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2 AUSSINO GROUP LTD And Its Subsidiaries ANNUAL REPORT 2009
Contents
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Mission
Chairman's Statement
Operations Review
Design Culture
Directors/Key Executive
Group Structure
Corporate Information
3
Financial Highlights
Corporate Governance
Financial Statements
Shareholding Statistics
Notice of Eighteenth Annual General Meeting
Proxy Form
1
4
6
15
16
18
20
23
24
36
93
95
98
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4 AUSSINO GROUP LTD And Its Subsidiaries ANNUAL REPORT 2009
Chairman's
StatementDear Shareholders,
FY2009 saw the world faced one of its mostchallenging downturn that affected almostall business globally. Against this backdrop, Iam pleased to report that our foresight inthe previous financial year to consolidate
our base and remain nimble, with theobjective of sharpening our competitiveedge amidst a changing retail landscape,has yielded a relatively soft landing for theGroup amidst the turbulent environment ascompared to many other businesses. Forthe financial year ended 30 June 2009, theGroup registered sales of $81.6 million withloss before tax limited to $3.7 million.
De
FYchallamth
ouobjea
GrcothGros
With the Group’s 19 years of business experience behind it, this temporary economicsituation does not in anyway dampen the strong business foundation it has accumulatedover the years and I am fully confident that the Group will ride through the waves with aneven stronger anchor.
Our China business remained vibrant with sales of $34.3 million. The demand for Aussinohome furnishing products was strong and this can only be an attestation to our brand valuewhich we had consciously built since we established the China market. We have opened 26Aussino standalone stores in Shanghai and Beijing and we continue to be on the look outto grow more stores.
Our businesses in Singapore, Malaysia, Korea and Hong Kong have also remained robustwith sales of $34.5 million. Like China, our brand recognition and value have once againcontributed to the long term sustainability of the business.
For the Group’s wholesale markets in USA and Australia, we have secured new customersto diversify our existing customer base. New products like curtains and drapes are alsobeing added onto our wide array of home fashion products to cater to customers’ demands.In Australia, we have also embarked on promoting the Aussino brand to certain customersand we expect to reap medium to long term sustainable brand value from this strategy toenhance our profitability.
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AUSSINO GROUP LTD And Its Subsidiaries ANNUAL REPORT 2009 5
We have an international distributorship network that spreads across many countries. Ourmost successful distributor in Saudi Arabia has opened 7 stores and is still looking forlocations to open more stores. We have plans to grow the international distributorshipbusiness and are constantly on the look out for passionate partners to drive Aussino brandand products in their countries.
Along with other retailers, this year presented us with significant challenges. However, it alsogave us evidence that the Aussino brand remains resilient and powerful and that our
customers remain loyal and invested in our continued success. Although we expect marketconditions to remain challenging in the near term, its recovery will bring forth stronger andmore robust economies globally. Our business fundamentals are strong and this will fuelcontinued growth in the long term.
I remain passionate and enthusiastic about the Group’s future and the only way is up for theGroup’s business over the long term. As part of the Group’s succession planning and with thefull blessing of the Board, there is no other opportune time than now for me to handover thereins to Mr Jonathan Lim, who succeeds me as CEO of the Group, while I remain as Chairman.It is with my full support and confidence that Mr Jonathan Lim, who holds the position ofManaging Director of the Group for the past 13 years and successfully pioneered the Group’s
foray into the retail business, leads the Group to newer and even greater heights with his vastexperience and vision.
I am thankful for the commitment, dedication and team work of the management team andstaff during the past year. Without any doubt, I am certain that under Mr Jonathan Lim’sleadership, both management and staff will continue to deliver its commitment toshareholders for sustainable, long-term growth.
On behalf of my fellow directors, I would like to thank all our customers, bankers, businessassociates, suppliers and shareholders for their continuing support and belief in us. We look
forward to what lies ahead.
Dr. Anthony LimBA(Hons),ACIS,PhD
ChairmanAussino Group Ltd
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OperationsReview
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AUSSINO GROUP LTD And Its Subsidiaries ANNUAL REPORT 2009 7
OVERVIEW
AUSSINO is a global brand that is synonymous with soft home furnishings. An
internationally recognized brand, our merchandise is available through more than
8000 retail points of sales worldwide in the U.S.A., Europe, Canada, Australia, New
Zealand, China, Hong Kong, Korea, Singapore, Malaysia, Brunei, Saudi Arabia,
Thailand, Philippines, Vietnam, Mauritius, Myanmar, Maldives, etc. In addition to
soft home furnishing products, AUSSINO also distributes ladies’ fashion apparel
under the brand of SINO LONDON in China and Australia.
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8 AUSSINO GROUP LTD And Its Subsidiaries ANNUAL REPORT 2009
Retail
BusinessThe Group’s retail goal is to be the leading retailer and brand for soft home
furnishings in each of its target markets by offering well-designed and quality home
fashion products to customers under the AUSSINO brand and ladies fashion apparel
under the SINO LONDON brand.
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In China, Hong Kong, Korea, Singapore and Malaysia, there are a total of 554 points
of sales registering a combined turnover of $68.8 million in FY2009. In the lastfinancial year, 26 new stores were opened in China. Due to the recognition of the
Aussino brand in these countries, the Group has built a high degree of customer
loyalty. Aussino retail stores are typically located in high-traffic and high-visibility
locations. Because of the very wide range of products in the offering, the Group can
easily vary the size and layout of its stores located at both downtown and suburban
retail vicinity. The Group strives to expand its retail business and increase market
share by selectively opening additional stores and counters, continuing to offer
appealing products to customers sold through attractive sales and marketing
promotions.
appea ing pro ucts to custo
promot ons.
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10 AUSSINO GROUP LTD And Its Subsidiaries ANNUAL REPORT 2009
Wholesale
BusinessThe Group wholesales soft home furnishing products in U.S.A., Canada, Australiaand New Zealand to the major chain retailers.
For FY09, the wholesale business generated sales of $13.2 million. We have securednew customers to diversify our existing customer base. New products like curtainsand drapes are also being added onto our wide array of home fashion products tocater to customers’ demands. In Australia, we have also embarked on promoting theAussino brand to certain customers and we expect to reap medium to long termsustainable brand value from this strategy to enhance our profitability.
o certain customers an we expect to reap me ium to ong termd value from this strategy to enhance our profitability.
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Australia also engages in wholesale of Sino London ladies fashion apparel aswell as imported labels like Nougat London from London, Sweaterhouse from
Spain and Sulu from Germany. It also operates 3 retail stores located in Sdyneyand Perth for the retailing of ladies fashion apparel.
In the countries of Saudi Arabia, Spain, Romania, Thailand, Philippines,Vietnam, Brunei, Myanmar, Mauritius, Maldives, the Group leverages on theexpertise of its local partners who possess in-depth market knowledge andaccess and share Aussino’s operating and business experience. Our distributorshave opened an impressive combined total of 47 stores and counters within ashort span of 4 years. The international distributorship is poised for long-termgrowth as we are confident of the acceptance of Aussino products in any new
market given the response received so far from the international distributors inour stable. We are always on the look out for passionate and energeticentrepreneurs across the world to represent us in their countries and to shareour design and quality of soft home fashion products with new customers. Withthe recovery in the global economy in the near and medium term, we arehopeful that this segment of the business will take off and fly on higher grounds,thereby launching the brand to a truly international global platform.
l asrom
ney
nes,theandtorsin aermnew
s ineticareithareds,
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Design CultureAUSSINO is a knowledge-based group that is involved in the design, product
development, marketing, distribution and retailing of AUSSINO home fashion
products and accessories and SINO LONDON ladies’ fashion apparel.
AUSSINO continues to keep abreast of fashion trends with an established
number of in-house designers. These fashion teams are based in New York,
London, Melbourne, Shanghai, Singapore and Malaysia. All new AUSSINO
and SINO LONDON collections are coordinated and manufactured in our
network of 38 factories. All AUSSINO products must meet our strict quality
criteria which are in-line with international standards.
AUSSINO GROUP LTD An Its Su si ia 15
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16 AUSSINO GROUP LTD And Its Subsidiaries ANNUAL REPORT 2009
Directors/
Key ExecutiveDIRECTORS
Dr Anthony Lim
Chairman
Appointed to the Board of Directors on 14 March 1991. Dr Anthony Lim is the Chairman of the Group and has
retired as Chief Executive Officer in August 2009. He is also a member of the Audit Committee and Remuneration
Committee.
Dr Anthony Lim has more than 18 years of experience in the retail, wholesale, export and import business. He
founded the Group in 1991 and has identified business opportunities for the Group. Dr Anthony Lim expanded the
Group’s businesses to markets in U.S.A., Australia, Canada, China, Singapore and Malaysia. He continues to
provide strategic direction and expertise to bring the Group forward to its next phase of expansion growth.
Dr Anthony Lim holds a Ph.D in Entrepreneurship awarded by Wisconsin International University, U.S.A. and a
Bachelor of Arts (Honours) in Business Administration from the University of East London, U.K. He was a
professional member of Certified General Accountants of Canada and Certified Management Accountants of
Canada. He is also an Associate Member of the Institute of Chartered Secretaries and Administrators of Singapore
and England.
Mr Jonathan Lim
Appointed to the Board of Directors on 6 December 1996. Mr Jonathan Lim is the Group’s Managing Director for
13 years and is appointed as Chief Executive Officer in August 2009. He is responsible for the overall management
of the Group’s operations and expansion. Mr Jonathan Lim has vast knowledge and experience in retail and
marketing and successfully launched Asia’s first Aussino stand-alone concept store in Singapore, Malaysia and
thereafter, transferred his expertise to China.
Mr Jonathan Lim holds a Bachelor of Commerce in Marketing and Asian Studies from the Murdoch University in
Western Australia.
Ms Helen Chow
Appointed to the Board of Directors on 17 February 2000. Ms Helen Chow is Financial Controller of Australia
operations, and she was the Group’s Chief Financial Officer since 1999 before stepping down in May 2009 to
concentrate on the Group’s business in Australia. Prior to joining the Group, Ms Helen Chow has extensive
experience in audit and corporate work. She has worked with KPMG and other international companies.
Ms Helen Chow holds a Bachelor of Accountancy from the National University of Singapore and is also a Fellow
Certified Public Accountant of the Institute of Certified Public Accountants of Singapore.
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Mr Edward Chiu
Appointed to the Board of Directors on 12 March 2007. Mr Edward Chiu is the Group’s Independent and
Non-Executive Director. He is the Chairman of the Audit Committee and is also a member of the Remuneration
Committee.
Mr Edward Chiu is the Chief Financial Officer of Goodpack Limited and has many years of experience in financial
and general management. Prior to joining Goodpack Ltd, he was the General Manager of Times The Bookshop
Pte Ltd and Executive Director of Popular Holdings Ltd and Wywy Marketing Sdn Bhd. He has worked in KPMG
and Coopers & Lybrand in his earlier career.
Mr Edward Chiu holds a M.Sc. degree in Finance from the London School of Economics and Political Sciences and
is a fellow member of the Association of Chartered Certified Accountants (FCCA).
Mr Nandakumar Ponniya
Appointed to the Board of Directors on 1 April 2007. Mr Nandakumar Ponniya is the Group’s Independent andNon-Executive Director. He is the Chairman of the Remuneration Committee and is also a member of the Audit
Committee.
Mr Nandakumar Ponniya is an advocate and solicitor with Rajah & Tann and has extensive legal experience and
knowledge. He holds a Bachelor of Laws from the National University of Singapore and was admitted as an
advocate and solicitor of the Supreme Court of Singapore in 1996.
Mr Nandakumar Ponniya is also admitted as a solicitor of England and Wales and as an attorney-at-law in New
York State, U.S.A. He is a member of the Society of Construction Law in Singapore and a member of the Law
Society of Singapore’s Civil Practice Committee, in addition to being an accredited Associate Mediator of the
Singapore Mediation Centre.
KEY EXECUTIVE
Ms Joanne Chow
Ms Joanne Chow was the Head of Finance for 4 years handling the finance operations of the Group and various
subsidiaries, before being appointed as the Group's Chief Financial Officer in August 2009. She is responsible for
the Group's financial, secretarial and corporate work. Prior to joining the Group, Ms Joanne Chow has worked with
The Edge Publishing Pte Ltd and Allianz Insurance Company of Singapore Pte Ltd and other companies as
Accountant with vast experience in financial and secretarial work.
Ms Joanne Chow holds a Bachelor of Science in Accounting and Finance from the London School of Economics and
Political Science, University of London.
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Group Structure
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U.S.A.
Aussino (U.S.A.) Inc. 100%
Retro (U.S.A.) Inc. 100%
Canada
Aussino (Canada) Inc. 100%
U.K.
