi nancial assets 12 12,045 12,045 12,045 - -Investments in associated companies 13 427,038 382,348 235,260 - -Investments in joint ventures 14 - - - - -Investments in subsidiary companies 15 - - - 1,227,119 1,227,519Investment properties 16 5,485,300 5,219,900 5,458,000 - -Property, plant and equipment 17 541,885 479,774 491,518 680 737

6,619,327 6,167,448 6,201,128 2,395,711 2,459,763

Current assetsCash and cash equivalents 18 108,473 100,052 140,028 912 565Properties held for sale 19 779,298 878,932 491,581 - -Trade and other receivables 20 97,715 96,479 182,468 1,126 1,405Inventories 1,967 1,995 2,561 - -

987,453 1,077,458 816,638 2,038 1,970

Total assets 7,606,780 7,244,906 7,017,766 2,397,749 2,461,733

LIABILITIESCurrent liabilitiesTrade and other payables 21 183,678 273,971 256,312 3,173 3,252Current income tax liabilities 8 77,303 85,513 83,729 - 696Borrowings 22 586,791 744,205 649,675 443,870 505,425

847,772 1,103,689 989,716 447,043 509,373

Non-current liabilitiesTrade and other payables 21 49,845 54,412 50,245 151,162 154,518Borrowings 22 269,880 41,440 114,741 - -Deferred income tax liabilities 23 50,640 65,241 79,937 - -

370,365 161,093 244,923 151,162 154,518

Total liabilities 1,218,137 1,264,782 1,234,639 598,205 663,891

NET ASSETS 6,388,643 5,980,124 5,783,127 1,799,544 1,797,842

EQUITY Capital and reserves attributable

to equity holders of the CompanyShare capital 24 1,401,892 1,401,382 1,400,927 1,401,892 1,401,382Reserves 3,282,024 2,906,850 2,705,567 397,652 396,460

4,683,916 4,308,232 4,106,494 1,799,544 1,797,842Non-controlling interests 1,704,727 1,671,892 1,676,633 - -TOTAL EQUITY 6,388,643 5,980,124 5,783,127 1,799,544 1,797,842


45


Consolidated Statement of Changes in EquityFor the fi nancial year ended 31 December 2012

Attributable to equity holders of the Company

Share

capital

$’000

Retained

earnings

$’000

Asset

revaluation

reserve

$’000

Other

reserve

$’000

Total

$’000

Non-

controlling

interests

$’000

Total

equity

$’000

2012

Balance at 1 January 2012- as previously reported 1,401,382 2,496,524 29,382 12,597 3,939,885 1,549,174 5,489,059- effect of adopting FRS 12 - 368,347 - - 368,347 122,718 491,065

Balance at 1 January 2012, as restated 1,401,382 2,864,871 29,382 12,597 4,308,232 1,671,892 5,980,124

Total comprehensive income/ (expense) - 391,555 - (11,036) 380,519 127,832 508,351

Employee share option scheme- value of employee

services - - - 725 725 - 725- proceeds from shares

issued 510 - - - 510 - 510Effect of purchase of shares

from non-controlling shareholders - 35,272 - - 35,272 (66,339) (31,067)

Dividends paid - (41,342) - - (41,342) (28,658) (70,000)Balance at 31 December 2012 1,401,892 3,250,356 29,382 2,286 4,683,916 1,704,727 6,388,643

2011

Balance at 1 January 2011- as previously reported 1,400,927 2,295,649 29,382 1,924 3,727,882 1,551,856 5,279,738- effect of adopting FRS 12 - 378,612 - - 378,612 124,777 503,389

Balance at 1 January 2011, as restated 1,400,927 2,674,261 29,382 1,924 4,106,494 1,676,633 5,783,127

Total comprehensive income - 195,357 - 10,104 205,461 136,865 342,326Employee share option

scheme- value of employee

services - - - 569 569 - 569- proceeds from shares

issued 455 - - - 455 - 455Effect of purchase of shares

from non-controlling shareholders- as previously reported - 28,051 - - 28,051 (84,553) (56,502)- effect of adopting FRS 12 - 8,536 - - 8,536 (8,536) -

- 36,587 - - 36,587 (93,089) (56,502)Dividends paid - (41,334) - - (41,334) (48,517) (89,851)Balance at 31 December 2011 1,401,382 2,864,871 29,382 12,597 4,308,232 1,671,892 5,980,124


46


Consolidated Statement of Cash FlowsFor the fi nancial year ended 31 December 2012

2012

$’000

2011

$’000

(restated)

Cash fl ows from operating activities Profi t before income tax 567,574 378,729Adjustments for:

Depreciation of property, plant and equipment 23,944 22,341Employee share option expense 725 569Loss on disposal of property, plant and equipment 370 116Share of results of associated companies (68,767) (43,650)Share of results of joint ventures - 500Fair value gain on investment properties (247,327) (21,366)Investment income (4,741) (3,080)Interest expense 3,112 5,566Unrealised currency translation differences (1,717) 832

Operating cash fl ow before working capital changes 273,173 340,557

Change in operating assets and liabilities:Properties held for sale 105,414 68,882Inventories 28 566Trade and other receivables (1,235) 69,978Trade and other payables (104,030) 22,373

Cash generated from operations 273,350 502,356

Interest paid (10,775) (10,077)Income tax paid (65,879) (64,619)Net cash provided by operating activities 196,696 427,660


47


Consolidated Statement of Cash FlowsFor the fi nancial year ended 31 December 2012

Note

2012

$’000

2011

$’000

(restated)

Cash fl ows from investing activitiesPurchase of property, plant and equipment (83,409) (4,630)Proceeds from disposal of property, plant and equipment 48 30Upgrading of investment properties (10,126) (10,663)Redevelopment of an investment property (5,953) (182,964)Repayment of loan by an associated company - 3,072Loans to joint ventures (77,812) (71,243)Investments in associated companies - (94,852)Investment in a joint venture - (500)Dividends received from unquoted equity investments 2,229 1,665Dividends received from associated companies 15,635 15,810Interest received 644 1,308Net cash used in investing activities (158,744) (342,967)

Cash fl ows from fi nancing activitiesRepayment of borrowings (165,595) (239,780)Proceeds from borrowings 236,621 261,009Bank deposits pledged as security for bank borrowing (5,570) -Proceeds from issue of shares 510 455Purchase of shares from non-controlling shareholders (31,067) (56,502)Dividends paid to shareholders (41,342) (41,334)Dividends paid to non-controlling shareholders (28,658) (48,517)Net cash used in fi nancing activities (35,101) (124,669)

Net increase/(decrease) in cash and cash equivalents 2,851 (39,976)Cash and cash equivalents at beginning of fi nancial year 100,052 140,028Cash and cash equivalents at end of fi nancial year 18 102,903 100,052


48


Notes to The Financial StatementsFor the fi nancial year ended 31 December 2012

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

1. GENERAL INFORMATION

United Industrial Corporation Limited (the “Company”) is incorporated and domiciled in Singapore. The address of

its registered offi ce is 24 Raffl es Place #22-01/06, Clifford Centre, Singapore 048621.

The Company is listed on the Singapore Exchange.

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

Group consist of development of properties for investment and trading, investment holding, property management,

investment in hotels and retail centres, trading in computers and related products, and provision of information

technology services.

2. SIGNIFICANT ACCOUNTING POLICIES

2.1 Basis of preparation

The fi nancial statements have been prepared in accordance with Singapore Financial Reporting Standards (“FRS”)

under the historical cost convention, except as disclosed in the accounting policies below.

The preparation of fi nancial statements in conformity with FRS requires management to exercise its judgement

in the process of applying the Group’s accounting policies. It also requires the use of certain critical accounting

estimates and assumptions. The areas involving a higher degree of judgement or complexity, or areas where

assumptions and estimates are signifi cant to the fi nancial statements, are disclosed in note 3.

Interpretations and amendments to published standards effective in 2012

On 1 January 2012, the Group adopted the new or amended FRS and Interpretations to FRS (“INT FRS”) that are

mandatory for application for the fi nancial year. Changes to the Group’s accounting policies have been made as

required, in accordance with the transitional provisions in the respective FRS and INT FRS.

The adoption of these new or amended FRS and INT FRS did not result in substantial changes to the accounting

policies of the Group and the Company and had no effect on the amounts reported for the current or prior fi nancial

years, except as disclosed below.

49



2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

2.1 Basis of preparation (continued)

Interpretations and amendments to published standards effective in 2012 (continued)

The Group has adopted the amendments to FRS 12 Deferred Tax: Recovery of Underlying Assets on 1

January 2012. The amended FRS 12 has introduced a presumption that an investment property measured

at fair value is recovered entirely by sale. The amendment, effective for annual periods beginning on or after

1 January 2012, is to be applied retrospectively.

Previously, the Group accounted for deferred tax on fair value gains on investment property on the basis that the

asset would be recovered through use. Upon adoption of the amendment, such deferred tax is measured on the

basis of recovery through sale.

The effects on adoption are as follows:

Increase/(Decrease)

2012

$’000

2011

$’000

2010

$’000

Consolidated statement of fi nancial position as at 31 December:Investments in associated companies 9,602 3,378 1,935Deferred income tax liabilities (529,733) (487,687) (501,454)Retained earnings 412,270 368,347 378,612Non-controlling interests 127,065 122,718 124,777

Consolidated income statement for the fi nancial year

ended 31 December:Share of results of associated companies 6,224 1,443Income tax expense (42,046) 13,767Non-controlling interests 10,305 6,477

Basic and diluted earnings per share for the fi nancial yearended 31 December (cents per share) 2.8 cents (1.3) cents

50



2.2 Revenue recognition

Revenue comprises the fair value of consideration received or receivable for the sale of goods and rendering of

services, net of goods and services tax, rebates and discounts after eliminating revenue within the Group.

The Group recognises revenue when the amount of revenue and related cost can be reliably measured, it is

probable that the collectibility of the related receivables is reasonably assured and when the specifi c criteria for each

of the Group’s activities are met as follows:

(a) Rental income

Rental income from operating leases (net of any incentives given to the lessees) on investment properties is

recognised on a straight-line basis over the lease term.

(b) Revenue on sale of properties held for sale

Revenue from sale of properties held for sale in respect of sale and purchase agreements entered into prior

to completion of construction is recognised when the properties are delivered to the buyers, except for in

cases where the control and risk and rewards of the property are transferred to the buyers as construction

progresses.

For sales of uncompleted residential properties made with a Normal Payment Scheme feature in Singapore, the

transfer of signifi cant risks and rewards of ownership occurs in the current state as construction progresses.

Revenue is recognised by reference to the stage of completion using the percentage of completion method,

determined by the level of construction costs incurred as a proportion of the estimated total construction

costs to completion.

For sales of overseas development properties and Singapore residential properties made with a Deferred

Payment Scheme feature, such transfer generally occurs when the property units are completed and delivered

to the purchasers. Revenue is recognised upon completion of construction.

(c) Revenue from hotel operations

Revenue from the rental of hotel rooms and other facilities is recognised when the services are rendered.

Revenue from the sale of food and beverage is recognised when the goods are delivered to the customer.

(d) Revenue from information technology operations

Revenue from sale of computer hardware and software is recognised when the Group has transferred

signifi cant risks and rewards of ownership of the products to the customer on delivery and the customer has

accepted the products. Revenue from the rendering of services is recognised when the service is rendered,

by reference to completion of specifi c transaction assessed on the basis of the actual service provided as a

proportion to the total services to be performed.

(e) Property services fees

Property services fees are recognised when the services are rendered.

(f) Interest income

Interest income is recognised on a time proportion basis using the effective interest method.


51



2.2 Revenue recognition (continued)

(g) Dividend income

Dividend income is recognised when the right to receive payment is established.

(h) Car parking income

Car parking income is recognised on a straight-line basis based on time proportion.

2.3 Group accounting

(a) Subsidiary companies

(i) Consolidation

Subsidiary companies are entities over which the Group has power to govern the fi nancial and operating

policies so as to obtain benefi ts from its activities, generally accompanied by a shareholding giving rise

to the majority of the voting rights. The existence and effect of potential voting rights that are currently

exercisable or convertible are considered when assessing whether the Group controls another entity.

Subsidiary companies are consolidated from the date on which control is transferred to the Group. They

are de-consolidated from the date on which control ceases.

In preparing the consolidated fi nancial statements, transactions, balances and unrealised gains on

transactions between group entities are eliminated. Unrealised losses are also eliminated but are

considered an impairment indicator of the asset transferred. Accounting policies of subsidiary companies

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

Non-controlling interests are that part of the net results of operations and of net assets of a subsidiary

company attributable to the interests which are not owned directly or indirectly by the equity holders

of the Company. They are shown separately in the consolidated statement of comprehensive income,

statement of changes in equity and statement of fi nancial position. Total comprehensive income is

attributed to the non-controlling interests based on their respective interests in a subsidiary company,

even if this results in the non-controlling interests having a defi cit balance.

(ii) Acquisitions

The acquisition method of accounting is used to account for business combinations by the Group.

The consideration transferred for the acquisition of a subsidiary company or business comprises of the

fair value of the assets transferred, the liabilities incurred and the equity interests issued by the Group.

The consideration transferred also includes the fair value of any contingent consideration arrangement

and fair value of any pre-existing equity interest in the subsidiary company.

Acquisition-related costs are expensed as incurred.

Identifi able assets acquired and liabilities and contingent liabilities assumed in a business combination

are, with limited exceptions, measured initially at their fair values at the acquisition date.


52



2.3 Group accounting (continued)

(a) Subsidiary companies (continued)

(ii) Acquisitions (continued)

On an acquisition-by-acquisition basis, the Group recognises any non-controlling interest in the acquiree

at the date of acquisition either at fair value or at the non-controlling interest’s proportionate share of the

acquiree’s identifi able net assets.

The excess of (i) the consideration transferred, the amount of any non-controlling interest in the acquiree

and the acquisition-date fair value of any previous equity interest in the acquiree over the (ii) fair value

of the identifi able net assets acquired is recorded as goodwill. If those amounts are less than the fair

value of the identifi able net assets of the subsidiary company acquired and the measurement of all

amounts have been reviewed, the difference is recognised directly in the income statement as a bargain

purchase. Please refer to the paragraph “Goodwill on acquisitions” for the subsequent accounting policy

on goodwill.