Aussino (Europe) Limited 100%Sino Fashions (London) Limited 100%
Australia
Aussino International Corporation Pty Ltd 100%Doppio Fashion Group Pty Ltd 75%Nuovo Uno Pty Ltd 75%Leo Fashion International Pty Ltd 75%Sino London Pty Ltd 75%Galleria Fashions International Pty Ltd 100%
China
Aussino Fashion Textiles (Shanghai) Co., Ltd 100%Aussino International Trade (Shanghai) Co., Ltd 100%
Aussino Food & Beverage China Corporation 100%Aussino China Inc 100%Aussino Home Fashions (Shanghai) Co., Ltd 100%Sino Fashion (Shanghai) Co., Ltd 100%Suhan International Trade Co., Ltd 100%
Singapore
Aussino Home Fashions Pte Ltd 100%Sino London Pte Ltd 100%www.Aussino.com Pte Ltd 100%
Malaysia
Aussino Malaysia Sdn. Bhd. 100%Aussino.com Malaysia Sdn. Bhd. 100%
Hong Kong
Aussino Fashions Group Limited 100%
Korea
Aussino Korea Inc. 100%
AUSSINO GROUP LTD And Its Subsidiaries ANNUAL REPORT 2009 19
ASiS
Si
ASiw
M
AA
H
A
K
A
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Group Turnover ($' million)
FinancialHighlights
33.0 37.1
41.9
57.3
93.3
112.7
116.7
0
20.0
40.0
60.0
80.0
100.0
120.0
140.0
FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09
FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09
FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09
FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09
81.6
94.9
111.1
Group Profit Before Tax ($' million)
2.1
-3.7
7.6
6.67.1
9.0 9.4
10.3
11.411.5
0.0
2.0
4.0
6.0
8.0
10.0
12.0
Net Asset Backing Per Share (in Cents)
0
5.0
10.0
15.0
20.0
25.0
Earnings Per Share (in Cents)
-1.07
0.84
2.86
2.44 2.55
3.38
3.55
3.93
4.19
4.57
0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
5.0
19.18
8.03
10.21
12.01
14.87
16.30
19.07
21.54
23.12
20.41
0
.
1.
1.5
.
2.5
.
3.5
4.
.
5.0
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AUSSINO GROUP LTD And Its Subsidiaries ANNUAL REPORT 2009 25
Code Principle 1 :
The Board’s Conduct
of its Affairs
Code Guideline 1.3:
Delegation of authority on
certain Board matters
Code Guideline 1.4:Meetings of the Board and
Board Committees
Code Guideline 1.4:
Meetings of the Board and
Board Committees
Code Guideline 1.5:
Matters requiring
board approval
Code Guideline 1.6:
Directors to receive
appropriate training
Code Guideline 1.7
Formal letter to beprovided to directors,
setting out duties and
obligations.
The Board’s primary role is to protect and enhance long term shareholder value. It
supervises the management of the business and affairs of the Group, approves the
Group’s corporate and strategic direction, appointment of directors, major fundingand investment proposals, key capital expenditure decisions, reviews the financial
performance of the Group and other matters. The Board is also responsible for the
overall corporate governance practices of the Group.
To facilitate effective management, certain functions have been delegated to the
Audit and Remuneration Committees, each of which has its own written terms of
reference and whose actions are reported to and monitored by the Board. Due to
its small board size, there was no necessity for a Nominating Committee to be
constituted as the functions of the Nominating Committee have been assumed by
the Board.
The Board meets regularly, at least on a half-yearly basis. Ad-hoc meetings areheld at such times, as and when required, to address any specific significant
matters that may arise. Details of the frequency of Board and Board Committee
meetings held during the last financial year ended 30 June 2009 (“FY2009”) as well
as the attendance of each Board member at these meetings, are disclosed below:
Board Audit RemunerationCommittee Committee
#No of Attendance #No of Attendance #No of AttendanceMeetings Meetings Meetings
Dr Anthony Lim
Mr Jonathan Lim
Ms Schnabel RudiantoMs Helen Chow
Mr Edward Chiu
Mr Nandakumar Ponniya
Other than the above, the Independent Directors also convened additional informal
meetings as well as telephone discussions during the financial year to discuss
issues as and when required. In lieu of physical meetings for quarterly reportings,
written resolutions were circulated for approval by members of the Board and
Board Committees.
Board’s approval is required for matters likely to have a material impact on the
Group’s operations as well as matters other than in the ordinary course of
business.
New directors, upon appointment, will be briefed on the business and organization
structure of the Group to ensure that they are familiar with the Group structure, its
business and operations. The directors may participate in seminars and/or
discussion groups to keep abreast of the latest developments which are relevant to
the Group.
A formal letter is given to each director upon his appointment, setting out, among
other matters, the director’s duties and obligations.
Board matters
2
2
12
2
2
2
-
12
2
1
2
-
--
2
2
2
-
--
2
2
1
-
--
1
1
1
-
--
1
1
(1) resigned on 28 November 2008
# Number of meetings held whilst a Director
(1)
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Code Principles 2 & 4 :
Board Members
Composition and Balance
Guideline 2.3: Appropriate
size of Board
Code Guideline 2.1:
Independent Directors tomake up at least one-third
of the Board
Code Guideline 2.5 and
2.6: Roles and meetings of
Non-executive Directors
Code Principle 3 :
Chairman and Chief
Executive Officer
The Board comprises 3 executive directors and 2 independent and non-executive
directors. The Board is of the view that the current size of the Board is
appropriate, taking into account the nature and scope of the Group’s operations.
The members of the Board are as follows:-
Executive Directors:
Dr Anthony Lim
Mr Jonathan Lim
Ms Helen Chow
Independent and Non-Executive Directors:
Mr Edward Chiu
Mr Nandakumar Ponniya
The Board consists of high caliber members with a wealth of knowledge, expertise
and experience who contribute valuable direction and insight to the Company.
Collectively, they possess vast experience in matters relating to accounting,
finance, legal, business and general corporate matters that are necessary and
critical to meet the Group’s objectives.
Details of the directors’ backgrounds are set out on pages 16 and 17 of this
Annual Report.
There is an independent element on the Board, with independent directors
constituting at least one-third of the Board. The Board is able to exerciseobjective judgment on corporate affairs independently, in particular, from
management. No individual or small group of individuals is allowed to dominate
the Board's decision making. The Board is of the view that given current
structure, there is sufficiently strong independent element on the Board to enable
the independent exercise of objective judgment on corporate affairs of the Group
by members of the Board, taking into account factors such as the number of
Independent Directors on the Board, as well as the size and scope of the affairs
and operations of the Group.
Where warranted, the non-executive directors meet without the presence of
Management or executive directors to review any matters that must be raised
privately.
Dr Anthony Lim is both the Chairman and Chief Executive Officer (“CEO”) of the
Company until August 2009. As part of the Group’s succession planning, Dr
Anthony Lim retired as CEO in August 2009 with the appointment of Mr Jonathan
Lim as the succeeding CEO. Dr Anthony Lim remains as Chairman of the Group.
As founder of the Group, Dr Anthony Lim possesses in-depth experience in the
retail, wholesale, export and import business.
Mr Jonathan Lim holds the position of Managing Director of the Group for the past
13 years before being appointed as CEO in August 2009. He pioneered the retailbusiness for the Group and has the qualification, knowledge, experience and
vision to lead the Group to greater heights.
Board of Directors
Chairman and Chief Executive Officer
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AUSSINO GROUP LTD And Its Subsidiaries ANNUAL REPORT 2009 27
Board CommitteesNominating Committee
Code Guideline 4.1:
Nominating Committee to
comprise at least three
directors, majority of whom
independent; chairman not
associated with a
substantial shareholder
Code Principle 4:
Nominating Committee
Deviation
The Board supports Dr Anthony Lim and Mr Jonathan Lim in their roles as
Chairman and CEO respectively. All major decisions relating to the operations and
management of the Group are jointly and collectively made by the Board aftertaking into account the opinions of all directors. As such, there is a balance of
power and authority and no one individual controls or dominates the
decision-making process in the Group.
The Chairman is responsible for Board processes and ensures the integrity and
effectiveness of the governance process of the Board. He is also responsible for
representing the Board to shareholders, ensuring that Board meetings are held
when necessary, setting the Board meeting agenda in consultation with the Chief
Financial Officer and Company Secretary, acting as a facilitator at Board meetings
and maintaining regular dialogue with Management on all operational matters. The
Chairman reviews Board papers before they are presented to the Board and
ensures that Board members are provided with adequate and timely information.The Chairman also assists in ensuring compliance with the Company’s corporate
governance processes.
The Code recommends the setting up of a Nominating Committee (“NC”) to
undertake the responsibility of administering a formal and transparent process for
all Board appointments and re-appointments. The Board did not establish a NC as
the Board itself can fulfill the role of NC. Also, the size of the Board does not
warrant having a sub-committee for the stated purposes. It would be moreappropriate, efficient and effective that all Board appointments and
re-appointments be undertaken directly by the Board as follows:-
(i)
(ii)
(iii)
(iv)
(v)
(vi)
(vii)
To review the background, academic and professional qualifications of each
individual director;
To review and recommend the nomination of retiring directors for re-election
at each Annual General Meeting (“AGM”);
To review and determine annually the independence of each director, and
ensure that the Board comprises at least one-third independent directors;
To nominate and recommend all new appointments to the Board;
To assess the performance of the Board as a whole, as well as the
contribution of each director to the effectiveness of the Board;
To decide, where a director has multiple board representation, whether the
director is able to and has been adequately carrying out his duties as a
director of the Company; and
To review the Board structure, size and composition and make
recommendations to the Board with regards to any adjustments that are
deemed necessary.
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28 AUSSINO GROUP LTD And Its Subsidiaries ANNUAL REPORT 2009
Code Guideline 4.2:
Re-nomination and
re-election of Directors
Code Principle 4.3:
Independence of Directors
Code Guideline 4.4:
Multiple board
representations
Code Guideline 4.5 :
Description of process of
selection and appointment
of new directors
Code Principle 5:
Board Performance
Code Principle 6 :
Access to information
Code Guideline 6.1:Board members to be
provided with timely
information
Code Guideline 6.2:
To include background and
explanatory information
Code Guideline 6.3:
Role of Company Secretary
In accordance with the Company’s Articles of Association, one third, or if their
number is not a multiple of three, the number nearest to but not less than
one-third of the directors are required to retire from office by rotation at each
AGM, (provided that no director holding office as Managing or Joint Managing
Director shall be subject to retirement by rotation or be taken into account in
determining the number of directors to retire). All newly appointed directors willhave to retire at the next AGM following their appointments. The retiring directors
are eligible to offer themselves for re-election, but shall not be taken into account
in determining the number of Directors who are to retire by rotation at such
meeting. The Board had recommended the re-election of the following director
who will be retiring at the forthcoming AGM:
Ms Helen Chow (Article 91)
In reviewing the re-nomination of the Board members who are due for re-election
as a director of the Company, no member of the Board shall vote in respect of his
own re-nomination.
The Board has reviewed the independence of each director for FY2009 in
accordance with the Code’s definition of independence and is satisfied that
one-third of the Board comprised independent non-executive directors.
Notwithstanding that some of the Directors have multiple board representations,
the Board is satisfied that each Director is able to and has been adequately
carrying out his duties as a director of the Company.
The search and nomination process for new directors, if any, will be through
search companies, contacts and recommendations that go through the normal
selection process to select the right candidate.
Informal reviews of Board members’ performance are undertaken on a
continuous basis by the Board. The Directors’ contribution and performance at
Board meetings (including attendance, preparedness, participation and candor)
are taken into consideration. Renewals or replacement of Directors’ Board
membership do not necessarily reflect their contributions to-date, but may be
driven by the need to position or shape the Board to be in line with the
medium-term needs of the Company and its business.
The Board receives management accounts every quarterly and meets half yearly
to review the operations of the Company and approve the issue of the quarterly
announcements to the SGX-ST. Board members are provided with complete,
adequate and timely information so that they may better understand the mattersto be tabled before the Board meetings and discussion may be focused on these
matters. In addition to the regular reports, all relevant information on material
events and transactions complete with background and explanations are
circulated to the Directors as and when they arise.
The Company Secretary attends and prepares minutes of all Board and Board
Committee meetings. She assists the Chairman in ensuring that Board
procedures are followed and regularly reviewed to ensure effective functioning of
the Board, and that the Company’s Memorandum and Articles of Association and
relevant rules and regulations, including requirements of the SGX-ST, are
complied with. She also assists the Chairman and the Board in implementing and
strengthening corporate governance practices and processes with a view toenhancing long-term shareholder value. She is also the primary channel of
communication between the Company and the SGX-ST. The appointment and
removal of the Company Secretary is a matter for the Board as a whole.
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AUSSINO GROUP LTD And Its Subsidiaries ANNUAL REPORT 2009 29
Remuneration Committee
Code Guideline 6.5:
Procedure for board to take
independent professional
advice at company’s cost
Code Principle 7:
Remuneration Matters
Guideline 7.1 :
RC to consist entirely
NEDs; majority, including
RC chairman, must be
independent
Code Guideline 7.2:
Duties of Remuneration
Committee
Code Principle 8 :
Level and Mix of
Remuneration
The directors have separate and independent access to the Group’s senior
Management who, together with the Company Secretary, are responsible for
ensuring that Board procedures are followed and that applicable rules and
regulation are complied with. Any requests by Board members for further
explanation, briefings or informal discussions on any aspect of the Company’s
operations are always facilitated expeditiously. Subject to the approval of theChairman, directors, whether as a group or individually, may seek and obtain
independent professional advice to assist them in their duties, at the expense of
the Company.
The Remuneration Committee (“RC”) comprises a majority of non-executive and
independent directors. The Company is of the view that the size of the Group’s
present business and operations does not justify the appointment of a third
non-executive director for the purpose of reconstituting the RC to comprise solely
of non-executive directors. The members of the RC are as follows:-
Independent and Non-Executive Directors:
Mr Nandakumar Ponniya (Chairman)
Mr Edward Chiu
Executive Director:
Dr Anthony Lim
The RC has access to expert advice on executive compensation, where
appropriate. In its written terms of reference, the responsibilities of RC are as
follows:-
(i)
(ii)
(iii)
As part of its review, the RC covers all aspects of remuneration, including but not
limited to directors’ fees, salaries, allowance, bonuses, options andbenefits-in-kind. The aim of the RC is to motivate and retain valued executives
and employees and ensure that the Group is able to attract and retain the best
talent in the market in order to maximize shareholders’ value.
The RC ensures that the remuneration packages of employees related to
executive directors and controlling shareholders of the Group are in line with the
Group’s staff remuneration guidelines and commensurate with their respective job
scopes and levels of responsibilities. No director is involved in the deliberation of
his or her own remuneration.
To review and recommend to the Board the remuneration packages andterms of employment of the executive and non-executive directors of the
Board and key executives of the Group including those employees related to
the executive directors and controlling shareholders of the Group;
To review and approve Executive Share Option Scheme when required; and
To carry out its duties in a manner that it deems expedient, subject always
to any regulations or restrictions that may be imposed upon the RC by the
Board from time to time.
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30 AUSSINO GROUP LTD And Its Subsidiaries ANNUAL REPORT 2009
Code Guideline 8.1 :
Package should align
executive directors’
interests with shareholders’
interest
Code Guideline 8.2 :
Remuneration to consider
contribution, effort, time
spent and responsibilities
Code Principle 9 :
Disclosure of Remuneration
In recommending the remuneration packages for the Executive Directors and
Independent Directors, the Company has also made a comparative study of the
remuneration packages in comparable size companies and comparable industries
and has taken into account, the performance of the Company and that of its
Directors. The RC’s recommendations are made in consultation with the Chairman
of the Board and submitted for approval by the majority of the Board.
Non-executive directors (“NEDs”) are remunerated under a framework of fixed
fees for serving on the board and board committees. Fees for NEDs are subject to
the approval of shareholders at the AGM. The executive directors are currently
remunerated based on the performance of the Group and the individual.
The remuneration of Directors during FY2009 are as follows:-
Breakdown of Remuneration in Percentage (%)
* resigned on 28 November 2008
During FY2009, none of the Directors had immediate family members not
disclosed above who were employees of the Company and whose annual
remuneration exceeded S$150,000
Directors of
the Company
Executive Directors
$500,000 and above
Anthony Lim
Below $250,000
Jonathan Lim
Schnabel Rudianto *
Helen Chow
Independent Directors
Below $250,000
Nandakumar Ponniya
Edward Chiu
Base
Salary
80%
-
100%
77%
-
-
Bonus
20%
-
-
23%
-
-
Other
Benefits
-
-
-
-
-
-
Director’s
Fees
-
-
-
-
100%
100%
Total
100%
-
100%
100%
100%
100%
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AUSSINO GROUP LTD And Its Subsidiaries ANNUAL REPORT 2009 31
Code Principle 10 :
Accountability and Audit
Code Principle 11 :
Audit Committee
Code Guideline 11.8:
Disclosure of Names of
Members of Audit
Committee and their
Activities
The Board is accountable to shareholders whilst Management is accountable to
the Board.
Management presents to the Audit Committee (“AC”) the quarterly and annual
results. The AC reviews the results and recommends them to the Board for
approval. The Board approves the results and authorizes the release of the
results, and makes disclosure of other relevant information on the Company to
SGX-ST and the public via SGXNET as required by the SGX-ST Listing Manual.
The Audit Committee (“AC”) comprises three members, the majority of whom,
including its Chairman, are independent for the purpose of Rule 704(8) of theSGX-ST Listing Manual. The Company considers that it is not necessary for the
time being, for all 3 members of the AC to be non-executive directors taking into
account the nature and scope of the Company’s operations and the additional
costs to be incurred in appointing an additional non-executive director. The
Company will review the need to appoint another non-executive and independent
director when necessary. The AC members are as follows:
Independent and Non-Executive Directors:
Mr Edward Chiu (Chairman)
Mr Nandakumar Ponniya
Executive Director:
Dr Anthony Lim
The Company has adopted and complied with the principles of corporate
governance under the Code in relation to the roles and responsibilities of the AC.
The AC meets regularly with the Group’s external auditors and Management to
review accounting, auditing and financial reporting matters, so as to ensure that
an effective control environment is maintained in the Group.
As a sub-committee of the Board, the AC assists the Board in discharging its
responsibilities to safeguard the Company’s assets, maintain adequate accounting
records and develop and maintain an effective system of internal controls.
The Board considers that the members of the AC are appropriately qualified,
having the necessary accounting or related financial management expertise and
experience to discharge their responsibilities.
The AC meets periodically to review the following:-
(i)
Accountability
Audit Committee
The scope of work of the external auditors, and their evaluation of the system
of internal accounting controls arising from the audit and audit reports and
matters which the external auditors wish to raise;
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32 AUSSINO GROUP LTD And Its Subsidiaries ANNUAL REPORT 2009
(ii)
(iii)
(iv)
(v)
(vi)
(vii)
The Company has in place a Whistle-Blowing policy in compliance with the
recommendation of the Code. This policy serves to provide a channel to all
employees of the Group to report in good faith and in confidence, without fear of
reprisals, concerns about possible improprieties in matters of financial reporting
or other matters via a confidential email address assigned to top management
and independent directors. All employees have been assured of confidentiality
and protection of identity unless it is absolutely necessary to facilitate further
investigation into the matter of concern. A monetary reward is also given to the
employee who raises a matter of concern that results in identification of an actual
impropriety after a full investigation is conducted by the Company.
In performing its functions, the AC:
(i)
(ii)
(iii)
(iv)
The AC has full access to and cooperation from the management. It has been
given the resources required to discharge its function properly. The executive
management of the Company attends all meetings of the AC on invitation.
Both the AC and the Board have reviewed the appointment of different auditors
for its local subsidiaries and/or significant associated companies and were
satisfied that the appointment of different auditors would not compromise the
standard and effectiveness of the audit of the Company.
The quarterly and full year announcements of the results and the financial
position of the Group before submission to the Board for approval;
The consolidated financial statements of the Group and the Auditors’ Report
before submission to the Board;
The adequacy of the assistance given by the Group’s officers to the external
auditors;
The requirements for approval and disclosure of interested person
transactions, and where necessary, review and seek approval for interested
person transactions;
The non-audit services provided by the external auditors and whether the
provision of such services affects their independence; and
The recommendation to the Board on the appointment or re-appointment of
external auditors and matters relating to the resignation or dismissal ofexternal auditors.
has met with the external auditors, without the presence of Management, at
least once a year;
has explicit authority to investigate any matter within its terms of reference;
has had full access to and cooperation from Management and has full
discretion to invite any director and executive officer to attend its meetings;
and
has been given reasonable resources to enable it to discharge its functionsproperly.
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AUSSINO GROUP LTD And Its Subsidiaries ANNUAL REPORT 2009 33
Risk and Management
Internal Controls and Internal Audit
Code Principle 12:
Internal Controls
Principle 13:
Internal Audit
Code Guideline 12.2:
Internal Controls, including
financial, operational and
compliance controls and
risk management
In addition to the fees paid for audit engagement, the Company has engaged the
Company's external auditors, Messrs Horwath First Trust LLP to perform turnover
certifications for its subsidiary Aussino Home Fashions Pte Ltd.The Company has
also engaged Messrs Horwath First Trust LLP to act as its tax agent, and for its
subsidiaries Aussino Home Fashions Pte Ltd, www.aussino.com Pte Ltd and Sino
London Pte Ltd. Save for the aforementioned, there were no other non-audit feespayable to the Company's external auditors, Messrs Horwath First Trust LLP. The
AC is of the opinion that there is no issue relating to the provision of non-audit
services that may affect their independence.
The Board is responsible for maintaining a system of internal controls to
safeguard shareholders’ interests and the Company’s business and assets. The
Board believes that in the absence of any evidence to the contrary and from due
enquiry, the system of internal controls that has been maintained by the
Management is adequate to meet the needs of the Group in its current businessenvironment.
The effectiveness of the internal control system and procedures are monitored by
Management and the internal audit function is undertaken by the Chief Executive
Officer and Chief Financial Officer who identifies any operating and financial risks
which the Company may face in its activities. Internal audits will be conducted by
designated staff according to their area of expertise and any findings will be
discussed with local Management for continuous improvement to the Group’s
operations. The Chief Financial Officer reports to the AC on any material
non-compliance and internal control weaknesses and oversees the
implementation of any improvement thereto. Based on the information provided
to the AC, nothing has come to the AC’s attention to cause the AC to believe that
the system of internal controls and risk management is inadequate.
The Company regularly reviews and improves its business and operational
activities to identify areas of significant business risks as well as take appropriate
measures to control and mitigate these risks. The Company reviews all significant
controls, policies and procedures and highlights all significant matters to the Audit
Committee and the Board. Details of the Group’s risk management policy are
outlined in Note 27 of the financial statements.
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34 AUSSINO GROUP LTD And Its Subsidiaries ANNUAL REPORT 2009
Dealings In Securities
Code Principle 14 :
Communication with
Shareholders
Code Principle 15:
Communication with
Shareholders
SGX-ST Listing Rule 1207,
Sub-Rule (18) on Dealings
in Securities.
In line with continuous disclosure obligations, the Company is committed to
regular and proactive communication with its shareholders. It is the Board’s policy
that shareholders be informed of all major developments within the Group.
The Company is in regular communication with shareholders. The Company has
invested in external and internal resources to ensure timely, fair and detailed
disclosure of information to the public in compliance with the SGX-ST’s guidelines.
Price-sensitive information and results are released to the public through SGXNET
on a timely basis in accordance with the requirements of SGX-ST. The Company
does not practice selective disclosure.
Notices of shareholders’ meeting are also advertised in a newspaper in Singapore
and are also made available on the SGX-ST’s website. All shareholders of the
Company receive the Annual Report of the Company and the Notice of AGMwithin the mandatory notice period. Shareholders are encouraged to participate
at the Company’s general meetings. The Board (including the Chairmen of the
respective Board Committees), Management, as well as the external auditor,
attend the Company’s AGM to address any questions that shareholders may
have. Shareholders are encouraged to attend the AGM to stay informed of the
Group's strategy and goals. The AGM is the principal forum for dialogue with
shareholders.
In line with Listing Rule 1207(18), the Company has issued an internal guideline
on dealings in securities by officers of the Company and its subsidiaries to provide
guidance to its officers on dealing in the Company’s shares. All directors and
officers of the Company and its subsidiaries who have access to “price sensitive”
information are required to observe this guideline.
All directors and officers have been informed not to deal in the Company’s shares
whilst in possession of “price sensitive” information during the periods
commencing two weeks prior to the announcement of the Company’s financial
statements for each of the first three quarters of its financial year and one month
before the announcement of the Company's full year results. In addition, all
employees are required to observe insider trading laws at all times and are
prohibited from trading whilst in possession of price-sensitive information.
Directors and officers are required to observe insider trading provisions under the
Securities and Futures Act (Chapter 289) at all times even when dealing in the
Company's securities within the permitted periods. Directors of the Company are
required to report all dealings to the Company Secretary.