(iii) Disposals

When a change in the Group ownership interest in a subsidiary company results in a loss of control over

the subsidiary company, the assets and liabilities of the subsidiary company including any goodwill are

derecognised. Amounts previously recognised in other comprehensive income in respect of that entity

are also reclassifi ed to the income statement or transferred directly to retained earnings if required by a

specifi c Standard.

Any retained equity interest in the entity is remeasured at fair value. The difference between the carrying

amount of the retained interest at the date when control is lost and its fair value is recognised in the

income statement.

Please refer to the paragraph “Investments in subsidiary and associated companies, and joint ventures”

for the accounting policy on investments in subsidiary companies in the separate fi nancial statements of

the Company.

(b) Transactions with non-controlling interests

Changes in the Group’s ownership interest in a subsidiary company that do not result in a loss of control

over the subsidiary company are accounted for as transactions with equity owners of the Company. Any

difference between the change in the carrying amounts of the non-controlling interest and the fair value of the

consideration paid or received is recognised in retained earnings within equity attributable to the equity holders

of the Company.


53




(c) Associated companies and joint ventures

Associated companies are entities over which the Group has signifi cant infl uence, but not control, generally

accompanied by a shareholding giving rise to voting rights of 20% and above but not exceeding 50%. Joint

ventures are entities over which the Group has contractual arrangements to jointly share control over the

economic activity of the entities with one or more parties. Investments in associated companies and joint

ventures are accounted for in the consolidated fi nancial statements using the equity method of accounting

less impairment losses, if any.

(i) Acquisitions

Investments in associated companies and joint ventures are initially recognised at cost. The cost of

an acquisition is measured at the fair value of the assets given, equity instruments issued or liabilities

incurred or assumed at the date of exchange, plus costs directly attributable to the acquisition. Goodwill

on associated companies and joint ventures represents the excess of the cost of acquisition of the

associate/joint venture over the Group’s share of the fair value of the identifi able net assets of the

associate/joint venture and is included in the carrying amount of the investments.

(ii) Equity method of accounting

In applying the equity method of accounting, the Group’s share of its associated companies’ and joint

ventures’ post-acquisition profi ts or losses are recognised in the income statement and its share of post-

acquisition other comprehensive income is recognised in other comprehensive income. These post-

acquisition movements and distributions received from the associated companies and joint ventures

are adjusted against the carrying amount of the investments. When the Group’s share of losses in an

associated company or joint venture equals to or exceeds its interest in the associated company or joint

venture, including any other unsecured non-current receivables, the Group does not recognise further

losses, unless it has obligations to make or has made payments on behalf of the associated company

or joint venture.

Unrealised gains on transactions between the Group and its associated companies and joint ventures

are eliminated to the extent of the Group’s interest in the associated companies and joint ventures.

Unrealised losses are also eliminated unless the transactions provide evidence of an impairment of the

asset transferred. Where necessary, adjustments are made to the fi nancial statements of associated

companies and joint ventures to ensure consistency of accounting policies with those of the Group.


54




(c) Associated companies and joint ventures (continued)

(iii) Disposals

Investments in associated companies and joint ventures are derecognised when the Group loses

signifi cant infl uence and joint control respectively. Any retained equity interest in the entity is remeasured

at its fair value. The difference between the carrying amount of the retained interest at the date when

signifi cant infl uence or joint control is lost and its fair value is recognised in the income statement.

Please refer to the paragraph “Investments in subsidiary and associated companies, and joint ventures”

for the accounting policy on investments in associated companies and joint ventures in the separate

fi nancial statements of the Company.

2.4 Property, plant and equipment

(a) Measurement

Property, plant and equipment are initially recognised at cost and subsequently carried at cost less accumulated

depreciation and accumulated impairment losses.

The cost of an item of property, plant and equipment initially recognised includes its purchase price and

any cost that is directly attributable to bringing the asset to the location and condition necessary for it to be

capable of operating in the manner intended by management.

(b) Depreciation

Renovations in progress is not depreciated. Depreciation is calculated using the straight-line method to

allocate the depreciable amounts of property, plant and equipment over their estimated useful lives as follows:

Leasehold land and building 45 - 93 years

Plant and machinery 10 - 15 years

Furniture, fi ttings and offi ce equipment 5 - 13 years

Motor vehicles 5 years

The residual values, estimated useful lives and depreciation method of property, plant and equipment are

reviewed, and adjusted as appropriate, at each statement of fi nancial position date. The effects of any revision

are recognised in the income statement when the changes arise.


55



2.4 Property, plant and equipment (continued)

(c) Subsequent expenditure

Subsequent expenditure relating to property, plant and equipment that has already been recognised is added

to the carrying amount of the asset only when it is probable that future economic benefi ts associated with the

item will fl ow to the Group and the cost of the item can be measured reliably. All other repair and maintenance

expenses are recognised in the income statement when incurred.

(d) Disposal

On disposal of an item of property, plant and equipment, the difference between the disposal proceeds and

its carrying amount is recognised in the income statement.

2.5 Goodwill on acquisitions

Goodwill on acquisitions of subsidiary companies and businesses represents the excess of (i) the sum of the

consideration transferred, the amount of any non-controlling interest in the acquiree and the acquisition-date fair

value of any previous equity interest in the acquiree over (ii) the fair value of the identifi able net assets acquired.

Goodwill on subsidiary companies is recognised separately as intangible assets and carried at cost less accumulated

impairment losses.

Goodwill on associated companies and joint ventures is included in the carrying amount of the investments.

Gains and losses on the disposal of subsidiary and associated companies, and joint ventures include the carrying

amount of goodwill relating to the entity sold.

2.6 Borrowing costs

Borrowing costs are recognised in the income statement using the effective interest method except for those

costs that are directly attributable to the construction or development of properties. This includes those costs on

borrowings acquired specifi cally for the construction or development of properties, as well as those in relation to

general borrowings used to fi nance the construction or development of properties.

The actual borrowing costs incurred during the period up to the issuance of the temporary occupation permit less

any investment income on temporary investment of these borrowings, are capitalised in the cost of the properties

held for sale and investment properties. Borrowing costs on general borrowings are capitalised by applying a

capitalisation rate to construction or development expenditures that are fi nanced by general borrowings.


56



2.7 Properties held for sale

Properties held for sale are those which are intended for sale in the ordinary course of business. Properties held for

sale which are unsold are carried at the lower of cost and estimated net realisable value. Cost of properties held

for sale includes land, construction and related development costs and interest on borrowings obtained to fi nance

the purchase and construction of the properties. Net realisable value represents the estimated selling price in the

ordinary course of business less costs to complete the development and selling expenses.

Singapore properties held for sale under the Normal Payment Scheme are stated at cost plus attributable profi ts/

losses less progress billings. Progress billings not yet paid by customers are included within “trade and other

receivables”. Where progress billings exceed costs incurred plus recognised profi ts (less recognised losses), the

balance is shown as due to customers on development projects, under “trade and other payables”. When it is

probable that the total development costs will exceed the total revenue, the expected loss is recognised as an

expense immediately.

Singapore properties held for sale under the Deferred Payment Scheme and overseas properties held for sale

are stated at cost and payments received from purchasers prior to completion are included in current liabilities as

“monies received in advance”.

2.8 Investment properties

Investment properties of the Group, principally comprising offi ce buildings, are held for long-term rental yields and

capital appreciation. Investment properties include properties that are being constructed or developed for future

use as investment properties.

Investment properties are initially recognised at cost and subsequently carried at fair value, representing the open

market value determined by independent professional valuers. Changes in fair values are recognised in the income

statement.

Investment properties are subject to renovations or improvements at regular intervals. The cost of major renovations

and improvements is capitalised. The cost of maintenance, repairs and minor improvement is recognised in the

income statement when incurred.

On disposal of an investment property, the difference between the disposal proceeds and the carrying amount is

recognised in the income statement.

2.9 Investments in subsidiary and associated companies, and joint ventures

Investments in subsidiary and associated companies, and joint ventures are carried at cost less accumulated

impairment losses in the Company’s statement of fi nancial position. On disposal of such investments, the difference

between disposal proceeds and the carrying amounts of the investments are recognised in the income statement.


57



2.10 Impairment of non-fi nancial assets

(a) GoodwillGoodwill recognised separately as an intangible asset is tested for impairment annually and whenever there is indication that the goodwill may be impaired.

For the purpose of impairment testing of goodwill, goodwill is allocated to each of the Group’s cash-generating-units (“CGU”) expected to benefi t from synergies arising from the business combination.

An impairment loss is recognised when the carrying amount of a CGU, including the goodwill, exceeds the recoverable amount of the CGU. The recoverable amount of a CGU is the higher of the CGU’s fair value less cost to sell and value-in-use.

The total impairment loss of a CGU is allocated fi rst to reduce the carrying amount of goodwill allocated to the CGU and then to the other assets of the CGU pro-rata on the basis of the carrying amount of each asset in the CGU.

An impairment loss on goodwill is recognised as an expense and is not reversed in a subsequent period.

(b) Intangible assets

Property, plant and equipmentInvestments in subsidiary and associated companies, and joint venturesIntangible assets, property, plant and equipment and investments in subsidiary and associated companies, and joint ventures are tested for impairment whenever there is any objective evidence or indication that these assets may be impaired.

For the purpose of impairment testing, the recoverable amount (i.e. the higher of the fair value less cost to sell and the value-in-use) is determined on an individual asset basis unless the asset does not generate cash infl ows that are largely independent of those from other assets. If this is the case, the recoverable amount is determined for the CGU to which the asset belongs.

If the recoverable amount of the asset (or CGU) is estimated to be less than its carrying amount, the carrying amount of the asset (or CGU) is reduced to its recoverable amount.

The difference between the carrying amount and recoverable amount is recognised as an impairment loss in the income statement, unless the asset is carried at revalued amount, in which case, such impairment loss is treated as a revaluation decrease.

An impairment loss for an asset other than goodwill is reversed only if, there has been a change in the estimates used to determine the asset’s recoverable amount since the last impairment loss was recognised. The carrying amount of this asset is increased to its revised recoverable amount, provided that this amount does not exceed the carrying amount that would have been determined (net of any accumulated amortisation or depreciation) had no impairment loss been recognised for the asset in prior years.

A reversal of impairment loss for an asset other than goodwill is recognised in the income statement, unless the asset is carried at revalued amount, in which case, such reversal is treated as a revaluation increase. However, to the extent that an impairment loss on the same revalued asset was previously recognised as an expense, a reversal of that impairment is also recognised in the income statement.


58



2.11 Financial assets

(a) Classifi cation

The Group classifi es its fi nancial assets in the following categories: at fair value through profi t or loss, loans

and receivables, held-to-maturity, and available-for-sale. The classifi cation depends on the nature of the

asset and the purpose for which the assets were acquired. Management determines the classifi cation of its

fi nancial assets at initial recognition and in the case of assets classifi ed as held-to-maturity, re-evaluates this

designation at each statement of fi nancial position date.

(i) Financial assets at fair value through profi t or loss

This category has two sub-categories: fi nancial assets held for trading, and those designated at fair

value through profi t or loss at inception. A fi nancial asset is classifi ed as held for trading if it is acquired

principally for the purpose of selling in the short term. Financial assets designated as at fair value through

profi t or loss at inception are those that are managed and their performances are evaluated on a fair value

basis, in accordance with a documented Group investment strategy. Derivatives are also categorised

as held for trading unless they are designated as hedges. Assets in this category are presented as

current assets if they are either held for trading or are expected to be realised within 12 months after the

statement of fi nancial position date.

(ii) Loans and receivables

Loans and receivables are non-derivative fi nancial assets with fi xed or determinable payments that are

not quoted in an active market. They are presented as current assets, except for those expected to be

realised later than 12 months after the statement of fi nancial position date which are presented as non-

current assets. Loans and receivables are presented as “trade and other receivables” and “cash and

cash equivalents” on the statement of fi nancial position.

(iii) Held-to-maturity fi nancial assets

Held-to-maturity fi nancial assets are non-derivative fi nancial assets with fi xed or determinable payments

and fi xed maturities that the Group’s management has the positive intention and ability to hold to maturity.

If the Group were to sell other than an insignifi cant amount of held-to-maturity fi nancial assets, the whole

category would be tainted and reclassifi ed as available-for-sale. They are presented as non-current

assets, except for those maturing within 12 months after the statement of fi nancial position date which

are presented as current assets.

(iv) Available-for-sale fi nancial assets

Available-for-sale fi nancial assets are non-derivatives that are either designated in this category or not

classifi ed in any of the other categories. They are presented as non-current assets unless the investment

matures or management intends to dispose of the assets within 12 months after the statement of

fi nancial position date.


59



2.11 Financial assets (continued)

(b) Recognition and derecognitionRegular way purchases and sales of fi nancial assets are recognised on trade-date – the date on which the Group commits to purchase or sell the asset.

Financial assets are derecognised when the rights to receive cash fl ows from the fi nancial assets have expired or have been transferred and the Group has transferred substantially all risks and rewards of ownership. On disposal of a fi nancial asset, the difference between the carrying amount and the sale proceeds is recognised in the income statement. Any amount previously recognised in other comprehensive income relating to that asset is reclassifi ed to the income statement.

(c) Initial measurementFinancial assets are initially recognised at fair value plus transaction costs except for fi nancial assets at fair value through profi t or loss, which are recognised at fair value. Transaction costs for fi nancial assets at fair value through profi t and loss are recognised immediately as expenses.

(d) Subsequent measurementAvailable-for-sale fi nancial assets and fi nancial assets at fair value through profi t or loss are subsequently carried at fair value. Loans and receivables and held-to-maturity fi nancial assets are subsequently carried at amortised cost using the effective interest method.

Changes in the fair values of fi nancial assets at fair value through profi t or loss including the effects of currency translation, interest and dividends, are recognised in the income statement when the changes arise.