Communication with Shareholders
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AUSSINO GROUP LTD And Its Subsidiaries ANNUAL REPORT 2009 35
Material Contracts
Interested Person Transactions
SGX-ST Listing Manual
Rulen 1207(8)
Interested Person
Transaction (Rule 907 of
the SGX – ST Listing
Manual)
There are no material contracts of the Company or any of its subsidiaries
involving the interests of the CEO or any Director or controlling shareholder
entered into during the financial year that is required to be disclosed under Rule1207(8) of the SGX-ST Listing Manual.
During the financial year, there were no interested person transactions entered
into by the Group, as defined under the Listing Manual.
Prior to entry by the Group into an interested person transaction, the Board and
the Audit Committee will review such a transaction to ensure that the relevant
rules under Chapter 9 of the SGX-ST Listing Manual are complied with.
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36 AUSSINO GROUP LTD And Its Subsidiaries ANNUAL REPORT 2009
Contents
37 Directors’ Report
39 Statement by Directors
40 Auditor’s Report
42 Balance Sheets
43 Consolidated Income Statement
44 Consolidated Statement of Changes in Equity
45 Consolidated Statement of Cash Flow46 Notes to the Financial Statements
96 Additional Information
97 Shareholding Statistics
99 Notice of Eighteenth Annual General Meeting
103 Proxy Form
AUSSINO GROUP LTD
AND ITS SUBSIDIARIESReports And
FinancialStatementsFinancial Year Ended 30 June 2009
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AUSSINO GROUP LTD And Its Subsidiaries ANNUAL REPORT 2009 37
The directors present their report to the members together with the audited financial statements of AussinoGroup Ltd (the “Company”) and its subsidiaries (the “Group”) for the financial year ended 30 June 2009 andthe balance sheet of the Company as at 30 June 2009.
1. Directors
The directors of the Company in office at the date of this report are as follows:
Anthony Lim Jonathan Lim Helen Chow Edward Chiu Nandakumar Ponniya
2.
3. Directors' interests in shares or debentures
Ultimate holding
company
Foreswood Industrial
CorporationBearer shares of
USD1.00 each Anthony Lim
Alpha Omega Inc Ordinary Shares of USD1.00 each Anthony Lim
The Company Aussino Group Ltd Ordinary Shares Anthony Lim Jonathan Lim Helen Chow
Arrangements to enable directors to acquire benefits by means of the acquisition of sharesand debentures
Neither at the end of nor at any time during the financial year was the Company a party to anyarrangement whose object is to enable the Directors of the Company to acquire benefits by means of theacquisition of shares in or debentures of the Company or any other body corporate.
According to the register kept by the Company for the purposes of section 164 of the SingaporeCompanies Act, Cap 50, none of the directors holding office at the end of the financial year had anyinterest in the shares or debentures of the Company or its related corporations, except as follows:
By virtue of section 7 of the Singapore Companies Act, Cap 50, Anthony Lim is deemed to have interestsin all the subsidiaries of the Company.
* Held by body corporate in which the director has interest by virtue of section 7 of the Singapore Companies Act, Cap 50.
Shareholdings registered inname of director or nominee
Shareholdings in which a directoris deemed to have an interest
Directors’ Report
At 1 July 2009
or date of appointment,
if laterAt
30 June 2009At
21 July 2009
At 1 July 2009
or date of appointment,
if laterAt
30 June 2009At
21 July 2009
10
-
-750
600,000
-
-
4,383,000750
600,000
-
-
4,383,000750
600,000
-
-
134,952,000--
-
100*
165,624,500--
-
100*
165,624,500--
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In the opinion of the directors, the balance sheet of the Company and the consolidated financial statements of
the Group as set out on pages 42 to 95 are drawn up so as to give a true and fair view of the state of affairs ofthe Company and of the Group as at 30 June 2009 and of the results, changes in equity and cash flows of theGroup for the financial year then ended, and at the date of this statement, there are reasonable grounds tobelieve that the Company will be able to pay its debts as and when they fall due.
On behalf of the Board of Directors
Anthony Lim Helen ChowDirector Director
Singapore19 October 2009
Statement by Directors
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40 AUSSINO GROUP LTD And Its Subsidiaries ANNUAL REPORT 2009
We have audited the accompanying financial statements of Aussino Group Ltd. (the “Company”) and itssubsidiaries (collectively, the “Group”) set out on pages 42 to 95, which comprise the balance sheets of theGroup and Company as at 30 June 2009, the consolidated income statement, consolidated statement of cashflows and consolidated statement of changes in equity of the Group for the financial year then ended, and asummary of significant accounting policies and other explanatory notes.
Management’s responsibility for the financial statements
Management is responsible for the preparation and fair presentation of these financial statements inaccordance with the provisions of the Singapore Companies Act, Cap. 50 (the “Act”) and Singapore FinancialReporting Standards. This responsibility includes:
(a)
(b)
(c)
Auditors’ responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted ouraudit in accordance with Singapore Standards on Auditing. Those Standards require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance as to whether thefinancial statements are free from material misstatements.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in thefinancial statements. The procedures selected depend on the auditor’s judgment, including the assessment of
the risks of material misstatement of the financial statements, whether due to fraud or error. In making thoserisk assessments, the auditor considers internal control relevant to the entity’s preparation and fairpresentation of the financial statements in order to design audit procedures that are appropriate in thecircumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internalcontrol. An audit also includes evaluating the appropriateness of accounting policies used and thereasonableness of accounting estimates made by management, as well as evaluating the overall presentationof the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for ouraudit opinion.
The financial statements for the year ended 30 June 2008 were audited by another firm of certified publicaccountants whose report dated 18 September 2008 expressed an unqualified opinion on those financialstatements.
Independent Auditor’s Report to the Membersof Aussino Group Ltd
evising and maintaining a system of internal accounting controls sufficient to provide a reasonableassurance that assets are safeguarded against loss from unauthorised use or disposition; and transactionsare properly authorised and that they are recorded as necessary to permit the preparation of true and fair
profit and loss accounts and balance sheets and to maintain accountability of assets;
selecting and applying appropriate accounting policies; and
making accounting estimates that are reasonable in the circumstances
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AUSSINO GROUP LTD And Its Subsidiaries ANNUAL REPORT 2009 41
Opinion
In our opinion:
(a)
(b)
Horwath First Trust LLP
Public Accountants and
Certified Public Accountants
Singapore
19 October 2009
Independent Auditor’s Report to the Members ofAussino Group Ltd (Continued)
the balance sheet of the Company and the consolidated financial statements of the Group are properlydrawn up in accordance with the provisions of the Act and Singapore Financial Reporting Standards so asto give a true and fair view of the state of affairs of the Company and of the Group as at 30 June 2009, andthe results, changes in equity and cash flows of the Group for the financial year ended on that date.
the accounting and other records required by the Act to be kept by the Company and by those subsidiariesincorporated in Singapore of which we are the auditors have been properly kept in accordance with theprovisions of the Act.
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AUSSINO GROUP LTD And Its Subsidiaries ANNUAL REPORT 2009 43
Consolidated Income StatementFor the financial year ended 30 June 2009
Note
17
18
21
20
22
23
23
2009
$
81,639,280
(46,599,554)
35,039,726
5,678,781
(24,688,683)
(16,308,402)(3,131,853)
(3,410,431)
(315,287)
(3,725,718)
734,185
(2,991,533)
(2,574,823)
(416,710)
(2,991,533)
(1.07)
(1.07)
2008
$
Note 29
94,949,797
(52,665,024)
42,284,773
3,460,481
(23,287,344)
(19,345,149)(554,024)
2,558,737
(442,408)
2,116,329
(112,964)
2,003,365
2,004,801
(1,436)
2,003,365
0.84
0.84
Revenue
Cost of sales
Gross profit
Other income
Selling and distribution expenses
Administrative expensesOther expenses
(Loss)/Profit from operations
Finance costs
(Loss)/Profit before tax
Income tax credit/(expense)
(Loss)/Profit for the year
Attributable to:
Equity holders of the Company
Minority interests
(Loss)/Earnings per share (cents)
Basic
Diluted
The accompanying notes are an integral part of the financial statements.
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44 AUSSINO GROUP LTD And Its Subsidiaries ANNUAL REPORT 2009
Consolidated Statement of Changes in EquityFor the financial year ended 30 June 2009
S h a r e
c a p i t a l
$
1 6 , 6
6 5 , 9
2 2 -
1 6 , 6
6 5 , 9
2 2 -
1 6 , 6
6 5 , 9
2 2 - - -
1 6 , 6
6 5 , 9
2 2 - - -
1 6 , 6
6 5 , 9
2 2
1 6 , 6
6 5 , 9
2 2 -
1 6 , 6
6 5 , 9
2 2 -
1 6 , 6
6 5 , 9
2 2 -
1 6 , 6
6 5 , 9
2 2 - -
1 6 , 6
6 5 , 9
2 2
R e s t r i c t e
d
r e s e r v e $
1 , 2
4 5 , 3
4 5 -
1 , 2
4 5 , 3
4 5
( 1 4 , 8 3
8 )
1 , 2
3 0 , 5
0 7 - - -
1 , 2
3 0 , 5
0 7
2 6 4 , 2
4 6 - -
1 , 4
9 4 , 7
5 3
1 , 4
9 4 , 7
5 3 -
1 , 4
9 4 , 7
5 3
1 0 5 , 9
1 0
1 , 6
0 0 , 6
6 3 -
1 , 6
0 0 , 6
6 3
( 6
3 ) -
1 , 6
0 0 , 6
0 0
T r a n s l a t i o n
r e s e r v e
$
( 3 , 7
3 8 , 3
8 2 ) -
( 3 , 7
3 8 , 3
8 2 )
( 4 , 0
4 2 , 6
9 5 )
( 7 , 7
8 1 , 0
7 7 ) - - -
( 7 , 7
8 1 , 0
7 7 ) - - -
( 7 , 7
8 1 , 0
7 7 )
( 7 , 8
8 4 , 7
4 2 )
1 0 3 , 6
6 5
( 7 , 7
8 1 , 0
7 7 )
3 8 0 , 1
8 3
( 7 , 4
0 0 , 8
9 4 ) -
( 7 , 4
0 0 , 8
9 4 ) - -
( 7 , 4
0 0 , 8
9 4 )
F a i r v a l u e
r e s e r v e
$
( 1 , 0
6 2 , 3
7 1 ) -
( 1 , 0
6 2 , 3
7 1 ) -
( 1 , 0
6 2 , 3
7 1 ) - - -
( 1 , 0
6 2 , 3
7 1 ) - - -
( 1 , 0
6 2 , 3
7 1 )
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AUSSINO GROUP LTD And Its Subsidiaries ANNUAL REPORT 2009 45
Consolidated Statement of Cash FlowFor the financial year ended 30 June 2009
a
Cash flows from operating activities(Loss)/Profit before tax and minority interests
Adjustments: Amortisation of intangible assets
Bad trade debts written off Allowance for trade doubtful debts written back Allowance for trade doubtful debts Provision of expenses written back Depreciation of property, plant and equipment Gain on disposal of property, plant and equipment, net Property, plant and equipment written off Property, plant and equipment adjustment Impairment loss of property, plant and equipment
Interest expense Interest income
Operating profit before working capital changes Inventories Trade and other receivables Trade and other payables
Cash generated from operationsInterest paidInterest income receivedIncome taxes paid
Net cash generated from operating activities
Cash flows from investing activitiesProceeds from disposal of property, plant and equipmentAcquisition of a subsidiaryPurchase of property, plant and equipmentAcquisition of intangible assetsCapital contribution by minority interests
Net cash used in investing activities
Cash flows from financing activitiesDividends paidProceeds from borrowingRepayment of bank term loansRepayment of finance lease obligations
Net cash used in financing activities
Effects of exchange rate changes in cash and cash equivalents
Net decrease in cash and cash equivalentsCash and cash equivalents at beginning of year
Cash and cash equivalents at end of year
The accompanying notes are an integral part of the financial statements.
2009$
(3,725,718)
2,970368
-487,738
-3,021,975(45,339)233,702(60,541)409,787
315,287(74,622)
565,6074,383,023
(4,779,217)475,385
644,798(140,369)
74,622(267,248)
311,803
186,836-
(2,453,354)(26,192)
-
(2,292,710)
(408,000)2,000,000
(4,161,681)(568,680)
(3,138,361)
232,853
(4,886,415)15,257,347
10,370,932
Note
12
12
2008 $
Note 29
2,116,329
2,59526,226
(30,081)26,364
(377,859)3,277,256(302,500)
497,198(2,416)
-
442,408(426,222)
5,249,298(3,005,320)
5,089,5622,462,581
9,796,121(267,694)
426,222(646,651)
9,307,998
703,391(3,016,324)(3,315,243)
(157)262
(5,628,071)
(3,000,000)1,361,681
(2,800,000)(338,236)
(4,776,555)
(3,739,108)
(4,835,736)20,093,083
15,257,347
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46 AUSSINO GROUP LTD And Its Subsidiaries ANNUAL REPORT 2009
Notes to the Financial StatementsFor the financial year ended 30 June 2009
These notes are an integral part of and should be read in conjunction with the accompanying financial statements.
1. GENERAL INFORMATION
2. SIGNIFICANT ACCOUNTING POLICIES
Basis of preparation
The Company is a limited company incorporated and domiciled in Singapore and publicly traded on theSingapore Exchange Securities Trading Limited. The address of the Company's registered office andprincipal place of business is 1 Scotts Road, #24-05/07, Shaw Centre, Singapore 228208.
The Company's immediate and ultimate holding company is Foreswood Industrial Corporation, acompany incorporated in Samoa.
The principal activities of the Company are those of investment holding and the provision of managementservices to its subsidiaries. The principal activities of its subsidiaries are disclosed in Note 6 to thefinancial statements.
The consolidated financial statements and balance sheet of the Company for the financial year ended30 June 2009 were authorised for issue in accordance with a resolution of the Board of Directors on19 October 2009.
The financial statements are prepared in accordance with the historical cost convention, except asdisclosed in the accounting policies below and are drawn up in accordance with the provisions of theSingapore Companies Act, Cap 50 and the Singapore Financial Reporting Standards (“FRS”).
The financial statements are presented in Singapore dollars unless otherwise indicated.
The preparation of financial statements in conformity with FRS requires management to exercise its judgment in applying the Group’s accounting policies. It also requires the use of accounting estimatesand assumptions that affect the reported amounts of assets and liabilities at the date of the financialstatements, and the reported amounts of revenues and expenses during the financial year. Althoughthese estimates are based on management’s best knowledge of current events and actions, actualresults may ultimately differ from those estimates. Critical accounting estimates and assumptions usedthat are significant to the financial statements and areas involving a higher degree of judgment orcomplexity are disclosed below.
New accounting standards and FRS interpretations
Certain new standards, amendments and interpretations to existing standards have been published as of
the balance sheet date but are not yet effective and which the Group has not early adopted.
Effective forannual periodsbeginning on
or after
FRS 1 (Revised 2008)
FRS 1
FRS 23
FRS 27
FRS 32
1 January 2009
1 January 2009
1 January 2009
1 January 2009
1 January 2009
Presentation of financial statements
Presentation of Financial Statements– Amendments relating to Puttable Financial Instrumentsand Obligations Arising on Liquidation and Current /Non-current Classification of Derivatives
Borrowing Costs
Consolidated and Separate Financial Statements– Amendments relating to Cost of an Investment in a
Subsidiary, Jointly Controlled Entity or AssociateFinancial Instruments: Presentation– Amendments relating to Puttable Financial Instrumentsand Obligations Arising on Liquidation and Current /Non-current Classification of Derivatives
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AUSSINO GROUP LTD And Its Subsidiaries ANNUAL REPORT 2009 47
Notes to the Financial StatementsFor the financial year ended 30 June 2009 (Continued)
vv
2. SIGNIFICANT ACCOUNTING POLICIES (Continued)
New accounting standards and FRS interpretations (Continued)
The Group’s assessment of the impact of adopting these standards, amendments and interpretations thatare relevant to the Group is set out below:
FRS 1 (revised 2008) will become effective for the Group’s financial statements for the year ending 30June 2010. The revised standard requires an entity to present, in a statement of changes in equity, allowner changes in equity. All non-owner changes in equity (i.e. comprehensive income) are required to bepresented in one statement of comprehensive income or in two statements (a separate income statementand a statement of comprehensive income). Components of comprehensive income are not permitted tobe presented in the statement of changes in equity. In addition, a statement of financial position isrequired at the beginning of the earliest comparative period following a change in accounting policy, thecorrection of an error or the reclassification of items in the financial statements. FRS 1 (revised 2008)
does not have any impact on the Group’s financial position or results.
FRS 23 will become effective for the Group’s financial statements for the year ending 30 June 2010. FRS23 removes the option to expense borrowing costs and requires an entity to capitalise borrowing costsdirectly attributable to the acquisition, construction or production of a qualifying asset as part of the costof that asset. The Group’s current policy is consistent with the FRS 23 requirement to capitaliseborrowing costs.
Amendments to FRS 102 will become effective for the Group’s financial statements for the year ending30 June 2010. These amendments clarify the definition of vesting conditions and to prescribe theaccounting treatment of an award that is effectively cancelled because non-vesting condition is notsatisfied. The adoption of these amendments is not expected to have any impact on the financialposition or performance of the Group.
FRS 39
FRS 101
FRS 102
FRS 103
FRS 107
FRS 108
Improvements to FRSs 2008
Improvements to FRSs 2009
INT FRS 113
INT FRS 116
INT FRS 117
INT FRS 118
1 July 2009
1 January 2009
1 January 2009
1 July 2009
1 January 2009
1 January 2009
1 January 2009
1 July 2009
1 July 2008
1 October 2008
1 July 2009
1 July 2009
Financial Instruments: Recognition and Measurement- Amendments relating to Eligible Hedged Items
First Time Adoption of Financial Reporting Standards– Amendments relating to Cost of an Investment in aSubsidiary, Jointly Controlled Entity or Associate
Share-based Payment – Vesting Conditions and Cancellations
Business Combinations
Financial Instruments: Disclosures- Amendments to FRS 107 Financial Instruments:Disclosure – Improving Disclosures about FinancialInstruments
Operating Segments
Customer Loyalty Programmes
Hedges of a Net Investment in a Foreign Operation
Distributions of Non-cash Assets to Owners
Transfer of Assets from Customers
Effective forannual periodsbeginning on
or after
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48 AUSSINO GROUP LTD And Its Subsidiaries ANNUAL REPORT 2009
Notes to the Financial StatementsFor the financial year ended 30 June 2009 (Continued)
2. SIGNIFICANT ACCOUNTING POLICIES (Continued)
New accounting standards and FRS interpretations (Continued)
Basis of consolidation
FRS 108 will become effective for financial statements for the year ending 30 June 2010. FRS 108supersede FRS 14 - Segment Reporting and requires the Group to report the financial performance of itsoperating segments based on the information used internally by management for evaluating segmentperformance and deciding on allocation of resources. Such information may be different from theinformation included in the financial statements, and the basis of its preparation and reconciliation to theamounts recognised in the financial statements shall be disclosed. The Group will apply FRS 108 from1 July 2009 and provide comparative information that conforms to the requirements of FRS 108. Theimpact of this standard on the other segment disclosures is still to be determined. As this is a disclosurestandard, it will have no impact on the financial position or financial performance of the Group whenimplemented in financial year 2010.
Improvements to FRSs 2008 will become effective for the Group’s financial statements for the yearending 30 June 2010, except for the amendment to FRS 105 Non-current Assets Held for Sale andDiscontinued Operations which will become effective for the year ending 30 June 2011. Improvements toFRSs 2008 contain amendments to numerous accounting standards that result in accounting changes forpresentation, recognition or measurement purposes and terminology or editorial amendments. The Groupis in the process of assessing the impact of these amendments.
Improvements to FRSs 2009 will become effective for the Group’s financial statements for the financialyear ending 30 June 2010 for amendments relating to:
- FRS 102 Share-based payment - FRS 38 Intangible assets - INT FRS 109 Reassessment of embedded derivatives - INT FRS 116 Hedges of a net investment in a foreign operation
Improvements to FRSs 2009 will become effective for the Group’s financial statements for the financialyear ending 30 June 2011 for amendments relating to:
- FRS 1 Presentation of financial statements - FRS 7 Statement of cash flows - FRS 17 Leases - FRS 36 Impairment of assets - FRS 39 Financial Instruments: Recognition and measurement
- FRS 105 Non-current assets held for sale and discontinued operations - FRS 108 Operating segments
Improvements to FRSs 2009 contain certain amendments to numerous accounting standards that result
in accounting changes for presentation, recognition or measurement and disclosure purposes. The Groupis in the process of assessing the impact of these amendments.
Subsidiaries are entities (including special purpose entities) over which the Group has power to governthe financial and operating policies, generally accompanying a shareholding of more than one half of thevoting rights. The existence and effect of potential voting rights that are currently exercisable orconvertible are considered when assessing whether the Group controls another entity.
The purchase method of accounting is used to account for the acquisition of subsidiaries. The cost of anacquisition is measured as the fair value of the assets given, equity instruments issued or liabilitiesincurred or assumed at the date of exchange, plus costs directly attributable to the acquisition.Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combinationare measured initially at their fair values on the date of acquisition, irrespective of the extent of anyminority interest.
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50 AUSSINO GROUP LTD And Its Subsidiaries ANNUAL REPORT 2009
Notes to the Financial StatementsFor the financial year ended 30 June 2009 (Continued)
2. SIGNIFICANT ACCOUNTING POLICIES (Continued)
Intangible assets
Patents
Acquired patents are stated at cost less accumulated amortisation and any impairment in value.Amortisation is calculated using the straight-line method to allocate the cost of patents over 20 years,representing the period that benefits are expected to be received. The cost of renewing patents is treatedas an expense in the income statement.
Goodwill
Goodwill represents the excess of the cost of an acquisition of subsidiaries over the fair value of theGroup’s share of the identifiable assets, liabilities and contingent liabilities of the acquired subsidiaries at
the date of acquisition.
Goodwill on the acquisition of subsidiaries is recognised separately as intangible assets and carried atcost less accumulated impairment losses.
Impairment of non-financial assets
Goodwill
Goodwill is tested annually for impairment, as well as when there is any indication that the goodwill may beimpaired.
For the purpose of impairment testing of goodwill, goodwill is allocated to each of the Group'scash-generating-units (CGU) expected to benefit from synergies arising from the business combination.
An impairment loss is recognised in the income statement when the carrying amount of a CGU, including thegoodwill, exceeds the recoverable amount of the CGU. Recoverable amount of a CGU is the higher of theCGU's fair value less cost to sell and value-in-use.
The total impairment loss of a CGU is allocated first to reduce the carrying amount of goodwill allocated tothe CGU and then to the other assets of the CGU pro-rata on the basis of the carrying amount of each assetin the CGU.
An impairment loss on goodwill is recognised in the income statement and is not reversed in a subsequentperiod.
Intangibles assets, property, plant and equipment and investments in subsidiaries
Intangible assets, property, plant and equipment and investments in subsidiaries are reviewed forimpairment whenever there is any indication that these assets may be impaired. If any such indicationexists, the recoverable amount (i.e. the higher of the fair value less cost to sell and the value-in-use) of theasset is estimated to determine the amount of impairment loss.
For the purpose of impairment testing of these assets, recoverable amount is determined on an individualasset basis unless the asset does not generate cash flows that are largely independent of those from otherassets. If this is the case, 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, thecarrying amount of the asset (or CGU) is reduced to its recoverable amount.
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AUSSINO GROUP LTD And Its Subsidiaries ANNUAL REPORT 2009 51
Notes to the Financial StatementsFor the financial year ended 30 June 2009 (Continued)
An impairment loss for an asset other than goodwill is reversed if, and only if, there has been a change inthe estimates used to determine the asset's recoverable amount since the last impairment loss wasrecognised. The carrying amount of an asset other than goodwill is increased to its revised recoverableamount, provided that this amount does not exceed the carrying amount that would have beendetermined (net of amortisation or depreciation) had no impairment loss for an asset other than goodwillis 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 thesame revalued asset was previously recognised in the income statement, a reversal of that impairmentloss is also recognised in the income statement.
The Group classifies its financial assets in the following categories, as applicable: financial assets at fairvalue through profit or loss, loans and receivables, held-to-maturity investments and available-for-salefinancial assets. The classification depends on the purpose for which the assets were acquired.Management determines the classification of its financial assets at initial recognition and re-evaluates thisdesignation at every reporting date, with the exception that the designation of financial assets at fairvalue through profit or loss is not revocable. As at the balance sheet date, the Group did not have anyfinancial assets in the category of held-to-maturity investments and fair value through profit and loss.
Investments are recognised on the date the Group commits to purchase the investments and are initially
measured at fair value plus directly attributable transaction costs. Financial assets are derecognised whenthe rights to receive cash flows from the financial assets have expired or have been transferred and theGroup has transferred substantially all the risks and rewards of ownership of these assets.