Interest and dividend income on available-for-sale fi nancial assets are recognised separately in income statement. Changes in the fair values of available-for-sale debt securities (i.e. monetary items) denominated in foreign currencies are analysed into currency translation differences on the amortised cost of the securities and other changes; the currency translation differences are recognised in the income statement and the other changes are recognised in other comprehensive income and accumulated in the fair value reserve. Changes in fair values of available-for-sale equity securities (i.e. non-monetary items) are recognised in other comprehensive income and accumulated in the fair value reserve, together with the related currency translation differences.

(e) Impairment The Group assesses at each statement of fi nancial position date whether there is objective evidence that a fi nancial asset or a group of fi nancial assets is impaired and recognises an allowance for impairment when such evidence exists.

(i) Loans and receivables/ Held-to-maturity fi nancial assetsSignifi cant fi nancial diffi culties of the debtor, probability that the debtor will enter bankruptcy and default or signifi cant delay in payments are objective evidence that these fi nancial assets are impaired.

The carrying amount of these assets is reduced through the use of an impairment allowance account which is calculated as the difference between the carrying amount and the present value of estimated future cash fl ows, discounted at the original effective interest rate. When the asset becomes uncollectible, it is written off against the allowance account. Subsequent recoveries of amounts previously written off are recognised against the same line item in the income statement.


60



2.11 Financial assets (continued)

(e) Impairment (continued)

(i) Loans and receivables/ Held-to-maturity fi nancial assets (continued)

The impairment allowance is reduced through the income statement in a subsequent period when

the amount of impairment loss decreases and the related decrease can be objectively measured. The

carrying amount of the asset previously impaired is increased to the extent that the new carrying amount

does not exceed the amortised cost had no impairment been recognised in prior periods.

(ii) Available-for-sale fi nancial assets

In addition to the objective evidence of impairment described in note 2.11(e)(i), a signifi cant or prolonged

decline in the fair value of an equity security below its cost is considered as an indicator that the available-

for-sale fi nancial asset is impaired.

If any evidence of impairment exists, the cumulative loss that was previously recognised in other

comprehensive income is reclassifi ed to the income statement. The cumulative loss is measured as

the difference between the acquisition cost (net of any principal repayments and amortisation) and the

current fair value, less any impairment loss previously recognised as an expense. The impairment losses

recognised as an expense on equity securities are not reversed through the income statement.

(f) Offsetting fi nancial instruments

Financial assets and liabilities are offset and the net amount reported in the statement of fi nancial position

when there is a legally enforceable right to offset and there is an intention to settle on a net basis or realise the

asset and settle the liability simultaneously.

2.12 Borrowings

Borrowings are presented as current liabilities unless the Group has an unconditional right to defer settlement

for at least 12 months after the statement of fi nancial position date, in which case they are presented as

non-current liabilities.

Borrowings are initially recognised at fair value (net of transaction costs) and subsequently carried at amortised

cost. Any difference between the proceeds (net of transaction costs) and the redemption value is recognised in the

income statement over the period of the borrowings using the effective interest method.

2.13 Trade and other payables

Trade and other payables represent liabilities for goods and services provided to the Group prior to the end of

fi nancial year which are unpaid. They are classifi ed as current liabilities if payment is due within one year or less

(or in the normal operating cycle of the business if longer). Otherwise, they are presented as non-current liabilities.

Trade and other payables are initially recognised at fair value, and subsequently carried at amortised cost using the

effective interest method.


61



2.14 Fair value estimation of fi nancial assets and liabilities

The fair values of fi nancial instruments traded in active markets (such as exchange-traded and over-the-counter

securities and derivatives) are based on quoted market prices at the statement of fi nancial position date. The

quoted market prices used for fi nancial assets are the current bid prices; the appropriate quoted market prices

used for fi nancial liabilities are the current asking prices.

The fair values of fi nancial instruments that are not traded in an active market are determined by using valuation

techniques. The Group uses a variety of methods and makes assumptions that are based on market conditions

existing at each statement of fi nancial position date. Where appropriate, quoted market prices or dealer quotes

for similar instruments are used. Valuation techniques, such as discounted cash fl ows analysis, are also used to

determine the fair values of the fi nancial instruments.

The fair values of current fi nancial assets and liabilities carried at amortised cost approximate their carrying amounts.

2.15 Leases

(a) Operating leases – when the Group is the lessee

Leases where substantially all risks and rewards incidental to ownership are retained by the lessors are

classifi ed as operating leases. Payments made under operating leases (net of any incentives received from

the lessors) are recognised in the income statement on a straight-line basis over the period of the lease.

(b) Operating leases – when the Group is the lessor

Leases of investment properties where the Group retains substantially all risks and rewards incidental to

ownership are classifi ed as operating leases. Rental income from operating leases (net of any incentives given

to the lessees) is recognised in the income statement on a straight-line basis over the lease term.

Contingent rents are recognised as income in the income statement when earned.

2.16 Inventories

Inventories are carried at the lower of cost and net realisable value. Cost is determined on a weighted average

basis and includes all costs in bringing the inventories to their present location and condition. Net realisable value

is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling

expenses.


62



2.17 Income taxes

Current income tax for current and prior periods is recognised at the amount expected to be paid to or recovered

from the tax authorities, using the tax rates and tax laws that have been enacted or substantively enacted by the

statement of fi nancial position date.

Deferred income tax is recognised for all temporary differences arising between the tax bases of assets and liabilities

and their carrying amounts in the fi nancial statements except when the deferred income tax arises from the initial

recognition of goodwill or an asset or liability in a transaction that is not a business combination and affects neither

accounting nor taxable profi t or loss at the time of the transaction.

A deferred income tax liability is recognised on temporary differences arising on investments in subsidiary and

associated companies, and joint ventures, except where the Group is able to control the timing of the reversal of

the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future.

A deferred income tax asset is recognised to the extent that it is probable that future taxable profi t will be available

against which the deductible temporary differences and tax losses can be utilised.

Deferred income tax is measured:

(i) at the tax rates that are expected to apply when the related deferred income tax asset is realised or the

deferred income tax liability is settled, based on tax rates and tax laws that have been enacted or substantively

enacted by the statement of fi nancial position date; and

(ii) based on the tax consequence that will follow from the manner in which the Group expects, at the statement

of fi nancial position date, to recover or settle the carrying amounts of its assets and liabilities except for

investment properties. Investment property measured at fair value is presumed to be recovered entirely

through sale.

Current and deferred income taxes are recognised as income or expense in the income statement, except to

the extent that the tax arises from a business combination or a transaction which is recognised directly in equity.

Deferred income tax arising from a business combination is adjusted against goodwill on acquisition.


63



2.18 Provisions

Provisions are recognised when the Group has a present legal or constructive obligation as a result of past events,

it is more likely than not that an outfl ow of resources will be required to settle the obligation and the amount has

been reliably estimated.

Provisions are measured at the present value of the expenditure expected to be required to settle the obligation

using a pre-tax discount rate that refl ects the current market assessment of the time value of money and the risks

specifi c to the obligation. The increase in the provision due to the passage of time is recognised as fi nance expense.

Changes in the estimated timing or amount of the expenditure or discount rate are recognised in the income

statement when the changes arise.

2.19 Employee compensation

The Group’s contributions are recognised as employee compensation expense when they are due.

(a) Defi ned contribution plans

Defi ned contribution plans are post-employment benefi t plans under which the Group pays fi xed contributions

into separate entities such as the Central Provident Fund. The Group has no further payment obligations once

the contributions have been paid.

(b) Share-based compensation

The Group operates an equity-settled, share-based compensation plan. The value of the employee services

received in exchange for the grant of options is recognised as an expense with a corresponding increase in

the share option reserve over the vesting period. The total amount to be recognised over the vesting period

is determined by reference to the fair value of the options granted on the date of the grant. Non-market

vesting conditions are included in the estimation of the number of shares under options that are expected

to become exercisable on the vesting date. At each statement of fi nancial position date, the Group revises

its estimates of the number of shares under options that are expected to become exercisable on the vesting

date and recognises the impact of the revision of the estimates in the income statement, with a corresponding

adjustment to the share option reserve over the remaining vesting period.

When the options are exercised, the proceeds received (net of transaction costs) and the related balance

previously recognised in the share option reserve are credited to share capital account, when new ordinary

shares are issued.


64



2.20 Currency translation

(a) Functional and presentation currency

Items included in the fi nancial statements of each entity in the Group are measured using the currency of the

primary economic environment in which the entity operates (“functional currency”). The fi nancial statements

are presented in Singapore Dollars, which is the functional currency of the Company.

(b) Transactions and balances

Transactions in a currency other than the functional currency (“foreign currency”) are translated into the

functional currency using the exchange rates at the dates of the transactions. Currency translation differences

resulting from the settlement of such transactions and from the translation of monetary assets and liabilities

denominated in foreign currencies at the closing rates at the statement of fi nancial position date are recognised

in the income statement. However, in the consolidated fi nancial statements, currency translation differences

arising from borrowings in foreign currencies and other currency instruments designated and qualifying as net

investment hedges and net investment in foreign operations, are recognised in other comprehensive income

and accumulated in the currency translation reserve.

When a foreign operation is disposed of or any loan forming part of the net investment of the foreign operation

is repaid, a proportionate share of the accumulated currency translation differences is reclassifi ed to income

statement, as part of the gain or loss on disposal.

Non-monetary items measured at fair values in foreign currencies are translated using the exchange rates at

the date when the fair values are determined.

(c) Translation of Group entities’ fi nancial statements

The results and fi nancial position of all the Group entities (none of which has the currency of a hyperinfl ationary

economy) that have a functional currency different from the presentation currency are translated into the

presentation currency as follows:

(i) assets and liabilities are translated at the closing exchange rates at the date of the statement of fi nancial

position;

(ii) income and expenses are translated at average exchange rates (unless the average is not a reasonable

approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case

income and expenses are translated using the exchange rates at the dates of the transactions); and

(iii) all resulting currency translation differences are recognised in other comprehensive income and

accumulated in the currency translation reserve. These currency translation differences are reclassifi ed

to the income statement on disposal or partial disposal of the entity giving rise to such reserve.

Goodwill and fair value adjustments arising on the acquisition of foreign operations are treated as assets

and liabilities of the foreign operations and translated at the closing rates at the date of the statement of

fi nancial position.


65



2.21 Segment reporting

Operating segments are reported in a manner consistent with the internal reporting provided to the management

who are responsible for allocating resources and assessing performance of the operating segments.

2.22 Cash and cash equivalents

For the purpose of presentation in the consolidated statement of cash fl ows, cash and cash equivalents include

cash on hand, deposits with fi nancial institutions which are subject to an insignifi cant risk of change in value, and

bank overdrafts. Bank overdrafts are presented as current borrowings on the statement of fi nancial position.

2.23 Share capital

Ordinary shares are classifi ed as equity. Incremental costs directly attributable to the issuance of new ordinary

shares are deducted against the share capital account.

2.24 Dividends to Company’s shareholders

Dividends to Company’s shareholders are recognised when the dividends are approved for payment.

3. CRITICAL ACCOUNTING ESTIMATES, ASSUMPTIONS AND JUDGEMENTS

Estimates, assumptions and judgements are continually evaluated and are based on historical experience and

other factors, including expectations of future events that are believed to be reasonable under the circumstances.

The Group on its own or in reliance on third party experts, applies estimates and judgements in the following

key areas:

(i) the determination of investment property values by independent professional valuers (note 2.8). The carrying

amount of investment properties is disclosed in note 16;

(ii) the assessment of the stage of completion, extent of the construction costs incurred and the estimated total

construction costs of properties held for sale under development (note 2.2(b)) and allowance for foreseeable

losses (note 2.7). The carrying amount of properties held for sale under development is disclosed in note 19;

(iii) the assessment of impairment of investments in associated companies and joint ventures, property, plant

and equipment (note 2.10). The carrying amounts of investments in associated companies and joint

ventures, property, plant and equipment are disclosed in notes 13, 14 and 17 respectively; and

(iv) the assessment of adequacy of provision for income taxes (note 2.17). The carrying amounts of current

income tax and deferred income tax are disclosed in notes 8 and 23 respectively.


66


4. REVENUE

The Group

2012

$’000

2011

$’000

Gross rental income 270,785 287,532Gross revenue from hotel operations 86,083 141,107Sale of properties held for sale 271,567 287,413Gross revenue from information technology operations 73,370 80,594Car parking income and property services fees 9,683 8,858

711,488 805,504

5. COST OF SALES

The Group

2012

$’000

2011

$’000

Property operating expenses 66,478 69,422Cost of sales from hotel operations 85,962 99,406Cost of properties held for sale sold 192,989 211,190Cost of sales from information technology operations 65,683 71,756

411,112 451,774

6. INVESTMENT INCOME

The Group

2012

$’000

2011

$’000

Interest income from:- Bank deposits 318 96- Amount due from an associated company 22 22- Amounts due from joint ventures 1,844 909- Others 328 388

2,512 1,415

Dividend income from unquoted equity investments 2,229 1,6654,741 3,080


67


7. PROFIT BEFORE INCOME TAX

The following items have been included in arriving at profi t before income tax:

The Group

2012

$’000

2011

$’000

Charging/(Crediting):Auditors’ remuneration paid/payable to:

- Auditor of the Company 690 668- Other auditors * 109 108

Other fees paid/payable to auditor of the Company 230 207Wages, salaries and other payroll-related costs 49,824 55,128Employer’s contribution to defi ned contribution plans 7,100 6,927Share option expense 725 569Total employee compensation 57,649 62,624Rental expense - operating leases 931 984Loss on disposal of property, plant and equipment 370 116Depreciation of property, plant and equipment 23,944 22,341Foreign exchange (gain)/loss - net (119) 143Property tax 25,036 24,076Utilities 19,412 20,466Interest expense on loans 3,112 5,566Cost of inventories recognised as an expense 71,554 82,905

* Includes the network of member fi rms of PricewaterhouseCoopers International Limited

8. INCOME TAXES

(a) Income tax expense

The Group

2012

$’000

2011

$’000

(restated)Tax expense/(credit) attributable to profi t is made up of:

- Current income tax (note (b)) 60,003 70,594- Deferred income tax (note 23) (12,024) (15,293)

47,979 55,301

(Over)/Underprovision in prior fi nancial years- Current income tax (note (b)) (1,734) (4,794)- Deferred income tax (note 23) (2,457) 474

(4,191) (4,320)

43,788 50,981


68


8. INCOME TAXES (CONTINUED)

(a) Income tax expense (continued)

The tax expense on the Group’s profi t before tax differs from the theoretical amount that would arise using the

Singapore standard rate of income tax as follows:

The Group

2012

$’000

2011

$’000

(restated)Profi t before income tax 567,574 378,729Less: Share of results of associated companies (68,767) (43,650)Less: Share of results of joint ventures - 500

498,807 335,579

Tax calculated at a statutory tax rate of 17% 84,797 57,048Effects of:

- Different tax rates in other countries 364 9- Singapore statutory tax exemption (436) (409)- Tax incentives (642) -- Expenses not deductible for tax purposes 5,917 23,851- Income not subject to tax (43,199) (25,494)- Utilisation of previously unrecognised deferred income tax assets (693) -- Deferred income tax assets not recognised 1,871 296

Tax expense 47,979 55,301

(b) Movements in current income tax liabilities


2012

$’000

2011

$’000

2012

$’000

2011

$’000

Beginning of fi nancial year 85,513 83,729 696 673Currency translation differences (600) 603 - -Income tax (paid)/refunded (65,879) (64,619) 5 23Tax expense (note (a)) 60,003 70,594 - -Overprovision in prior fi nancial years (note (a)) (1,734) (4,794) (701) -End of fi nancial year 77,303 85,513 - 696


69


8. INCOME TAXES (CONTINUED)

(c) There is no tax charge relating to the components of other comprehensive income.