The fair values of quoted financial assets are based on current bid prices. If the market for a financialasset is not active, the Group establishes fair value by using appropriate valuation techniques.
Loans and receivables
These assets are non-derivative financial assets with fixed or determinable payments that are not quotedin an active market. They arise principally through the provision of goods and services to customers(trade debtors), but also incorporate other types of contractual monetary asset. Loans and receivablesare initially recognised at fair value plus transaction costs. They are subsequently carried at amortisedcost using the effective interest method. Loans and receivables include trade and other receivables on the
balance sheets.
Available-for-sale financial assets
These assets are non-derivative financial assets that are either designated in this category or notincluded in other categories of financial assets, and comprise the Group's strategic investments in entitiesnot qualifying as subsidiaries, associates or jointly controlled entities. After initial recognition at fair value,the financial assets are subsequently re-measured to fair value at each balance sheet date with all fairvalue changes, other than impairment in value, taken to equity. Where a decline in the fair value of anavailable-for-sale financial asset constitutes objective evidence of impairment, the amount of the loss isremoved from equity and recognised in the income statement.
2. SIGNIFICANT ACCOUNTING POLICIES (Continued)
Impairment of non-financial assets (Continued)
Intangibles assets, property, plant and equipment and investments in subsidiaries (Continued)
Financial assets and financial liabilities
Financial assets
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The Group classifies its financial liabilities into one of the two categories, as applicable: fair value throughprofit or loss and other financial liabilities. “Fair value through profit or loss” category comprises onlyout-of-the-money derivatives which the Group did not have any as at the balance sheet date. “Otherfinancial liabilities” include trade and other payables and bank borrowings on the balance sheets.
Derivative financial instruments
The Group uses derivative financial instruments, primarily interest rate swaps, to manage its exposure tointerest rate risk arising from bank borrowings. The Group does not use derivative financial instruments
for speculative purposes. However, derivative financial instruments of the Group that do not qualify forhedge accounting are accounted for as trading instruments.
Derivatives are initially recognised at fair value on the date a derivative contract is entered into and aresubsequently re-measured at their fair value at each balance sheet date. Changes in the fair value ofderivative financial instruments that do not qualify for hedge accounting are recognised immediately inthe income statement.
Trade and other receivables
Trade and other receivables are recognised initially at fair value and are subsequently measured atamortised cost, where applicable, using the effective interest method, less allowance for impairment. Anallowance for impairment of trade receivables is established when there is objective evidence that theGroup will not be able to collect all amounts due according to the original terms of the receivables. The
amount of the allowance is the difference between the asset's carrying amount and the present value ofthe estimated future cash flows, discounted at the effective interest rate. The amount of the allowance isrecognised in the income statement.
Inventories
Inventories purchased for resale are stated at the lower of cost and net realisable value.
Cost is determined on the weighted average basis and includes all costs of purchase, costs of conversionand other costs incurred in bringing the inventories to their present location and condition.
Net realisable value is the estimated selling price at which the inventories can be realised in the normalcourse of business after allowing for the costs of realisation. Allowance is made for obsolete, slow-moving
and defective inventories.
Cash and cash equivalents
Cash consists of cash on hand and cash with banks (including unpledged fixed deposits). Cashequivalents are short-term, highly liquid investments that are readily convertible to known amounts ofcash which are subject to an insignificant risk of changes in value.
For the purpose of the consolidated statement of cash flow, cash and cash equivalents are presented netof bank overdraft which is repayable on demand and which forms an integral part of the Group’soperating cash cycle.
52 AUSSINO GROUP LTD And Its Subsidiaries ANNUAL REPORT 2009
Notes to the Financial StatementsFor the financial year ended 30 June 2009 (Continued)
2. SIGNIFICANT ACCOUNTING POLICIES (Continued)
Financial assets and financial liabilities (Continued)
Financial liabilities
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AUSSINO GROUP LTD And Its Subsidiaries ANNUAL REPORT 2009 53
Notes to the Financial StatementsFor the financial year ended 30 June 2009 (Continued)
2. SIGNIFICANT ACCOUNTING POLICIES (Continued)
Trade and other payables
Trade and other payables are initially measured at fair value and are subsequently measured atamortised cost, where applicable, using the effective interest rate method.
Provisions
Provisions are recognised when the Group has a present obligation as a result of past events, and it isprobable that the Group will be required to settle the obligation. Provisions are measured at theDirectors’ best estimate of the expenditure required to settle the obligation at the balance sheet date,and are discounted to present value where the effect is significant.
Bank borrowings
Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings aresubsequently stated at amortised cost. Any difference between the proceeds (net of transaction costs)and the redemption value is taken to the income statement over the period of the borrowings using theeffective interest method.
Borrowings which are due to be settled within twelve months after the balance sheet date are included incurrent borrowings in the balance sheet even though the original term was for a period longer thantwelve months and an agreement to refinance, or to reschedule payments, on a long-term basis iscompleted after the balance sheet date and before the financial statements are authorised for issue.Other borrowings due to be settled more than twelve months after the balance sheet date are includedin non-current borrowings in the balance sheet.
Share capital
Ordinary shares are classified as equity. Incremental costs directly attributable to the issuance of newequity instruments are taken to equity as a deduction, net of tax, from the proceeds.
Revenue recognition
Sale of goods
Revenue is recognised when significant risks and rewards of ownership of the goods have beentransferred to the buyer, it is probable that the economic benefits associated with the transaction willflow to the Group and the revenue and costs, if applicable, can be measured reliably.
Interest income
Interest income is accrued on a time-apportionment basis using the effective interest method.
Dividend income
Dividend income is recognised in the income statement when the shareholder’s right to receive thepayment is established.
Management fee income
Management fee income is recognised when the services are rendered.
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54 AUSSINO GROUP LTD And Its Subsidiaries ANNUAL REPORT 2009
Notes to the Financial StatementsFor the financial year ended 30 June 2009 (Continued)
2. SIGNIFICANT ACCOUNTING POLICIES (Continued)
Income tax
Income tax for the financial year comprises current and deferred tax. Income tax is recognised in incomestatement except to the extent that it relates to items recognised directly in equity, in which case, suchtax is recognised in equity.
Current tax is the expected tax payable on the taxable income for the financial year, using tax ratesenacted at the balance sheet date, and any adjustment to tax payable in respect of previous financialyears.
Deferred tax is provided using the liability method, providing for temporary differences between the taxbases of assets and liabilities and their carrying amounts in the financial statements. The amount ofdeferred tax is provided based on the expected manner of realisation or settlement of the carrying
amount of assets and liabilities, using tax rates enacted at the balance sheet date.
A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will beavailable against which the asset can be utilised. Deferred tax assets are reduced to the extent that it isno longer probable that the related tax benefit will be realised.
Employees’ benefits
Defined contribution plans
Contributions to defined contribution plans are recognised as an expense in the income statement in thesame financial year as the employment that gives rise to the contributions.
Employees’ leave entitlement
Employee’s entitlements to annual leave are recognised when they accrue to employees. A provision ismade for the estimated liability for annual leave as a result of services rendered by employees up to thebalance sheet date.
Finance costs
Interest expenses and similar charges are expensed in the income statement in the financial year inwhich they are incurred.
Dividends
Interim dividends are recorded in the financial year in which they are declared payable. Final dividends
are recorded in the financial year in which the dividends are approved by the shareholders.
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AUSSINO GROUP LTD And Its Subsidiaries ANNUAL REPORT 2009 55
Notes to the Financial StatementsFor the financial year ended 30 June 2009 (Continued)
2. SIGNIFICANT ACCOUNTING POLICIES (Continued)
Leases
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risksand rewards of ownership of the related assets to the lessee. All other leases are classified as operatingleases.
Finance leases
Assets acquired through finance leases are capitalised at the lower of its fair value and the present valueof the minimum lease payments at the inception of the leases. The corresponding liability is included inthe balance sheet as a finance lease obligation. Lease payments are apportioned between financecharges and reduction of the lease obligation so as to achieve a constant rate of interest on theremaining balance of the liability. Finance charges are taken to the income statement.
Operating leases
Payments made under operating leases (net of any incentives received from the lessor) are taken to theincome statement on a straight-line basis over the period of the lease.
When an operating lease is terminated before the lease period has expired, any payment required to bemade to the lessor by way of penalty is recognised as an expense in the period in which terminationtakes place.
Foreign currencies
Functional and presentation currency
Items included in the financial statements of each entity in the Group are measured using the currencyof the primary economic environment in which the entity operates (the "functional currency"). Theconsolidated financial statements are presented in Singapore Dollars, which is the Company's functionaland presentation currency.
Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange ratesprevailing at the dates of the transactions. Foreign exchange gains and losses resulting from thesettlement of such transactions and from the translation at year-end exchange rates of monetary assetsand liabilities denominated in foreign currencies are recognised in the income statement.
Translation differences on non-monetary items, such as equities held at fair value through profit or loss,
are recognised in the income statement. Translation differences on non-monetary items, such as equitiesclassified as available-for-sale financial assets, are included in equity.
Translation of Group entities’ financial statements
The results and financial position of all subsidiaries (none of which has the currency of ahyperinflationary economy) that have a functional currency different from the presentation currency aretranslated into the presentation currency as follows:-
(i) assets and liabilities are translated at the closing rate at the balance sheet date;(ii) income and expenses are translated at average exchange rate; and(iii) all resulting exchange differences are taken to the foreign currency translation reserve within equity.
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56 AUSSINO GROUP LTD And Its Subsidiaries ANNUAL REPORT 2009
Notes to the Financial StatementsFor the financial year ended 30 June 2009 (Continued)
2. SIGNIFICANT ACCOUNTING POLICIES (Continued)
Segment reporting
3. CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS
For management purposes, the Group is organised on a world-wide basis into four main geographicalsegments. Geographical segments are used by the Group as its primary segment reporting format.
A geographical segment is a particular economic environment that an enterprise is engaged in providingproducts or services which is subject to risks and returns that are different from those of segmentsoperating in other economic environments. A business segment is a distinguishable component of anenterprise that is engaged in providing an individual product or service or a group of related products orservices and that is subject to risks and returns that are different from those of other business segments.
Segment revenue, expenses and results include transfers between business segments and geographicalsegments.
Related parties
Parties are considered to be related if one party has the ability, directly or indirectly, to control the otherparty, or exercise significant influence over the other party in making financial and operating decisions.Parties are also considered to be related if they are subject to common control or common significantinfluence. Related parties may be individuals or corporate entities.
Critical accounting estimates and judgments made at the balance sheet date that have a significant risk ofcausing a material adjustment to the carrying amounts of assets and liabilities within the next financial yearare discussed below.
Impairment of goodwill
Determining whether goodwill is impaired requires an estimation of the value in use of the cash-generatingunits to which goodwill has been allocated. The value in use calculation requires the entity to estimate thefuture cash flows expected to arise from the cash-generating unit and a suitable discount rate in order tocalculate present value.
Impairment of investments in subsidiaries
In assessing whether the investments in subsidiaries are impaired, the Company used value-in-usecalculations. These calculations are based on cash flow projections prepared using financial budgetscovering a three-year period. The management has considered and determined the factors applied in thefinancial budgets, which include budgeted gross margins and average growth rates. The budgeted grossmargins are based on past performance and the average growth rates and discount rates used are basedon management’s best estimate regarding the industry and sector performance, changes in consumertastes and trends and overall economic environment.
Depreciation of property, plant and equipment
The depreciable costs of assets are allocated on a straight-line basis over their estimated useful lives.Management estimates the useful lives of these assets to be within 3 to 50 years. The carrying amounts ofthe Group’s and the Company’s property, plant and equipment as at 30 June 2009 were approximately$13,575,000 (2008: $14,383,000) and $1,208,000 (2008: $1,407,000) respectively. Changes in theexpected level of usage and technological developments could impact the economic useful lives and theresidual values of these assets (Note 4).
Changes in the government regulations and industrial circumstances could also have an impact on the
requirement for provision for dismantlement, removal and restoration costs and the estimated amounts.
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AUSSINO GROUP LTD And Its Subsidiaries ANNUAL REPORT 2009 57
Notes to the Financial StatementsFor the financial year ended 30 June 2009 (Continued)
3. CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS (Continued)
Income taxes
The Group is subject to income taxes in numerous jurisdictions. Judgment is required in determining thecapital allowances and deductibility of certain expenses when estimating the provision for income taxes.There were transactions during the ordinary course of business for which the ultimate tax determinationis uncertain. The Group recognises liabilities for anticipated tax issues, if any, based on judgment ofwhether additional taxes will be due. Where the final tax outcome of these matters is different from theamounts that were initially recorded, such differences will impact the income tax and deferred taxprovisions in the period in which the outcome is known.