9. NET ATTRIBUTABLE PROFIT

The net profi t attributable to equity holders of the Company can be analysed as follows:

The Group

2012

$’000

2011

$’000

(restated)

Net profi t before fair value gain/(loss) on investment properties (note 10) 168,238 200,230Fair value gain/(loss) on investment properties held by subsidiary and associated

companies net of non-controlling interests included in:- Fair value gain on investment properties 247,327 21,366- Share of results of associated companies 36,610 12,805- Non-controlling interests (60,620) (39,044)

223,317 (4,873)Net attributable profi t 391,555 195,357

10. EARNINGS PER SHARE

Basic earnings per share is calculated by dividing the net profi t attributable to equity holders of the Company by the

weighted average number of ordinary shares in issue during the fi nancial year.

Diluted earnings per share amounts are calculated by dividing the net profi t attributable to equity holders of the

Company by the weighted average number of ordinary shares outstanding during the year plus the weighted

average number of ordinary shares that would be issued on the conversion of all dilutive potential shares into

ordinary shares. The Company’s dilutive potential ordinary shares are its share options.

The weighted average number of shares in issue is adjusted as if all share options that are dilutive were exercised.

The number of shares that could have been issued upon the exercise of all dilutive share options less the number

of shares that could have been issued at fair value (determined as the Company’s average share price for the

fi nancial year) for the same total proceeds is added to the denominator as the number of shares was issued for no

consideration. No adjustment is made to the net profi t.


70


10. EARNINGS PER SHARE (CONTINUED)

The Group

2012

$’000

2011

$’000

(restated)

Net profi t attributable to equity holders of the Company ($’000) 391,555 195,357

Weighted average number of ordinary shares in issue for basic earnings per share (’000) 1,378,077 1,377,732

Adjustment for share options (’000) 260 422Weighted average number of ordinary shares in issue

for diluted earnings per share (’000) 1,378,337 1,378,154

Basic and diluted earnings per share (cents per share)- excluding fair value gain/loss on investment properties held by subsidiary

and associated companies (note 9) 12.2 cents 14.5 cents- including fair value gain/loss on investment properties held

by subsidiary and associated companies 28.4 cents 14.2 cents

11. OTHER RECEIVABLES


2012

$’000

2011

$’000

2012

$’000

2011

$’000

Amounts due from:- an associated company (note (a)) 771 749 - -- joint ventures (note (b)) 151,808 72,152 - -- subsidiary companies (note (c)) - - 1,183,336 1,246,931

Less: Allowance for impairment

in value of receivables - - (15,559) (15,559)- - 1,167,777 1,231,372

Others 480 480 135 135153,059 73,381 1,167,912 1,231,507

(a) Amount due from an associated company

The amount due from an associated company for the Group is unsecured, not repayable within the next 12

months and is interest-bearing at fl oating rate. At the statement of fi nancial position date, the carrying amount

of amount due from an associated company approximates its fair value.


71


11. OTHER RECEIVABLES (CONTINUED)

(b) Amounts due from joint ventures

The amounts due from joint ventures for the Group are subordinated to the borrowings of the joint ventures,

not repayable within the next 12 months and are interest-bearing at fl oating rate. At the statement of fi nancial

position date, the carrying amounts of amounts due from joint ventures approximate their fair values.

(c) Amounts due from subsidiary companies

The amounts due from subsidiary companies are unsecured, not repayable within the next 12 months and

are interest-bearing except for amounts totalling $253,826,000 (2011: $265,513,000) which are interest-free.

At the statement of fi nancial position date, the carrying amounts of amounts due from subsidiary companies

approximate their fair values. Interest is charged on amounts due from certain subsidiary companies and

is based on interest incurred by the Company in respect of bank loans obtained on behalf of these

subsidiary companies.

12. AVAILABLE-FOR-SALE FINANCIAL ASSETS

The Group

2012

$’000

2011

$’000

Unquoted equity investments 12,045 12,045

13. INVESTMENTS IN ASSOCIATED COMPANIES

The Group

2012

$’000

2011

$’000

2010

$’000

(restated) (restated)Unquoted equity investments, at cost 293,946 293,946 183,059Share of post acquisition reserves 133,092 88,402 52,201

427,038 382,348 235,260

The restated summarised fi nancial information of associated

companies, not adjusted for the proportionate ownership

interest held by the Group, is as follows: - Assets 1,962,391 1,829,999 1,357,005 - Liabilities 427,836 504,612 536,105 - Revenues 279,278 262,826 350,864 - Net profi t 269,991 143,399 150,155

Details of associated companies are included in note 34.


72


14. INVESTMENTS IN JOINT VENTURES

The Group

2012

$’000

2011

$’000

Unquoted equity investments, at cost 500 500Share of post acquisition reserves (500) (500)

- -

The summarised fi nancial information of joint ventures, based on the

proportionate ownership interest held by the Group, is as follows: - Assets 303,017 174,623 - Liabilities 303,017 174,623 - Revenues 54,759 - - Net loss - 500

A subsidiary company of the Group has provided several undertakings on cost overrun, interest shortfall, security

margin and project completion on a joint venture basis in respect of term loans drawn down by the joint ventures.

As at 31 December 2012, the total outstanding term loans was $289,000,000 (2011: $195,000,000).

Details of joint ventures are included in note 34.

15. INVESTMENTS IN SUBSIDIARY COMPANIES

The Company

2012

$’000

2011

$’000

Unquoted equity investments, at cost 1,230,212 1,229,212Less: Allowance for impairment in value of investments (3,093) (1,693)

1,227,119 1,227,519

Details of subsidiary companies are included in note 34.


73


16. INVESTMENT PROPERTIES

The Group

2012

$’000

2011

$’000

Completed leasehold properties, at valuation:Beginning of fi nancial year 4,951,900 5,458,000Reclassify to property under development - (268,000)Reclassify to properties held for sale - (454,000)Redevelopment of an investment property - 183,871Upgrading 10,126 10,663Fair value gain 184,274 21,366End of fi nancial year 5,146,300 4,951,900

Property under development, at valuation:Beginning of fi nancial year 268,000 -Additions 7,947 -Fair value gain 63,053 -Reclassify from completed leasehold properties - 268,000End of fi nancial year 339,000 268,000

5,485,300 5,219,900

Borrowing costs of $1,994,000 (2011: $907,000) for the redevelopment of an investment property were capitalised

during the fi nancial year. A capitalisation rate of 1.0% to 1.1% (2011: 0.9% to 1.1%) per annum was used in 2012,

representing the borrowing costs of the loans used to fi nance the project.

(a) The Group’s completed investment properties consist of the following:

Name of building/

location Description

Tenure

of land

Unexpired

term of

lease

Stamford Court 4-storey offi ce building with shops on a land

area of 2,072 square metres. The net area in this

building is 5,990 square metres.

99-year lease

from 1994

81 years61 Stamford RoadSingapore 178892

West Mall Retail and family entertainment complex on a

land area of 9,890 square metres. The net area

in this complex is 17,042 square metres.

99-year lease

from 1995

82 years1 Bukit Batok Central LinkSingapore 658713

Singapore Land Tower 47-storey offi ce building on a land area of 5,064

square metres. The net area in this building is

57,500 square metres.

999-year

lease from

1826

813 years50 Raffl es PlaceSingapore 048623

Clifford Centre 29-storey shopping cum offi ce building on a land

area of 3,343 square metres. The net area in this


999-year

lease from

1826

813 years24 Raffl es PlaceSingapore 048621


74


16. INVESTMENT PROPERTIES (CONTINUED)

(a) The Group’s completed investment properties consist of the following: (continued)

Name of building/

location Description

Tenure

of land

Unexpired

term of

lease

The Gateway Two 37-storey offi ce buildings on a land area

of 22,381 square metres. The net area in these

buildings is 69,803 square metres.

99-year lease

from 1982

69 years150/152 Beach RoadSingapore 189720/1

SGX Centre 2 29-storey offi ce building on a land area of 2,970

square metres. The net area in this building

(inclusive of 3,336 square metres in SGX Centre 1)

is 25,800 square metres.

99-year lease

from 1995

82 years4 Shenton WaySingapore 068807

Abacus Plaza 8-storey offi ce building on a land area of 2,614



99-year lease

from 1996

83 years3 Tampines Central 1Singapore 529540

Tampines Plaza 8-storey offi ce building on a land area of 2,613



99-year lease

from 1996

83 years5 Tampines Central 1Singapore 529541

Marina Square Retail Mall 4-storey retail mall with a retail underpass. The

net area in this building is 61,954 square metres.

99-year lease

from 1980

67 years6 Raffl es BoulevardSingapore 039594

Marina Bayfront 6-storey offi ce building. The net area in this


99-year lease

from 1980

67 years2 Raffl es LinkSingapore 039392

Marina Square Retail Mall and Marina Bayfront are components of an integrated commercial complex known

as Marina Square.


75


16. INVESTMENT PROPERTIES (CONTINUED)

(b) The Group’s property under development is as follows:

Location of site Description

Tenure

of land

Unexpired

term of

lease

5 Shenton Way

Singapore 068808

A proposed development comprising

commercial space with a gross fl oor area of

30,933 square metres. This is part of a mixed

development with the residential component,

V on Shenton, classifi ed under properties held

for sale.

99-year lease

from 2011

98 years

Investment properties are carried at fair values at the statement of fi nancial position date as determined by

independent professional valuers. Valuations are made based on the properties’ highest-and-best use using

various valuation methods such as Direct Market Comparison Method, Income Method and Residual Method.

In determining the fair value, the valuers have used valuation techniques which involve certain estimates. Key

assumptions used in determining the fair value of the investment properties include capitalisation rates, estimated

rental rates, gross development value and construction cost.

Investment properties are leased to non-related parties under operating leases (note 28(c)).


76


17. PROPERTY, PLANT AND EQUIPMENT

Leasehold land andbuilding

$’000

Plant and machinery

$’000

Furniture, fi ttings

and offi ce equipment

$’000

Motor vehicles

$’000

Renovations in progress

$’000Total$’000

The Group

2012CostBeginning of fi nancial year 395,645 41,823 111,362 1,231 2,462 552,523Currency translation differences (2,069) (1,784) (2,959) (33) - (6,845)Additions - 1,352 1,153 3 89,958 92,466Transfer in/(out) - 12,094 80,080 - (92,174) -Disposals (289) (52) (17,260) - - (17,601)End of fi nancial year 393,287 53,433 172,376 1,201 246 620,543

Accumulated depreciationBeginning of fi nancial year 25,725 5,976 40,578 470 - 72,749Currency translation differences (97) (213) (539) (3) - (852)Depreciation charge 6,112 2,539 15,204 89 - 23,944Disposals (21) - (17,162) - - (17,183)End of fi nancial year 31,719 8,302 38,081 556 - 78,658

Net book valueEnd of fi nancial year 361,568 45,131 134,295 645 246 541,885

2011CostBeginning of fi nancial year 393,563 41,585 109,826 1,374 156 546,504Currency translation differences 2,082 1,794 2,977 33 - 6,886Additions - - 1,730 253 2,647 4,630Transfer in/(out) - 65 276 - (341) -Disposals - (1,621) (3,447) (429) - (5,497)End of fi nancial year 395,645 41,823 111,362 1,231 2,462 552,523

Accumulated depreciationBeginning of fi nancial year 19,535 5,160 29,523 768 - 54,986Currency translation differences 88 195 488 2 - 773Depreciation charge 6,102 2,242 13,877 120 - 22,341Disposals - (1,621) (3,310) (420) - (5,351)End of fi nancial year 25,725 5,976 40,578 470 - 72,749

Net book valueEnd of fi nancial year 369,920 35,847 70,784 761 2,462 479,774


77


17. PROPERTY, PLANT AND EQUIPMENT (CONTINUED)

Furniture, fi ttings

and offi ce

equipment

$’000

Motor vehicles

$’000

Total

$’000

The Company

2012CostBeginning of fi nancial year 681 237 918Additions 60 - 60Disposals (3) - (3)End of fi nancial year 738 237 975

Accumulated depreciationBeginning of fi nancial year 134 47 181Depreciation charge 70 47 117Disposals (3) - (3)End of fi nancial year 201 94 295

Net book valueEnd of fi nancial year 537 143 680

2011CostBeginning of fi nancial year 696 208 904Additions 493 237 730Disposals (508) (208) (716)End of fi nancial year 681 237 918

Accumulated depreciationBeginning of fi nancial year 553 208 761Depreciation charge 32 47 79Disposals (451) (208) (659)End of fi nancial year 134 47 181

Net book valueEnd of fi nancial year 547 190 737


78


18. CASH AND CASH EQUIVALENTS


2012

$’000

2011

$’000

2012

$’000

2011

$’000

Cash at bank and on hand 72,552 63,263 912 565Short-term bank deposits 35,921 36,789 - -

108,473 100,052 912 565

Included in cash and cash equivalents of the Group, are amounts of $34,371,000 (2011: $11,188,000) maintained

in the Project Accounts. The funds in the Project Accounts can only be applied in accordance with Housing

Developers (Project Account) Rules (1997 Ed.).