Impairment of trade and other receivables
The determination of whether these financial assets are impaired requires judgment to be exercised by
the management. The management has to consider factors, among others, financial position of the
customers and the performance of the industry and sector in which the customers are operating. These
factors affect the judgment made by the management in their assessment of impairment of the trade
and other receivables balances.
Impairment of available-for-sale financial asset
The Group follows the guidance of FRS 39 in determining when an available-for-sale financial asset is
considered impaired. This determination requires significant judgment. The Group evaluates, among
other factors, the duration and extent to which the fair value of a financial asset is less than its cost, the
financial health of and the near-term business outlook of the issuer of the instrument, including factors
such as industry and sector performance, changes in technology and operational and financing cashflow. The Group’s evaluation of financial asset is reflected in Note 7 and has been included in fair value
reserve.
Inventories
To determine whether there is impaired marketability of the inventories, the management has to
exercise judgment in assessing: (1) whether an event has occurred that may affect the inventory value;
and (2) whether the future business strategies will affect the marketability and estimated net realisable
value of the inventory. Changing the relevant assumptions and future business strategies of
management could materially affect the determination of the estimated net realisable values of the
inventories.
Inventories are stated at the lower of cost and net realisable value. The net realisable value is estimated
based on the estimated average realisable value of each category of inventory. The carrying amount of
the Group's inventories at 30 June 2009 was approximately $18,572,000 (2008: $22,955,000).
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58 AUSSINO GROUP LTD And Its Subsidiaries ANNUAL REPORT 2009
Notes to the Financial StatementsFor the financial year ended 30 June 2009 (Continued)
4. PROPERTY, PLANT AND EQUIPMENT
Group
Cost
As at 1.7.2007
Additions
Disposals
Transfer
Acquisition of subsidiaries
Currency translation differences
As at 30.6.2008
As at 1.7.2008
Additions
Adjustments
Disposals
Currency translation differences
As at 30.6.2009
Accumulated depreciationand impairment loss
As at 1.7.2007
Charge for the year
Disposals
Transfer
Currency translation differences
As at 30.6.2008
As at 1.7.2008
Charge for the year
Adjustments
DisposalsImpairment loss
Currency translation differences
As at 30.6.2009
Net book value
As at 1.7.2007
As at 30.6.2008
As at 30.6.2009
Freehold
land
$
1,214,694
-
-
(881,229)
-
-
333,465
333,465
-
-
-
-
333,465
891,755
-
-
(881,229)
(10,526)
-
-
-
-
--
-
-
322,939
333,465
333,465
Buildings and
leasehold
improvements
$
12,080,412
1,465,852
(432,258)
881,229
318,406
(135,973)
14,177,668
14,177,668
1,339,507
12,046
(219,203)
814,118
16,124,136
2,813,203
1,310,803
(60,566)
881,229
(28,604)
4,916,065
4,916,065
1,062,934
-
(43,037)409,787
309,043
6,654,792
9,267,209
9,261,603
9,469,344
Fixtures,
furniture,
fittings and
equipment
$
9,071,351
2,154,835
(1,061,330)
-
20,264
(444,090)
9,741,030
9,741,030
625,910
-
(244,511)
(13,853)
10,108,576
5,551,513
1,454,106
(539,168)
-
(236,188)
6,230,263
6,230,263
1,499,520
-
(167,949)-
(20,357)
7,541,477
3,519,838
3,510,767
2,567,099
Motor
vehicles
$
1,482,569
257,868
-
-
291,478
(14,138)
2,017,777
2,017,777
459,599
291,173
(325,730)
21,159
2,463,978
547,248
373,005
-
-
(4,586)
915,667
915,667
337,645
242,678
(203,260)-
47,502
1,340,232
935,321
1,102,110
1,123,746
Computer
equipment
$
1,360,369
115,757
(14,663)
-
-
(26,364)
1,435,099
1,435,099
28,339
-
(3,518)
495
1,460,415
1,155,980
139,342
(12,843)
-
(22,229)
1,260,250
1,260,250
121,876
-
(3,517)
-
298
1,378,907
204,389
174,849
81,508
Total
$
25,209,395
3,994,312
(1,508,251)
-
630,148
(620,565)
27,705,039
27,705,039
2,453,355
303,219
(792,962)
821,919
30,490,570
10,959,699
3,277,256
(612,577)
-
(302,133)
13,322,245
13,322,245
3,021,975
242,678
(417,763)
409,787
336,486
16,915,408
14,249,696
14,382,794
13,575,162
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59
Notes to the Financial StatementsFor the financial year ended 30 June 2009 (Continued)
4. PROPERTY, PLANT AND EQUIPMENT (Continued)
As at 30 June 2009, the Group had motor vehicles with net book values of $79,788 (2008: $254,773)
and leasehold improvements of $89,212 (2008: $287,834) acquired under finance lease contracts.
The freehold land and building of the Group located at the business premises at 57-59 Wittenberg Drive,
Canning Vale, Perth, Australia, were pledged as security for the bank overdraft facility for the Australian
subsidiary (Note 14).
Company
Cost
As at 1.7.2007
Additions
Disposals
As at 30.6.2008
As at 1.7.2008
Additions
As at 30.6.2009
Accumulated depreciation
As at 1.7.2007
Charge for the year
Disposals
As at 30.6.2008
As at 1.7.2008
Charge for the year
As at 30.6.2009
Net book value
As at 1.7.2007
As at 30.6.2008
As at 30.6.2009
Freehold
land
$
333,465
-
-
333,465
333,465
-
333,465
-
-
-
-
-
-
-
333,465
333,465
333,465
Buildings
$
1,400,370
-
(432,258)
968,112
968,112
-
968,112
227,391
32,848
(60,566)
199,673
199,673
24,203
223,876
1,172,979
768,439
744,236
Fixtures,
furniture,
fittings andequipment
$
124,835
251,187
(19,700)
356,322
356,322
5,716
362,038
77,962
79,382
(4,440)
152,904
152,904
124,297
277,201
46,873
203,418
84,837
Computer
equipment
$
821,928
60,375
-
882,303
882,303
4,000
886,303
700,826
79,708
-
780,534
780,534
59,977
840,511
121,102
101,769
45,792
Total
$
2,680,598
311,562
(451,958)
2,540,202
2,540,202
9,716
2,549,918
1,006,179
191,938
(65,006)
1,133,111
1,133,111
208,477
1,341,588
1,674,419
1,407,091
1,208,330
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60 AUSSINO GROUP LTD And Its Subsidiaries ANNUAL REPORT 2009
Notes to the Financial StatementsFor the financial year ended 30 June 2009 (Continued)
5. INTANGIBLE ASSETS
Goodwill – Note 5(a)
Patents – Note 5(b)
(a) Goodwill
At beginning of financial year
Acquisition of subsidiaries during the financial year
Currency translation differences
At end of financial year
2009
$
2,051,810
59,614
2,111,424
2009
$
2,298,295
-
(246,485)
2,051,810
2008
$
2,298,295
36,409
2,334,704
2008
$
-
2,298,295
-
2,298,295
Goodwill represents the value of brand name, customer lists, sales channels acquired from the Australian
subsidiaries. Goodwill arise from the acquisition of the Australian subsidiaries which was the
cash-generating units for the purpose of impairment testing of the goodwill.
Impairment tests for goodwill
The recoverable amount of the goodwill was determined based on value-in-use calculations. Cash flow
projections used in these calculations were based on financial budgets approved by management covering a
three-year period. Assumptions for the budgets were based on past performance and expectations of the
market development.
Key assumptions used for value-in-use calculations:
Growth rate1 10.00% 10.00%
Discount rate2 9.37% 9.37%
1Growth rate used in the cash flow projections2Pre-tax discount rate applied to the pre-tax cash flow projections
Group
Group
2009 2008
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AUSSINO GROUP LTD And Its Subsidiaries ANNUAL REPORT 2009 61
5. INTANGIBLE ASSETS (Continued)
(b) Patents
Cost
Balance at beginning of financial year
Additions
Currency translation differences
Balance at end of financial year
Accumulated amortisation
Balance at beginning of financial year
Amortisation charge for the financial year
Balance at end of financial year
Net book value
Balance at end of financial year
Amortisation expense is included in “administrative expense” in the income statement.
6. INVESTMENTS IN SUBSIDIARIES
(a) Investments in subsidiaries comprise the following:-
Equity investment at cost
At beginning of financial year
Acquisition during the financial year
Allowance for impairment in value
At end of financial year
Notes to the Financial StatementsFor the financial year ended 30 June 2009 (Continued)
2009
$
52,052
26,192
(17)
78,227
15,643
2,970
18,613
59,614
2008
$
51,895
157
-
52,052
13,048
2,595
15,643
36,409
Group
2009
$
51,895
26,192
-
78,087
15,643
2,970
18,613
59,474
2008
$
51,895
-
-
51,895
13,048
2,595
15,643
36,252
Company
2009
$
16,183,102
100
16,183,202(1,174,879)
15,008,323
2008
$
15,182,341
1,000,761
16,183,102(174,879)
16,008,223
Company
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62 AUSSINO GROUP LTD And Its Subsidiaries ANNUAL REPORT 2009
Notes to the Financial StatementsFor the financial year ended 30 June 2009 (Continued)
Details of subsidiaries are included in Note 6(b).
The Company’s 75% owned subsidiary, Doppio Fashion Group Pty Ltd, has incorporated a new subsidiary Sino
London (Australia) Pty Ltd (”Sino London Australia”) on 4 July 2008. Sino London Australia is in the business of
wholesale and retail of fashion apparel.
The Company has also incorporated a wholly owned subsidiary in Australia, Galleria Fashions International Pty
Ltd (”Galleria Fashions”) on 29 January 2009. The paid up capital is AUD100 (SGD100) through cash
contribution. Galleria Fashions is in the business of wholesale and retail of fashion apparel.
During the financial year, a PRC subsidiary of the Group invested RMB2,500,000 for a 50% equity interest in
another PRC company. Subsequently, the entire investment of RMB2,500,000 was returned back to the
subsidiary. Accordingly, these transactions have not been reflected on the balance sheet of the Group.
6. INVESTMENTS IN SUBSIDIARIES (Continued)
(a) Investments in subsidiaries comprise the following:- (Continued)
Movement of allowance for impairment in value:-
Balance at beginning of financial year
Allowance made during the financial year
Balance at end of financial year
2009
$
174,879
1,000,000
1,174,879
2008
$
174,879
-
174,879
Company
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AUSSINO GROUP LTD And Its Subsidiaries ANNUAL REPORT 2009 63
Notes to the Financial StatementsFor the financial year ended 30 June 2009 (Continued)
6. INVESTMENTS IN SUBSIDIARIES (Continued)
(b) Details of the subsidiaries
Aussino Home FashionsPte Ltd
www.Aussino.comPte Ltd
Sino London Pte Ltd
Aussino Fashion Textiles(Shanghai) Co., Ltd
Aussino Home Fashions(Shanghai) Co., Ltd
Sino Fashion(Shanghai) Co., Ltd
Aussino China Inc
Aussino InternationalCorporation Pty Ltd
Doppio Fashion GroupPty Ltd
Galleria FashionsInternational Pty Ltd
Aussino Malaysia Sdn.Bhd.
Aussino (U.S.A.) Inc.
Retro (U.S.A.) Inc.
Suhan InternationalTrade Co., Ltd
Name of subsidiaries
Held by the Company
Country of
incorporation and
place of business
Effective
percentage
of equity
held by
the Group
Principal activities
Singapore
Singapore
Singapore
People’s Republicof China
People’s Republicof China
People’s Republicof China
People’s Republicof China
Australia
Australia
Australia
Malaysia
United States ofAmerica
United States ofAmerica
Samoa
Wholesale and retail of lifestylehome fashion products
Provision of E-commerce servicesand IT support services to itsrelated companies
Retail of ladies’ fashion apparel
Wholesale and retail of lifestylehome fashion products
Dormant
Dormant
Dormant
Wholesale and distribution oflifestyle home fashion products
Investment holding
Wholesale and retail of fashionapparel
Wholesale and retail of lifestylehome fashion products
Dormant
Wholesale and distribution oflifestyle home fashion products
Export of lifestyle home fashionproducts
2009
%
100
100
100
100
100
100
100
100
75
100
100
100
100
100
2008
%
100
100
100
100
100
100
100
100
75
-
100
100
100
100
*(1)
*(1)
*(1)
*(2)
+
+
+
*(3)
*(6)
*(6)
*(4)
#@
#@
#@
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64 AUSSINO GROUP LTD And Its Subsidiaries ANNUAL REPORT 2009
Notes to the Financial StatementsFor the financial year ended 30 June 2009 (Continued)
6. INVESTMENTS IN SUBSIDIARIES (Continued)
(b) Details of the subsidiaries (Continued)
Aussino (Canada) Inc.