For the purpose of presenting the consolidated statement of cash fl ows, cash and cash equivalents comprise

the following:

The Group

2012

$’000

2011

$’000

Cash and cash equivalents (as above) 108,473 100,052Less: Bank deposits pledged (5,570) -Cash and cash equivalents per consolidated statement of cash fl ows 102,903 100,052

Bank deposits are pledged as security for certain borrowing (note 22(b)(ii)).

19. PROPERTIES HELD FOR SALE

The Group

2012

$’000

2011

$’000

Properties held for sale accounted for using the completion of construction method 90,233 139,337Properties held for sale accounted for using the percentage of completion method 689,065 739,595

779,298 878,932


79


19. PROPERTIES HELD FOR SALE (CONTINUED)

Properties held for sale accounted for using percentage of completion method can be analysed as follows:

The Group

2012

$’000

2011

$’000

Cost 795,442 974,134

Add: Development profi ts recognised on percentage of completion method - 83,849Less: Progress billings (106,377) (318,388)

689,065 739,595

Progress billings relating to properties held for sale sold but accounted for using the completion of construction

method has been classifi ed as “monies received in advance” under current trade and other payables.

Borrowing costs of $4,835,000 (2011: $2,236,000) were capitalised during the fi nancial year. A capitalisation rate

of 1.0% to 1.7% (2011: 0.8% to 7.2%) per annum was used in 2012, representing the borrowing costs of the loans

used to fi nance the projects.

Details of the Group’s properties held for sale are as follows:

Property Title

Percentage of

completion at

31.12.2012/

Expected year of

completion

Site area/Gross

fl oor area (sqm)

Group’s

effective

interest %

The Excellency (Chengdu) Leasehold 100%/2012 7,566/77,000 80

The Trizon Freehold 100%/2012 18,153/38,122 80

Mon Jervois Leasehold Nil/2016 8,958/12,542 80

Development site at Farrer Drive Leasehold Nil/2016 6,268/10,030 80

Development site at Alexandra View Leasehold Nil/2017 6,501/31,857 80

V on Shenton Leasehold Nil/2017 */55,850 100

* The residential component under this site, together with the commercial component (classifi ed under investment

properties) are situated on a site area of 6,778 square metres.


80


20. TRADE AND OTHER RECEIVABLES


2012

$’000

2011

$’000

2012

$’000

2011

$’000

Trade receivables 33,107 30,612 - -Less: Allowance for impairment of receivables (1,263) (2,099) - -

31,844 28,513 - -

Accrued receivables 49,751 24,081 - -Deposits 920 750 333 496Prepaid taxes 2,200 8,166 - -Prepayments 1,138 12,167 - -Other receivables 11,862 22,802 793 909

97,715 96,479 1,126 1,405

Accrued receivables represent the balance of sales consideration to be billed for properties held for sale that has

obtained Temporary Occupation Permit.

21. TRADE AND OTHER PAYABLES


2012

$’000

2011

$’000

2012

$’000

2011

$’000

(a) CurrentMonies received in advance 33,913 106,367 - -Rental deposits 24,616 22,852 - -Trade payables 50,210 75,886 299 420Other payables 7,443 10,258 536 495Accrued operating expenses 67,496 58,608 2,338 2,337

183,678 273,971 3,173 3,252

(b) Non-currentRental deposits 48,221 52,788 - -Amounts due to an associated company 1,624 1,624 1,624 1,624Amounts due to subsidiary companies - - 149,538 152,894

49,845 54,412 151,162 154,518

The amounts due to associated and subsidiary companies are unsecured, not repayable within the next 12 months

and are interest-free. At the statement of fi nancial position date, the carrying amounts of non-current trade and

other payables approximate their fair values.


81


22. BORROWINGS


Note

2012

$’000

2011

$’000

2012

$’000

2011

$’000

(a) CurrentShort-term bank loans (unsecured) (i) 579,270 738,125 443,870 505,425

Term loan (secured) (ii) 2,621 - - -Term loan (secured) (iii) 4,900 2,080 - -Revolving credit loans (unsecured) (iv) - 4,000 - -

586,791 744,205 443,870 505,425

(b) Non-current Term loans (secured) (ii) 160,000 - - - Term loan (secured) (iii) 5,880 11,440 - - Term loan (secured) (v) 30,000 30,000 - -

Revolving credit loans (secured) (v) 74,000 - - -269,880 41,440 - -

Total borrowings 856,671 785,645 443,870 505,425

(i) The unsecured short-term loans are drawn under various uncommitted fl oating rate revolving credit facilities.

(ii) The term loans are secured by way of legal mortgages over certain property development projects with

carrying amounts of $250,882,000 (2011: Nil) and deposits pledged (note 18).

In respect of the non-current term loans of $160,000,000 (2011: Nil), a subsidiary company of the Group has

provided several undertakings on cost overrun, interest shortfall, security margin and projection completion.

(iii) The term loan is secured by way of a legal mortgage over certain property, plant and equipment of a subsidiary

company with carrying amounts of $96,546,000 (2011: $109,350,000).

(iv) In 2011, the revolving credit loans taken by a subsidiary company was obtained by way of a negative pledge

over all the assets of the subsidiary company.

(v) The term loan and revolving credit loans are secured by way of an open debenture and legal mortgages

over certain property, plant and equipment of a subsidiary company with carrying amounts of $443,197,000

(2011: $368,369,000). The amounts advanced under the revolving credit facilities are included as non-current

liabilities as the Group has the discretion to rollover the facilities for at least 12 months after the statement of

fi nancial position date. For the purposes of liquidity risk disclosure (note 29(c)), the revolving credit facilities

has been classifi ed as current as the disclosure is based on actual contractual drawdowns to be repaid within

a year.


82


22. BORROWINGS (CONTINUED)

(c) Carrying amounts and fair values

The carrying amounts of non-current borrowings approximate their fair values. The fair values are based on

discounted cash fl ows using a discount rate of 1.1% to 6.7% (2011: 1.0% to 7.2%) based upon the prevailing

market rates.

The exposure of the borrowings of the Group and of the Company to interest rate changes and the contractual

repricing dates at the statement of fi nancial position dates are as follows:


2012

$’000

2011

$’000

2012

$’000

2011

$’000

6 months or less 856,671 755,645 443,870 505,4256 - 12 months - 30,000 - -

856,671 785,645 443,870 505,425

23. DEFERRED INCOME TAXES

The Group

2012

$’000

2011

$’000

2010

$’000

Deferred income tax liabilities: (restated) (restated) - to be settled within 1 year - 11,504 22,793 - to be settled after 1 year 50,640 53,737 57,144

50,640 65,241 79,937

The movement in the deferred income tax account is as follows:

The Group

2012

$’000

2011

$’000

2010

$’000

(restated) (restated)Beginning of fi nancial year

- as previously reported 552,928 581,391 465,801 - effect of adopting FRS 12 (487,687) (501,454) (386,391)

Beginning of fi nancial year, as restated 65,241 79,937 79,410Currency translation differences (120) 123 (6)Credited to income statement (note 8(a)) (12,024) (15,293) (4,143)(Over)/Underprovision in prior fi nancial years (note 8(a)) (2,457) 474 4,676End of fi nancial year 50,640 65,241 79,937


83


23. DEFERRED INCOME TAXES (CONTINUED)

Deferred income tax assets are recognised for tax losses carried forward to the extent that realisation of the related tax benefi ts through future taxable profi ts is probable. The Group has unrecognised tax losses in certain subsidiary companies of approximately $29,113,000 (2011: $11,732,000), which can be carried forward and used to offset against future taxable income subject to meeting certain statutory requirements by those companies with unrecognised tax losses in their respective countries of incorporation. These tax losses have no expiry dates.

The movements in the deferred income tax assets and liabilities (prior to offsetting of balances within the same tax jurisdiction) during the fi nancial year are as follows:

The Group

Deferred income tax liabilities

Deferred development

profi ts$’000

Fair value gain

$’000

Accelerated tax

depreciation$’000

Total$’000

2012Beginning of fi nancial year

- as previously reported 11,504 513,387 28,037 552,928 - effect of adopting FRS 12 - (487,687) - (487,687)

Beginning of fi nancial year, as restated 11,504 25,700 28,037 65,241Currency translation differences - - (120) (120)Credited to income statement (11,504) (420) (100) (12,024)Overprovision in prior fi nancial years - - (2,457) (2,457)End of fi nancial year - 25,280 25,360 50,640

2011 (restated)Beginning of fi nancial year


Beginning of fi nancial year, as restated 25,843 26,120 27,974 79,937Currency translation differences - - 123 123Credited to income statement (14,339) (420) (534) (15,293)Underprovision in prior fi nancial years - - 474 474End of fi nancial year 11,504 25,700 28,037 65,241

2010 (restated)Beginning of fi nancial year


Beginning of fi nancial year, as restated 31,903 27,695 19,812 79,410Currency translation differences - - (6) (6)(Credited)/Charged to income statement (6,060) (420) 2,337 (4,143)(Over)/Underprovision in prior fi nancial years - (1,155) 5,831 4,676End of fi nancial year 25,843 26,120 27,974 79,937


84


24. SHARE CAPITAL

The Group and the Company

2012 2011No. of

ordinary

shares Amount

No. of

ordinary

shares Amount

’000 $’000 ’000 $’000

Beginning of fi nancial year 1,377,815 1,401,382 1,377,481 1,400,927Shares issued 300 510 334 455End of fi nancial year 1,378,115 1,401,892 1,377,815 1,401,382

All issued shares are fully paid. There is no par value for these ordinary shares.

The UIC Share Option Scheme (“ESOS”) to subscribe for ordinary shares of the Company, was approved by the shareholders of the Company on 18 May 2001. The ESOS had expired on 17 May 2011 and was continued with the shareholders’ approval at an annual general meeting held on 27 April 2011, for a further period of 10 years from 18 May 2011 to 17 May 2021. Other than the extension, there is no change in any other rules of the ESOS.

Under the terms of the ESOS, the total number of shares granted shall not exceed 5% of the issued share capital of the Company on the day immediately preceding the offer date of the ESOS. The exercise price is equal to the average of the last done prices per share of the Company’s ordinary shares on the Singapore Exchange Securities Trading Limited (“SGX–ST”) for fi ve market days immediately preceding the date of the offer.

On 27 February 2012 (“Offer Date”), options were granted pursuant to the ESOS to the executives of the Company and its subsidiary companies to subscribe for 934,000 ordinary shares in the Company at the exercise price of $2.73 per ordinary share.

Principal terms of the ESOS are set out below:

(i) only full time confi rmed executives of the Company or any of its subsidiary companies (including executive directors) are eligible for the grant of options;

(ii) the ESOS shall be in force at the discretion of the Remuneration Committee (“RC”) subject to a maximum period of 10 years and may be continued with the approval of the shareholders;

(iii) all options granted shall be exercisable, in whole or in part (only in respect of 1,000 shares or any multiple thereof), before the tenth anniversary of the Offer Date and in accordance with the following vesting schedule:

Vesting SchedulePercentage of shares over which

options are exercisable

On or after the second anniversary of the Offer Date 50%On or after the third anniversary of the Offer Date 25%On or after the fourth anniversary of the Offer Date 25%

The vesting and exercising of vested or unexercised options are governed by conditions set out

in the ESOS; and


85


24. SHARE CAPITAL (CONTINUED)

Principal terms of the ESOS are set out below: (continued)

(iv) participants in the ESOS, shall not, except with the prior approval of the RC in its absolute discretion, be entitled

to participate in any other share option schemes or share incentive schemes implemented by companies

within or outside the Group. The settlement of options are subject to conditions as set out in the ESOS.

Movement in the number of unissued ordinary shares under option and their exercise price are as follows:

Beginning

of fi nancial

year

Granted

during

fi nancial

year

Cancelled

during

fi nancial

year

Exercised

during

fi nancial

year

End of

fi nancial

year

Exercise

price

per share

Date of

expiry

The Group and the Company

20122012 Options - 934,000 - - 934,000 $2.73 26.2.20222011 Options 824,000 - (35,000) - 789,000 $2.78 28.2.20212010 Options 584,000 - (16,000) (196,000) 372,000 $2.03 25.2.20202009 Options 338,000 - (8,000) (104,000) 226,000 $1.07 3.5.20192008 Options 804,000 - (48,000) - 756,000 $2.91 9.3.20182007 Options 1,782,000 - (144,000) - 1,638,000 $2.70 4.3.2017

4,332,000 934,000 (251,000) (300,000) 4,715,000

20112011 Options - 894,000 (70,000) - 824,000 $2.78 28.2.20212010 Options 656,000 - (72,000) - 584,000 $2.03 25.2.20202009 Options 648,000 - (36,000) (274,000) 338,000 $1.07 3.5.20192008 Options 900,000 - (96,000) - 804,000 $2.91 9.3.20182007 Options 2,046,000 - (204,000) (60,000) 1,782,000 $2.70 4.3.2017

4,250,000 894,000 (478,000) (334,000) 4,332,000

Out of the unexercised options for 4,715,000 (2011: 4,332,000) shares, options for 2,580,000 (2011: 2,435,000)

shares are exercisable at the statement of fi nancial position date.

The weighted average share price at the time of exercise was $2.75 (2011: $2.83) per share.

The fair value of options granted on 27 February 2012 (2011: 1 March 2011), determined using the Binomial

Valuation Model, was $887,000 (2011: $978,000). The signifi cant inputs into the model were share price of $2.73

(2011: $2.80) at the grant date, exercise price of $2.73 (2011: $2.78), expected dividend yield of 1.10% (2011:

1.07%), standard deviation of expected share price returns of 30% (2011: 31%), the option life shown above and

annual risk-free interest rate of 1.5% (2011: 2.6%). The volatility measured as the standard deviation of expected

share price returns was based on statistical analysis of share prices over the last fi ve years.


86


25. DIVIDENDS

The Group and

the Company

2012

$’000

2011

$’000

Final tax-exempt (one-tier) dividend paid in respect of the previous fi nancial year

of 3.0 cents per share (2011: 3.0 cents per share) 41,342 41,334

At the Annual General Meeting to be held on 26 April 2013, a fi nal tax-exempt (one-tier) dividend of 3.0 cents per

share will be recommended. Based on the number of issued shares as at 31 December 2012, this will amount to

$41,343,000 which will be accounted for in shareholders’ equity as an appropriation of retained earnings in the

fi nancial year ending 31 December 2013.

26. RETAINED EARNINGS

(a) Retained earnings of the Group included accumulated fair value gains on investment properties held by

subsidiary and associated companies net of non-controlling interests amounting to $1,249,742,000 (restated

2011: $1,026,425,000).

(b) Reserves of the Company comprise of retained earnings of $393,744,000 (2011: $393,277,000) and share

option reserve of $3,908,000 (2011: $3,183,000), of which the movement in retained earnings for the Company

is as follows:

The Company

2012

$’000

2011

$’000

Beginning of fi nancial year 393,277 391,702Total comprehensive income - net profi t 41,809 42,909Dividends paid (note 25) (41,342) (41,334)End of fi nancial year 393,744 393,277


87


27. OTHER RESERVES

The Group

2012

$’000

2011

$’000

(a) Foreign currency reserve

Beginning of fi nancial year 9,414 (690)Net exchange differences on translation of fi nancial statements of

foreign entities (11,036) 10,104End of fi nancial year (1,622) 9,414

(b) Share option reserve

Employee share option schemeBeginning of fi nancial year 3,183 2,614Value of employee services 725 569End of fi nancial year 3,908 3,183

Total 2,286 12,597

28. COMMITMENTS

The Group

2012

$’000

2011

$’000

(a) Capital commitmentsCapital expenditure contracted for but not recognised in the fi nancial

statements in respect of:- investment properties 139,483 1,838- property, plant and equipment - 1,664

139,483 3,502

(b) Operating lease commitments - where the Group is a lessee

The Group leases certain space under non-cancellable operating lease agreements. The leases have varying terms, escalation clauses and renewal rights.

The future minimum lease payables under non-cancellable operating leases contracted for at the statement of fi nancial position date but not recognised as liabilities, are as follows:

The Group

2012

$’000

2011

$’000

Not later than 1 year 951 979Between 1 and 5 years 495 1,407

1,446 2,386


88


28. COMMITMENTS (CONTINUED)

(c) Operating lease commitments - where the Group is a lessor

The Group has entered into commercial property leases on its investment property portfolio, consisting of the

Group’s offi ce buildings and retail malls.

The future minimum lease receivables under non-cancellable operating leases contracted for at the statement

of fi nancial position date but not recognised as receivables, are as follows:

The Group

2012

$’000

2011

$’000

Not later than 1 year 223,853 229,906Between 1 and 5 years 233,761 254,822Later than 5 years 1,586 -

459,200 484,728

29. FINANCIAL RISK MANAGEMENT

Financial risk factors

The Group’s activities expose it to market risk (including currency risk and interest rate risk), credit risk and liquidity

risk. The Group’s overall risk management strategy seeks to minimise any adverse effects from the unpredictability

of fi nancial markets on the Group’s fi nancial performance.

Risk management is carried out in accordance with established policies and guidelines approved by the Board

of Directors.


89


29. FINANCIAL RISK MANAGEMENT (CONTINUED)

(a) Market risk

(i) Currency risk

The Group operates dominantly in Singapore, with some operations in the People’s Republic of

China. Entities in the Group transact in currencies other than their respective functional currencies

(“foreign currencies”).

Currency risk arises when transactions are denominated in foreign currencies. As the entities in the

Group transact substantially in their respective functional currencies, the currency exposure at the Group

is minimal.

In addition, the Group is exposed to currency risk on its monetary assets and liabilities denominated

in foreign currencies when they are translated at the statement of fi nancial position date. As these

assets and liabilities are substantially denominated in their respective functional currencies, the currency

exposure is minimal.

The Company’s exposure to currency risk is minimal as revenue and expenses and assets and liabilities

are substantially denominated in Singapore Dollars.

(ii) Cash fl ow and fair value interest rate risks

Cash fl ow interest rate risk is the risk that the future cash fl ows of a fi nancial instrument will fl uctuate

because of changes in market interest rates. Fair value interest rate risk is the risk that the fair value of a

fi nancial instrument will fl uctuate due to changes in market interest rates. As the Group has no signifi cant

interest-bearing assets, the Group’s income and operating cash fl ows are substantially independent of

changes in market interest rates.

The Group’s interest rate risks mainly arise from borrowings. Borrowings at variable rates expose

the Group to cash fl ow interest rate risk. Borrowings obtained at fi xed rates expose the Group to fair

value interest rate risk. The Group monitors the interest rates on borrowings closely to ensure that the

borrowings are maintained at favourable rates.

If the interest rates increase/decrease by 25 basis points (2011: 25 basis points) with all other variables

remaining constant, the profi t after tax for the Group will be lower/higher by $261,000 (2011: $773,000)

as a result of higher/lower interest expense on these borrowings.

The Company does not have any exposure to the interest rates as all its fi nance expenses are recharged

to the subsidiary companies.


90



(b) Credit risk

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in fi nancial

loss to the Group. For trade receivables, the Group adopts the policy of dealing only with customers of

appropriate credit standing and history, and obtaining suffi cient security where appropriate to mitigate credit

risk. For the property investment segment, generally advance deposits of at least 3 months rental (or equivalent

amount in bankers’ guarantee) are obtained for all tenancies. For the property trading segment, progress

billings from customers are followed up, and appropriate action taken promptly in instances of non-payment

or delay in payment. For other fi nancial assets, the Group adopts the policy of dealing only with high credit

quality counterparties.

Other than amounts due from subsidiary and associated companies, and joint ventures, concentration of

credit risk relating to trade receivables is limited due to the Group’s many varied customers.

As the Group and the Company do not hold any collateral, the maximum exposure to credit risk for each class

of fi nancial instruments is the carrying amount of that class of fi nancial instruments presented on the statement

of fi nancial position.

The Group’s and the Company’s major classes of fi nancial assets are bank deposits, trade receivables and

other non-current receivables.

The Group’s and the Company’s other non-current receivables comprise amounts due from associated

company and joint ventures and amounts due from subsidiary companies respectively. These receivables are

assessed for their recoverability and any recognition/writeback of allowance for impairment are made where

necessary. Information regarding these receivables is disclosed in note 11.

The credit risk profi le of the Group’s trade receivables and accrued receivables at the statement of fi nancial

position date is as follows:

The Group

2012

$’000

2011

$’000

By segment of businessProperty investment 6,821 4,689Property trading 53,649 29,854Hotel operations 9,715 5,852Technologies 11,410 12,199

81,595 52,594


91



(b) Credit risk (continued)

(i) Financial assets that are neither past due nor impaired

Bank deposits that are neither past due nor impaired are mainly deposits with banks with high credit-

ratings assigned by international credit-rating agencies. Trade receivables that are neither past due nor

impaired are substantially companies with a good collection track record with the Group.

(ii) Financial assets that are past due and/or impaired

There is no other signifi cant class of fi nancial assets that is past due and/or impaired except for

trade receivables.

The age analysis of trade receivables past due but not impaired is as follows:

The Group

2012

$’000

2011

$’000

Past due 0 to 1 month 6,403 5,404Past due 1 to 2 months 2,893 2,511Past due 2 to 3 months 1,285 533Past due over 3 months 2,124 1,345

12,705 9,793

The carrying amount of trade receivables individually determined to be impaired and the movement in the

related allowance for impairment are as follows:

The Group

2012

$’000

2011

$’000

Beginning of fi nancial year 2,099 1,733Allowance made 54 787Allowance utilised (538) (202)Allowance written-back (352) (219)End of fi nancial year 1,263 2,099

Trade receivables that are individually determined to be impaired at the statement of fi nancial position

date relate to debtors that are in signifi cant fi nancial diffi culties and have defaulted on payments despite

attempts to recover the debts owing through legal means where appropriate. These receivables are not

secured by any collateral or credit enhancements.


92



(c) Liquidity risk

The table below analyses the Group’s and the Company’s fi nancial liabilities into relevant maturity groupings

based on the remaining period from the statement of fi nancial position date to the contractual maturity

date. The amounts disclosed in the table are the contractual undiscounted cash fl ows. Balances due within

12 months equal their carrying amounts as the impact of discounting is not signifi cant.

Less than 1 year

Between 1 and

3 years

Between 3 and

5 yearsOver

5 years

$’000 $’000 $’000 $’000

The Group

At 31 December 2012Trade and other payables (149,765) (43,297) (4,924) (1,624)Borrowings (664,858) (97,129) (105,402) -

(814,623) (140,426) (110,326) (1,624)

At 31 December 2011Trade and other payables (167,604) (48,081) (4,707) (1,624)Borrowings (744,997) (12,370) (30,695) -

(912,601) (60,451) (35,402) (1,624)

The Company

At 31 December 2012Trade and other payables (3,173) (149,538) - (1,624)Borrowings (444,074) - - -

(447,247) (149,538) - (1,624)

At 31 December 2011Trade and other payables (3,252) (152,894) - (1,624)Borrowings (505,659) - - -

(508,911) (152,894) - (1,624)

The Group’s and the Company’s policy on liquidity risk management is to maintain suffi cient cash to enable

them to meet their normal operating commitments and the availability of funding through adequate amounts

of credit facilities with various banks. At the statement of fi nancial position date, assets held by the Group

and the Company for managing liquidity risk included cash and short-term deposits as disclosed in note 18.


93



(d) Capital risk

The Group’s main objective when managing capital is to safeguard the Group’s ability to continue as a going

concern. The Group manages capital using various common measures applied by real estate companies

which may include adjusting the dividend payment, returning capital to shareholders or issuing new shares.

Management monitors the Group’s capital using a ratio calculated as debt divided by total equity,

where debt comprises total borrowings.

The Group

2012

$’000

2011

$’000

2010

$’000

(restated) (restated)Debt 856,671 785,645 764,416Total equity 6,388,643 5,980,124 5,783,127

Debt/Total equity ratio 13% 13% 13%

The Group and the Company are in compliance, where applicable, with all externally imposed capital

requirements for the fi nancial years ended 31 December 2011 and 2012.

(e) Financial instruments by category

The aggregate carrying amounts of loans and receivables and fi nancial liabilities at amortised cost are

as follows:


2012

$’000

2011

$’000

2012

$’000

2011

$’000

Loans and receivables 355,909 249,579 1,169,950 1,233,477Financial liabilities at amortised cost 1,056,281 1,007,661 598,205 663,195


94


30. RELATED PARTY TRANSACTIONS

(a) In addition to the related party information shown elsewhere in the fi nancial statements, the following

transactions took place between the Group and related parties during the fi nancial year:

The Group

2012

$’000

2011

$’000

Transactions with joint venturesMarketing fee income 1,892 -Project management fee income 330 200Fee income for arrangement of bank loan 50 60

Transactions with a fi rm in which a director has an interest Professional fee expense 77 109

(b) Key management personnel compensation

Key management’s remuneration included fees, salary, bonus and other emoluments (including benefi ts-

in-kind) computed based on the cost incurred by the Group and the Company, and where the Group or

the Company did not incur any costs, the value of the benefi t is included. The total key management’s

remuneration is as follows:

The Group

2012

$’000

2011

$’000

Directors of the Company- Fees 625 660- Salaries, bonus and other emoluments 1,109 1,158- Employer’s contribution to defi ned contribution plan 11 9- Share option expense 103 97

1,848 1,924

31. SEGMENT INFORMATION

For management purposes, the Group is organised into business units based on their products and services, and

has four reportable operating segments as follows:

• Property investment - leasing of commercial offi ce property, property management, investment holding, and

investment in retail centres.

• Property trading - development of properties for trading, project management and marketing services.

• Hotel operations - operation of hotels.

• Technologies - distribution of computers and related products; provision of systems integration and networking

infrastructure services.

Except as indicated above, no operating segments have been aggregated to form the above reportable

operating segments.


95


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96


31. SEGMENT INFORMATION (CONTINUED)

Geographical information

Singapore is the home country of the Company which is also an operating company. The areas of operation

are holding of investment properties for leasing, property development and trading, investment holding, property

management, and investment in hotels and retail centres.

Revenue is based on the country in which the sale is originated. Non-current assets are shown by the geographical

area in which the assets are located.

Revenue Non-current assets

2012

$’000

2011

$’000

2012

$’000

2011

$’000

2010

$’000

(restated) (restated)

Singapore 619,599 784,543 6,222,961 5,830,100 6,050,774China 91,889 20,961 231,262 251,922 134,004

711,488 805,504 6,454,223 6,082,022 6,184,778

32. NEW OR REVISED ACCOUNTING STANDARDS AND INTERPRETATIONS

Certain new standards, amendments and interpretations to existing standards have been published and are

mandatory for the Group’s accounting periods beginning on or after 1 January 2013 or later periods which the

Group has not early adopted. The Group does not expect that the adoption of these accounting standards or

interpretations will have a material impact on the Group’s fi nancial statements for the fi nancial year ending 31

December 2013, except for FRS 113 Fair Value Measurement which provides guidance on how fair value should

be determined and which disclosures should be made on the fi nancial statements. The Group will apply FRS 113

and provide the required disclosure from 1 January 2013.

33. AUTHORISATION OF FINANCIAL STATEMENTS

These fi nancial statements were authorised for issue in accordance with a resolution of the Board of Directors of

United Industrial Corporation Limited on 8 February 2013.


97


34. LISTING OF SUBSIDIARY AND ASSOCIATED COMPANIES, AND JOINT VENTURES IN THE GROUP

Principal activities

Country of

incorporation/

business

The Group’s

equity holding

2012

$’000

2011

$’000

Subsidiary companies

UIC Development (Private) Limited Investment holding Singapore 100 100

UIC Enterprise Pte Ltd Investment holding Singapore 100 100

UIC Investment Pte Ltd Property trading Singapore 100 100

UIC Investments (Properties) Pte Ltd Property investment Singapore 100 100

UIC Supplies Pte Ltd Property trading Singapore 100 100

UIC Land Pte Ltd Property investment Singapore 100 100

UIC Management Services Pte. Ltd. Property management

agents

Singapore 100 100

Active Building & Civil

Construction (1985) Pte Ltd

Investment holding Singapore 100 100

Networld Pte Ltd Investment holding Singapore 100 100

Networld Realty Pte Ltd Investment holding Singapore 100 100

UIC China Realty Pte. Ltd. Investment holding Singapore 100 100

Alprop Pte Ltd Property investment Singapore 90 89

Singapore Land Limited Investment holding Singapore 80 78

Gateway Land Limited Property investment Singapore 80 78

Ideal Homes Pte. Limited Property trading Singapore 80 78


98



(CONTINUED)


Country of

incorporation/

business

The Group’s

equity holding

2012

$’000

2011

$’000


Realty Management Services (Pte) Ltd. Property management

agents

Singapore 80 78

RMA-Land Development Private Ltd Property investment Singapore 80 78

Shing Kwan Realty (Pte.) Limited Property investment and

investment holding

Singapore 80 78

Singland (Chengdu)

Development Co. Ltd. #

Property trading People’s Republic

of China

80 78

Singland Development (Farrer Drive)

Pte. Ltd.

Property trading Singapore 80 -

Singland Development (Jervois) Pte. Ltd. Property trading Singapore 80 -

Singland Homes (Alexandra) Pte. Ltd. Property trading Singapore 80 -

S.L. Development Pte. Limited Property investment and

investment holding

Singapore 80 78

S L Prime Properties Pte Ltd Property investment Singapore 80 78

S L Prime Realty Pte Ltd Property investment Singapore 80 78

S.L. Properties Limited Property investment and

investment holding

Singapore 80 78

Pothonier Singapore Pte Ltd Investment holding Singapore 80 78

Shenton Holdings Private Limited Investment holding Singapore 80 78


99



(CONTINUED)


Country of

incorporation/

business

The Group’s

equity holding

2012

$’000

2011

$’000


Singland China Holdings Pte. Ltd. Investment holding Singapore 80 78

Singland Homes Pte. Ltd. Investment holding Singapore 80 -

S.L. Home Loans Pte. Ltd. Investment holding Singapore 80 78

S.L. Management Services Pte Limited Investment holding Singapore 80 78

Brendale Pte. Ltd. Property trading Singapore 63 62

UIC Asian Computer Services Pte Ltd Retailing of computer

hardware and

software

Singapore 60 60

UIC Investments (Equities) Pte Ltd Investment holding Singapore 60 60

UIC Technologies Pte Ltd Investment holding Singapore 60 60

UIC JinTravel (Tianjin) Co., Ltd # Property investment

and trading

People’s Republic

of China

51 51

Marina Centre Holdings Private Limited + Property development

and investment

Singapore 42 42

Marina Management Services Pte Ltd + Property management

agents

Singapore 42 42

Hotel Marina City Private Limited+ Hotelier Singapore 42 42


100




(CONTINUED)


Country of

incorporation/

business

The Group’s

equity holding

2012

$’000

2011

$’000

Associated companies

United Regency Pte Ltd Property trading Singapore 40 40

Avenue Park Development Pte. Ltd. ## Property trading Singapore 38 38

Tianjin Yan Yuan International Hotel * Hotel investment People’s Republic

of China

36 36

Shanghai Jin Peng Realty Co Ltd * Property trading People’s Republic

of China

24 24

Aquamarina Hotel Private Limited Hotelier Singapore 21 21

Marina Bay Hotel Private Limited Hotelier Singapore 21 21

Novena Square Development Ltd ++ Property investment Singapore 16 16

Novena Square Investments Ltd ++ Property investment Singapore 16 16

Joint ventures

United Venture Development (Bedok)

Pte. Ltd.

Property trading Singapore 40 39

UVD Pte. Ltd. Property trading Singapore 40 39

101



(CONTINUED)

Country of incorporation/

business

The Group’s

equity holding

2012

$’000

2011

$’000

Inactive companies


Netpearl Sdn Bhd # Malaysia 100 100

UIC China Resources Pte. Ltd. Singapore 100 100

UIC Commodities Pte Ltd Singapore 100 100

UIC Printedcircuits Pte Ltd Singapore 100 100

UIC Indochina Pte Ltd Singapore 100 100

Union Commodities Pte Ltd Singapore 100 100

Interpex Services Private Limited Singapore 80 78

Asian Computer Services Pte Ltd Singapore 60 60

Grocorp Assets Sdn Bhd # Malaysia 51 51

Marina Food Court Pte Ltd + Singapore 42 42


102




(CONTINUED)

Country of incorporation/

business

The Group’s

equity holding

2012

$’000

2011

$’000

Associated companies

CITIC-UIC Investment Pte Ltd Singapore 50 50

Kogan Investments Limited ^ British Virgin

Islands

40 39

United Venture Investment (Thomson) Pte. Ltd. Singapore 32 -

Marina Laundry Private Limited Singapore 30 29

Peak Venture Pte Ltd* Singapore 24 -

Notes

+ Effective interest is less than 50% as the subsidiary company is indirectly held by another subsidiary company.

++ Effective interest is less than 20% as the associated company is directly held by another subsidiary company.

All the subsidiary and associated companies, and joint ventures are audited by PricewaterhouseCoopers LLP,

Singapore except for the following:

# Audited by the network of member fi rms of PricewaterhouseCoopers International Limited.

## Audited by Ernst & Young LLP, Singapore.

* Audited by other auditors. These companies are not considered signifi cant associated companies under the

SGX-ST Listing Manual.

^ Not required to be audited by the law of the country of incorporation.

103


Five Year Summary2008 - 2012

GROUP PROFIT AND LOSS ACCOUNTS

($’000) 2008 2009 2010 2011 2012


Revenue 746,817 1,032,084 1,194,302 805,504 711,488

(Loss)/Profi t before income tax (98,620) (254,212) 1,157,552 378,729 567,574

Income tax expense (59,925) (61,780) (79,032) (50,981) (43,788)

Net (loss)/profi t (158,545) (315,992) 1,078,520 327,748 523,786

Attributable to:

Equity holders of the Company

- Net profi t from operations 149,248 252,064 277,778 200,230 168,238

- Net fair value (loss)/gain on

investment properties (320,281) (484,130) 559,074 (4,873) 223,317

(171,033) (232,066) 836,852 195,357 391,555

Non-controlling interests 12,488 (83,926) 241,668 132,391 132,231

(158,545) (315,992) 1,078,520 327,748 523,786

Dividends proposed (net) 41,324 41,324 41,324 41,334 41,342

GROUP STATEMENTS OF FINANCIAL POSITION

($’000) 2008 2009 2010 2011 2012


Investment properties 5,248,437 4,597,500 5,458,000 5,219,900 5,485,300

Property, plant and equipment 397,531 493,071 491,518 479,774 541,885

Other non-current assets 243,977 236,275 251,610 467,774 592,142

Current assets 1,218,843 1,102,536 816,638 1,077,458 987,453

Total assets 7,108,788 6,429,382 7,017,766 7,244,906 7,606,780

Current liabilities (1,192,189) (962,689) (989,716) (1,103,689) (847,772)

Non-current liabilities (627,863) (605,600) (244,923) (161,093) (370,365)

Net assets employed 5,288,736 4,861,093 5,783,127 5,980,124 6,388,643

Share capital 1,400,927 1,400,927 1,400,927 1,401,382 1,401,892

Reserves 2,132,076 1,888,582 2,705,567 2,906,850 3,282,024

3,533,003 3,289,509 4,106,494 4,308,232 4,683,916

Non-controlling interests 1,755,733 1,571,584 1,676,633 1,671,892 1,704,727

Total equity 5,288,736 4,861,093 5,783,127 5,980,124 6,388,643

104


OTHER DATA

2008 2009 2010 2011 2012


(Loss)/Profi t before income tax - % of revenue (13) (25) 97 47 80

(Loss)/Profi t attributable to equity holders of

the Company

- % of revenue (23) (22) 70 24 55

- % of share capital and reserves (5) (7) 20 5 8

Earnings/(Loss) per share (cents)

- excluding fair value loss/gain on

investment properties 10.8 18.3 20.2 14.5 12.2

- including fair value loss/gain on investment

properties (12.4) (16.8) 60.8 14.2 28.4

Dividends proposed

- per share (cents) 3.00 3.00 3.00 3.00 3.00

- cover (times) n.a. n.a. 20.3 4.7 9.5

Net asset value per share ($) 2.56 2.39 2.98 3.13 3.40

n.a. - Not applicable

Certain prior years’ fi gures have been restated following the adoption of Financial Reporting Standard 12 - Deferred

Tax: Recovery of Underlying Assets.

Five Year Summary2008 - 2012

105


Statistics of ShareholdingsAs at 1 March 2013

Number of Issued and Fully Paid-up Shares: 1,378,183,220

Class of Shares: Ordinary Shares

Voting Rights: One vote per share

Distribution of Shareholdings as at 1 March 2013

Size of Shareholdings

No. of

Shareholders % No. of Shares %

1 - 999 967 8.68 359,920 0.03

1,000 - 10,000 7,842 70.42 33,087,541 2.40

10,001 - 1,000,000 2,310 20.73 85,716,484 6.22

1,000,001 and above 19 0.17 1,259,019,275 91.35

Total 11,138 100 1,378,183,220 100

List of 20 Largest Shareholders as at 1 March 2013

No. Name No. of Shares %

1 UOB KAY HIAN PTE LTD 594,927,626 43.17

2 OVERSEA CHINESE BANK NOMS PTE LTD 290,052,043 21.05

3 DBS VICKERS SECS (S) PTE LTD 204,775,100 14.86

4 UNITED OVERSEAS BANK NOMINEES 84,127,122 6.10

5 DBS NOMINEES PTE LTD 25,892,493 1.88

6 CITIBANK NOMS S'PORE PTE LTD 25,325,696 1.84

7 CIMB SEC (S'PORE) PTE LTD 5,248,125 0.38

8 MERRILL LYNCH (S'PORE) P L 4,802,365 0.35

9 UOL EQUITY INVESTMENTS PTE LTD 3,485,000 0.25

10 OCBC NOMINEES SINGAPORE 3,425,269 0.25

11 HSBC (SINGAPORE) NOMS PTE LTD 3,201,217 0.23

12 SHANWOOD DEVELOPMENT PTE LTD 3,000,000 0.22

13 CHING MUN FONG 2,453,000 0.18

14 WEE CHO YAW 1,857,000 0.13

15 KI INVESTMENTS (HK) LIMITED 1,446,000 0.10

16 DBSN SERVICES PTE LTD 1,428,578 0.10

17 MAYBANK KIM ENG SECS PTE LTD 1,304,752 0.09

18 PRIMA INVESTMENT HOLDINGS (SINGAPORE) PTE LTD 1,215,000 0.09

19 PHILLIP SECURITIES PTE LTD 1,027,889 0.07

20 OCBC SECURITIES PRIVATE LTD 913,382 0.07

TOTAL 1,259,907,657 91.42

106


Substantial Shareholders’ Shareholdings as at 1 March 2013

Shareholdings

registered in the

name of substantial

shareholders or

nominees

Shareholdings

in which the

substantial

shareholders are

deemed to have an

interest

Name No. of Shares No. of Shares %

1) UOL Equity Investments Pte Ltd 565,407,565(1) nil 41.03

2) UOL Group Limited 32,318,000 (2) 565,407,565 (2) 43.37

3) Dr Wee Cho Yaw 1,857,000 665,283,565 (3) 48.41

4) Telegraph Developments Ltd 502,245,000(4) nil 36.44

Notes:

(1) UOL Group Limited and Dr Wee Cho Yaw have deemed interests in the UIC shares held by UOL Equity Investments Pte Ltd.

(2) Dr Wee Cho Yaw is deemed to have an interest in the UIC shares held by UOL Group Limited.

(3) Dr Wee Cho Yaw’s deemed interest in the 665,283,565 UIC shares is derived as follows:

UOB Kay Hian Pte Ltd

- benefi ciary: UOL Group Limited 32,318,000

UOL Equity Investments Pte Ltd 3,485,000

UOB Kay Hian Pte Ltd

- benefi ciary: UOL Equity Investments Pte Ltd 561,922,565

United Overseas Bank Nominees (Pte) Ltd

- benefi ciary: Straits Maritime Leasing Private Ltd 61,343,000

United Overseas Bank Nominees (Pte) Ltd

- benefi ciary: Haw Par Capital Pte Ltd 6,215,000

(4) JG Summit Philippines Limited, JG Summit Holdings, Inc. and Dr John Gokongwei, Jr. are deemed to have interests in the UIC

shares held by Telegraph Developments Ltd.

RULE 723 OF THE SGX-ST LISTING MANUAL

Based on the information available to the Company as at 1 March 2013, approximately 15.12% of the issued ordinary

shares of the Company is held by the public and therefore the Company has complied with the Exchange’s requirement

that at least 10% of equity securities (excluding preference shares and convertible equity securities) in a class that is listed

is at all times held by the public.

Statistics of ShareholdingsAs at 1 March 2013

107


Notice of Annual General Meeting

NOTICE IS HEREBY GIVEN that the 51st Annual General Meeting of United Industrial Corporation Limited will be held

at 80 Raffl es Place, 62nd Storey, UOB Plaza 1, Singapore 048624, on Friday, 26 April 2013 at 3.00 p.m. to transact

the following business:

As Ordinary Business

1. To receive and adopt the Directors’ Report and Audited Financial Statements for the fi nancial year ended

31 December 2012 and the Auditor’s Report thereon.

2. To declare a fi rst and fi nal dividend of 3.0 cents per share tax-exempt (one-tier) for the fi nancial year ended

31 December 2012. (2011: 3.0 cents)

3. To approve Directors’ fees of $309,625 for the fi nancial year ended 31 December 2012. (2011: $328,750)

4. To re-elect Mr Wee Ee Lim as a Director who will retire by rotation pursuant to Article 104 of the Articles of

Association of the Company and who, being eligible, offers himself for re-election.

5. To re-appoint the following Directors, each of whom will retire and seek re-appointment under Section 153(6) of

the Companies Act, Cap. 50, to hold offi ce from the date of this Annual General Meeting until the next Annual

General Meeting:

(a) Dr Wee Cho Yaw

(b) Dr John Gokongwei, Jr.

(c) Mr Yang Soo Suan (See Explanatory Note 1)

(d) Mr Hwang Soo Jin (See Explanatory Note 2)

(e) Mr Antonio L. Go

( f ) Mr James L. Go (See Explanatory Note 3)

(g) Mr Gwee Lian Kheng

6. To re-appoint PricewaterhouseCoopers LLP as Auditor of the Company to hold offi ce until the next Annual General

Meeting of the Company and to authorise the Directors to fi x their remuneration. (See Explanatory Note 4)


(Company Registration No. 196300181E)

Incorporated in the Republic of Singapore

108



As Special Business

7. To consider and, if thought fi t, to pass, with or without modifi cations, the following resolution as Ordinary Resolutions:

7A. That pursuant to Section 161 of the Companies Act, Cap 50, and subject to the listing rules, guidelines and

directions (“Listing Requirements”) of the Singapore Exchange Securities Trading Limited (“SGX-ST”), the Directors

of the Company be and are hereby authorised to issue:

(i) shares in the capital of the Company (“Shares”);

(ii) convertible securities;

(iii) additional convertible securities issued pursuant to adjustments; or

(iv) Shares arising from the conversion of the securities in (ii) and (iii) above,

(whether by way of rights, bonus, or otherwise or pursuant to any offer, agreement or option made or granted by

the Directors during the continuance of this authority which would or might require Shares or convertible securities

to be issued during the continuance of this authority or thereafter) at any time, to such persons, upon such terms

and conditions and for such purposes as the Directors may, in their absolute discretion, deem fi t (notwithstanding

that the authority conferred by this Ordinary Resolution may have ceased to be in force), provided that:

a. the aggregate number of Shares and convertible securities to be issued pursuant to this Ordinary Resolution

(including Shares to be issued in pursuance of convertible securities made or granted pursuant to this Ordinary

Resolution) does not exceed 50% of the total number of issued Shares (excluding treasury shares) provided

that 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

Ordinary Resolution) does not exceed 20% of the total number of issued Shares;

b. (subject to such other manner of calculation as may be prescribed by the SGX-ST) for the purpose of

determining the aggregate number of Shares that may be issued under (a) above, the percentage of issued

Shares shall be based on the total number of issued Shares (excluding treasury shares) at the time of the

passing of this Ordinary Resolution, after adjusting for:

(1) any new Shares arising from the conversion or exercise of convertible securities;

(2) (where applicable) any new Shares arising from exercising share options or vesting of share awards

outstanding or subsisting at the time this Ordinary Resolution is passed, provided the options or awards

were granted in compliance with the Listing Requirements; and




109


(3) any subsequent bonus issue, consolidation or subdivision of Shares;

c. in exercising the authority conferred by this Ordinary Resolution, the Company complies with the Listing

Requirements (unless such compliance has been waived by the SGX-ST) and the existing Articles of

Association of the Company; and

d. such authority shall, unless revoked or varied by the Company at a general meeting, continue to be in force

until the conclusion of the next Annual General Meeting of the Company or the date by which the next Annual

General Meeting of the Company is required by law to be held, whichever is the earlier. (See Explanatory Note

5)

7B. That the Directors be and are hereby authorised to:

a. offer and grant options to any full-time confi rmed employee (including any Executive Director) of the Company

and its subsidiaries who are eligible to participate in the United Industrial Corporation Limited Share Option

Scheme (the “Scheme”); and

b. pursuant to Section 161 of the Companies Act, Cap. 50, to allot and issue from time to time such number

of Shares in the Company as may be required to be issued pursuant to the exercise of options under

the Scheme,

provided that the aggregate number of Shares to be issued pursuant to this Ordinary Resolution shall not exceed

5% of the total issued Shares in the capital of the Company (excluding treasury shares) from time to time. (See

Explanatory Note 6).

8. To transact any other ordinary business as may be transacted at an Annual General Meeting of the Company.

By Order of the Board

Susie Koh

Company Secretary

Singapore, 25 March 2013

Notice of Annual General MeetingUNITED INDUSTRIAL CORPORATION LIMITED



110


NOTE:

A member of the Company entitled to attend and vote at this meeting is entitled to appoint one or two proxies to attend

and vote in his stead. A proxy need not be a member of the Company. The instrument appointing a proxy or proxies must

be deposited at the Registered Offi ce of the Company at 24 Raffl es Place #22-01/06 Clifford Centre, Singapore 048621

not less than 48 hours before the time appointed for holding the annual general meeting.

Explanatory Notes:

1. Mr Yang Soo Suan, if re-appointed, will remain as the Audit Committee Chairman and will be considered as

an Independent Director pursuant to Rule 704(8) of the SGX-ST Listing Manual.

2. Mr Hwang Soo Jin, if re-appointed, will remain as an Audit Committee Member and will be considered as

an Independent Director pursuant to Rule 704(8) of the SGX-ST Listing Manual.

3. Mr James L. Go, if re-appointed, will remain as an Audit Committee Member and will be considered as

a non Independent Director pursuant to Rule 704(8) of the SGX-ST Listing Manual.

4. The Audit Committee undertook a review of the fees and expenses of the audit and non-audit services provided

by the external auditor, PricewaterhouseCoopers LLP. It assessed whether the nature and extent of the non-audit

services might prejudice the independence and objectivity of the auditor before confi rming its re-nomination. It was

satisfi ed that such services did not affect the independence of the external auditor.

5. The Ordinary Resolution 7A proposed above, if passed, will empower the Directors of the Company, from the date

of the above Meeting until the next Annual General Meeting, to issue shares in the capital of the Company and

to make or grant convertible securities, and to issue shares in pursuance of such convertible securities, without

seeking any further approval from Shareholders in general meeting, up to a number not exceeding in total 50%

of the total number of issued shares (excluding treasury shares) in the capital of the Company, provided that

the total number of issued shares (excluding treasury shares) which may be issued other than on a pro rata basis

to Shareholders does not exceed 20%.

6. The Ordinary Resolution 7B proposed above, if passed, will empower the Directors of the Company, from the date

of the above Meeting until the next Annual General Meeting, to offer and grant options under the Scheme, and to

allot and issue shares pursuant to the exercise of such options provided that the aggregate number of shares to

be issued pursuant to this Ordinary Resolution 7B does not exceed 5% of the total number of issued shares in the

capital of the Company on the date immediately preceding the relevant date(s) on which the offer(s) to grant such

options is/are made.

Notice of Annual General MeetingUNITED INDUSTRIAL CORPORATION LIMITED



111



Notice of Books Closure Date and Payment Date for First and Final Dividend

NOTICE IS ALSO HEREBY GIVEN that subject to shareholders’ approval being obtained for the proposed fi rst and

fi nal dividend (one-tier tax exempt) of 3.0 cents per share for the fi nancial year ended 31 December 2012, the Share

Transfer Books and the Register of Members of the Company will be closed from 15 May 2013 to 16 May 2013, both

dates inclusive, for the preparation of dividend warrants. Duly completed transfers received by the Company’s Share

Registrar, Messrs KCK CorpServe Pte Ltd at 333 North Bridge Road #08-00 KH KEA Building, Singapore 188721

up to 5.00 p.m. on 14 May 2013 will be registered to determine shareholders’ entitlement to the proposed dividend.

Shareholders whose securities accounts with The Central Depository (Pte) Limited are credited with ordinary shares in

the capital of the Company as at 5.00 p.m. on 14 May 2013 will be entitled to the proposed dividends. The proposed

dividends, if approved, will be paid on 23 May 2013.




112





PROXY FORMANNUAL GENERAL MEETING

IMPORTANT NOTES:

1. For investors who have used their CPF monies to buy shares in

United Industrial Corporation Limited, this Report is forwarded to them

at the request of their CPF Approved Nominees and is sent solely

FOR INFORMATION ONLY.

2. This Proxy Form is not valid for use by CPF investors and shall be ineffective

for all intents and purposes if used or purported to be used by them.

3. CPF investors who wish to attend the Annual General Meeting as

OBSERVERS must submit their requests through their CPF Approved

Nominees within the time frame specifi ed. (CPF Approved Nominee: Please

see Note 8 on the reverse side).

4. CPF investors who wish to vote must submit their voting instructions to

the CPF Approved Nominees within the time frame specifi ed to enable

them to vote on their behalf

I/We ______________________________________________________________________________________________________ (Name)

of _______________________________________________________________________________________________________ (Address)

being a member/member (s) of United Industrial Corporation Limited (the “Company”), hereby appoint:-

Name Address NRIC/Passport No.

Proportion of

Shareholdings (%)

and/or (delete as appropriate)

Name Address NRIC/Passport No.

Proportion of

Shareholdings (%)

or failing him/her/them, the Chairman of the Meeting, as my/our proxy/proxies to attend and to vote for me/us on my/our behalf

and, if necessary, to demand a poll at the 51st Annual General Meeting of the Company to be held at 80 Raffl es Place, 62nd Storey,

UOB Plaza 1, Singapore 048624 on 26 April 2013 at 3.00 p.m. and at any adjournment thereof. I/We direct my/our proxy/proxies

to vote for or against the Resolutions to be proposed at the Meeting as indicated below. If no specifi c direction as to voting is given,

the proxy/proxies will vote or abstain from voting at his/her/their discretion.

No. Resolutions For * Against *

1 Adoption of Directors’ Report and Audited Financial Statements

2 Declaration of a First and Final Dividend tax-exempt (one-tier)

3 Approval of Directors’ fees

4 Re-election of Mr Wee Ee Lim retiring by rotation in accordance with Article 104 of

the Company’s Articles of Association

5 Re-appointment of Directors

retiring pursuant to Section 153(6)

of the Companies Act, Cap. 50

(a) Dr Wee Cho Yaw

(b) Dr John Gokongwei, Jr.

(c) Mr Yang Soo Suan

(d) Mr Hwang Soo Jin

(e) Mr Antonio L. Go

(f) Mr James L. Go

(g) Mr Gwee Lian Kheng

6 Re-appointment of Auditor

7A Authority for Directors to issue shares (Section 161 of the Companies Act, Cap. 50

and SGX-ST Listing Manual)

7B Authority for Directors to grant options and to allot and issue shares (pursant to the UIC

Share Option Scheme)

8 Any Other Business

* Please indicate your vote “For” or “Against” with an “X” within the box provided.

Dated this ________ day of _______________________ 2013

_______________________________________

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

IMPORTANT: PLEASE READ NOTES OVERLEAF BEFORE COMPLETING THIS PROXY FORM

Total Number of Shares held

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

defi ned in Section 130A of the Companies Act, Cap. 50), you should insert that number of shares. If you have shares registered

in your name in the Register of Members, you should insert that number of shares. If you have shares entered against your name

in the Depository Register and shares registered in your name in the Register of Members, you should insert the aggregate

number of shares entered against your name in the Depository Register and registered in your name in the Register of Members.

If no number is inserted, this instrument appointing a proxy or proxies shall be deemed to relate to all shares held by you.

2. A member of the Company entitled to attend and vote at a meeting of the Company is entitled to appoint one or two proxies to

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

3. Where a member appoints more than one proxy, he shall specify the proportion of his shareholding (expressed as a percentage

of the whole) to be represented by each proxy. If no such proportion or number is specifi ed, the fi rst named proxy shall be

deemed to represent 100 per cent of the shareholding and the second named proxy shall be deemed to be an alternate to the

fi rst named proxy.

4. Completion and return of this instrument appointing a proxy shall not preclude a member from attending and voting at the

meeting. Any appointment of a proxy or proxies shall be deemed to be revoked if a member attends the meeting in person,

and in such event, the Company reserves the right to refuse to admit any person or persons appointed under this instrument of

proxy, to the meeting.

5. The instrument appointing a proxy or proxies must be deposited at the Registered Offi ce of the Company at

24 Raffl es Place #22-01/06 Clifford Centre, Singapore 048621 not less than 48 hours before the time appointed for

the Annual General Meeting.

6. The instrument appointing a proxy or proxies must be under the hand of the appointor or his attorney duly authorised in writing.

Where the appointor is a corporation, the instrument of proxy must be executed either under its common seal or under the

hand of its duly authorized offi cer or attorney. Where an instrument appointing a proxy or proxies is signed on behalf of the

appointor by an attorney, the letter or power of attorney or a duly certifi ed 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.

7. A corporation which is a member may authorise, by resolution of its directors or other governing body, such person as it thinks

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

the Companies Act, Cap. 50.

8. Agent Banks acting on the request of CPF Investors who wish to attend the Annual General Meeting as Observers are required

to submit in writing, a list with details of the investors’ name, NRIC/Passport numbers, addresses and numbers of shares held.

The list, signed by an authorized signatory of the agent bank, should reach the Company Secretary at the registered offi ce of the

Company not later than 48 hours before the time appointed for holding the Annual General Meeting.

General:

The Company shall be entitled to reject the instrument appointing a proxy or proxies if it is incomplete, improperly completed or illegible

or where the true intentions of the appointor are not ascertainable from the instructions of the appointor specifi ed in the instrument

appointing a proxy or proxies. In addition, in the case of members whose shares are entered against their names in the Depository

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

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

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

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Artist’s impression of V on Shenton




24 Raffl es Place #22-01/06 Clifford Centre Singapore 048621

Tel: (65) 6220 1352 Fax: (65) 6224 0278

www.uic.com.sg

Documents

ANNUAL REPORT 2012uic.com.sg/system/misc/ar2012.pdf · 2014-12-15 · UNITED INDUSTRIAL CORPORATION LIMITED ANNUAL REPORT 2012 2012 Review The Singapore economy grew by 1.3% in 2012,