Aussino (Europe) Limited
Sino Fashions (London)Limited
Aussino Fashions GroupLimited
Aussino Korea Inc
Held by subsidiaries
Aussino.com MalaysiaSdn. Bhd.
Aussino InternationalTrade (Shanghai) Co Ltd
Aussino Food & BeverageChina Corporation
Nuovo Uno Pty Ltd
Leo Fashion InternationalPty Ltd
Sino London Pty Ltd
Name of Subsidiaries
Held by the Company
Country of
incorporation and
place of business
Effective
percentage
of equity
held by
the Group
Principal activities
Canada
United Kingdom
United Kingdom
Hong Kong
Korea
Malaysia
People’s Republicof China
People’s Republicof China
Australia
Australia
Australia
Dormant
Dormant
Dormant
Wholesale and retail of lifestylehome fashion products
Wholesale and retail of lifestylehome fashion products
Dormant
Trading, wholesale and retail oflifestyle home fashion products
Dormant
Wholesale and retail of fashionapparel
Wholesale and retail of fashionapparel
Wholesale and retail of fashionapparel
2009
%
100
100
100
100
100
100
100
100
75
75
75
2008
%
100
100
100
100
100
100
100
100
75
75
-
#
#
#
*(5)
#@
*(4)
*(2)
+
*(6)
*(6)
*(6)
*(1) Audited by Horwath First Trust LLP, Singapore
*(2) Audited by BDO China Shu Lun Pan CPA Co., Ltd for consolidation purposes
*(3) Audited by WHK Horwath Perth
*(4) Audited by Horwath Kuala Lumpur, Malaysia
*(5) Audited by CL Partners CPA Limited
*(6) Audited by W L Browne & Associates, Australia
@ Reviewed by Horwath First Trust LLP, Singapore
# Not required to be audited according to the laws in the country of incorporation
+ Not audited as there are no operations after incorporation
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AUSSINO GROUP LTD And Its Subsidiaries ANNUAL REPORT 2009 65
Notes to the Financial StatementsFor the financial year ended 30 June 2009 (Continued)
8. DEFERRED TAX ASSETS
Balance at beginning of financial year
Charge to income statement
Balance at end of financial year
The deferred tax assets arose as a result of:-
Unutilised tax losses
Provisions
The unrecognised deferred tax assets are as follows:
Other temporary differences
Unutilised tax losses
Unabsorbed capital allowances
2009
$
983,154
819,069
1,802,223
1,704,376
97,847
1,802,223
2009
$
(5,804)
14,911,959
490,98315,397,138
2008
$
539,842
443,312
983,154
953,896
29,258
983,154
2008
$
(83,869)
10,614,125
58,07010,588,326
Group
Group
Deferred income tax assets are recognised for tax losses carried forward to the extent that realisation of the
related tax benefits through future taxable profits is probable. The Group had unutilised tax losses and
unabsorbed capital allowances of approximately $14,600,000 and $430,000 (2008: $10,600,000 and $58,000)
respectively at the balance sheet date which can be carried forward and used to offset against future taxable
income subject to meeting certain statutory requirements by various companies in the Group relating to
unutilised tax losses and capital allowances in their respective countries of incorporation. The total unutilised tax
losses of a subsidiary of approximately $9,900,000 (2008: $8,500,000) can only be utilised for set-off against
its future taxable profits within 20 years from the date the tax loss was incurred.
Deferred tax liability amounting to approximately $9,600,000 (2008: $8,690,000) arising from undistributed
earnings of a subsidiary, Suhan International Trade Co., Ltd is not recognised as the Company controls the
rights to distribute these earnings and the Company has neither the need nor the intention to receive dividends
from this subsidiary in the foreseeable future.
7. AVAILABLE-FOR-SALE FINANCIAL ASSET
At balance sheet date, available-for-sale financial asset denominated in British pounds include:-
Listed securities:-
- Equity securities - United Kingdom
Unquoted investment
2009
$
-
367,742
367,742
2008
$
367,742
-
367,742
No impairment loss had been recognised during the financial year against the equity security in United
Kingdom. Management has assessed the carrying value to approximate fair value. There is no movement in
fair value as the company has since been delisted from the UK (London) Stock Exchange.
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2009
$
4,599,821
8,581,972
12,840,556
2,004,699
1,355,219
69,831
124,608
15,721
29,592,427
2009
$
26,364487,738
(7,174)
21,101
528,029
2008
$
4,616,126
5,520,761
9,578,269
2,297,489
1,392,944
80,791
465,644
14,523
23,966,547
2008
$
30,02826,364
(30,271)
243
26,364
2009
$
1,590,520
2,257,352
5,817,995
8,847,938
1,891,783
1,158,810
325,542
-
21,889,940
2008
$
2,436,420
2,749,939
2,204,574
6,517,218
2,033,081
1,417,213
254,311
-
17,612,756
AUSSINO GROUP LTD And Its Subsidiaries ANNUAL REPORT 2009 67
10. TRADE AND OTHER RECEIVABLES (Continued)
Trade and other receivables are denominated in the following currencies:-
Singapore dollar
United States dollar
Australian dollar
Renminbi
Ringgit Malaysia
Korean Won
Hong Kong dollar
Others
Movements in allowance for doubtful trade receivables:-
Balance at beginning of financial year Allowance made during the financial year
Reversal of bad debt provision
Exchange translation difference
Balance at end of financial year
Notes to the Financial StatementsFor the financial year ended 30 June 2009 (Continued)
Company
Group
Group
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68 AUSSINO GROUP LTD And Its Subsidiaries ANNUAL REPORT 2009
Notes to the Financial StatementsFor the financial year ended 30 June 2009 (Continued)
11. FIXED DEPOSITS
12. CASH AND CASH EQUIVALENTS
Cash and bank balances
Fixed deposits
Bank overdraft (secured)
Cash and cash equivalents are denominated in the following currencies:-
Singapore dollar
United States dollar
Australian dollar Renminbi
Ringgit Malaysia
Korean Won
Hong Kong dollar
Others
2009
$
1,278,799
-
-
1,278,799
1,081,272
167,858
28,967-
-
-
-
702
1,278,799
2008
$
2,730,983
-
-
2,730,983
404,602
197,515
2,128,126-
-
-
-
740
2,730,983
Company
2009
$
11,315,125
-
(944,193)
10,370,932
4,590,851
1,384,079
1,620,9451,338,579
123,517
842,303
438,407
32,251
10,370,932
2008
$
13,668,161
1,589,186
-
15,257,347
2,976,939
3,286,046
4,672,1423,041,982
186,387
749,665
306,777
37,409
15,257,347
Group
Group
During the year, fixed deposits mature within an average maturity period of 7 days (2008: 7 days).
The interest rates are ranging from 3.2% to 4.0% (2008: 2.0% to 6.9%) per annum.
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AUSSINO GROUP LTD And Its Subsidiaries ANNUAL REPORT 2009 69
13. TRADE AND OTHER PAYABLES
Trade payables
- third parties (note a)
Non-trade payables
- subsidiaries (note b)
Other payables (note c)
Accrued expenses
Advances from customers
Trade and other payables are denominated in the following currencies:-
Singapore dollar
United States dollar
Australian dollar
Renminbi
Ringgit Malaysia
Korean Won
Hong Kong dollar
Others
Notes to the Financial StatementsFor the financial year ended 30 June 2009 (Continued)
2009
$
2,728,416
27,995,073
117
-
-
-
-
-
30,723,606
2008
$
1,134,227
23,149,080
-
-
-
-
-
-
24,283,307
Company
2009
$
1,030,098
4,462,015
1,452,205
11,745,572
1,396,354
161,470
36,553
-
20,284,267
2008
$
1,126,969
4,025,686
2,060,341
9,181,979
3,248,320
158,408
5,560
1,619
19,808,882
Group
(a)
(b)
(c)
The trade amount owing to third parties is repayable within the normal trade credit terms of 30 days
to 60 days (2008: 30 days to 60 days).
The non-trade amount due to subsidiaries comprises mainly advances which are unsecured,
interest-free and repayable on demand.
Other payables include loan of $751,526 from a shareholder for an Australian subsidiary which is
unsecured, interest-free and no fixed term of repayment.
2009
$
-
30,557,209
18,406
147,991
-30,723,606
2008
$
-
24,017,370
265,937
-
-24,283,307
Company
2009
$
12,647,842
-
5,400,807
1,283,236
952,38220,284,267
2008
$
13,373,081
-
4,768,038
1,269,092
398,67119,808,882
Group
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70 AUSSINO GROUP LTD And Its Subsidiaries ANNUAL REPORT 2009
Notes to the Financial StatementsFor the financial year ended 30 June 2009 (Continued)
14. INTEREST-BEARING LIABILITIES
Current
Bank loan (unsecured)
Bank loan (secured)
Bank overdraft (secured)
Finance leases
Non-current
Bank loan (secured)
Finance leases
Interest-bearing liabilities are denominated in the following currencies:-
Singapore dollar
Australian dollar
2009
$
-
-
-
-
-
-
-
-
-
2009
$
-
-
-
2008
$
2,800,000
-
-
-
2,800,000
-
-
-
2,800,000
2008
$
2,800,000
-
2,800,000
Company
2009
$
-
500,000
944,193
154,898
1,599,091
1,500,000
24,995
1,524,995
3,124,086
2009
$
2,006,840
1,117,246
3,124,086
2008
$
2,800,000
1,361,681
-
304,742
4,466,423
-
268,913
268,913
4,735,336
2008
$
2,811,705
1,923,631
4,735,336
Group
CompanyGroup
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AUSSINO GROUP LTD And Its Subsidiaries ANNUAL REPORT 2009 71
14. INTEREST-BEARING LIABILITIES (Continued)
Notes to the Financial StatementsFor the financial year ended 30 June 2009 (Continued)
2009
$
-
-
-
2009
%
5.00
6.13
Interest
$
(2,812)
(3,258)
(6,070)
(48,949)
(48,385)(97,334)
2008
$
2,800,000
-
2,800,000
2008
%
6.17
9.35
Present
value of
payments
$
24,995
154,898
179,893
268,913
304,742573,655
Company
2009
$
500,000
1,500,000
2,000,000
2008
$
4,161,681
-
4,161,681
Minimum
lease
payments
$
27,807
158,156
185,963
317,862
353,127670,989
Group
The $2,000,000 (2008: Nil) term loan of the Group is secured by a corporate guarantee from the
Company to the bank. This loan is repayable in equal instalments commencing from 1 July 2009 over 48
months and interest is payable at 5 % (2008: Nil) per annum.
The bank loan secured by corporate guarantee provided by the Company to the bank as at 30 June 2008
is $1,361,681. The minority shareholder has given a property pledge to the Company as his 25% share
of the guarantee issued by the Company to the bank. The loan has been fully paid during the current
financial year.
The bank overdraft is secured by a first mortgage over freehold land and building at 57 – 59 Wittenberg
Drive, Canning Vale, Perth, Australia, a mortgage debenture over the assets and uncalled capital of that
subsidiary and a guarantee from the Company.
Maturity of bank loan is as follows:-
Within one year
Within two to five years
Weighted-average effective interest rates per annum at the balance sheet date:-
Bank loan
Finance leases
Finance leases:-
Group
2009
Within 2 to 5 years
Not later than 1 year
2008
Within 2 to 5 years
Not later than 1 year
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74 AUSSINO GROUP LTD And Its Subsidiaries ANNUAL REPORT 2009
Notes to the Financial StatementsFor the financial year ended 30 June 2009 (Continued)
18. OTHER EXPENSES
Bad trade debts written off
Allowance for trade doubtful debts
Property, plant and equipment written off
Impairment loss of property, plant and equipment
Loss on disposal of property, plant and equipment
Foreign exchange loss
Debts written off and costs of administration
Inventories written off
Others
19. PERSONNEL EXPENSES
Salaries, bonuses and allowances
Provident fund and pension contributions
Other staff costs
The above personnel expenses include directors’ remuneration as disclosed in note 20.
2009$
368
487,738
233,702
409,787
-
1,470,304
298,682
279,555
(48,283)
3,131,853
2009
$
11,615,018
1,607,746
281,355
13,504,119
2008$
26,226
26,364
497,198
-
4,236
-
-
-
554,024
2008
$
13,880,819
950,107
303,553
15,134,479
Group
Group
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AUSSINO GROUP LTD And Its Subsidiaries ANNUAL REPORT 2009 75
Notes to the Financial StatementsFor the financial year ended 30 June 2009 (Continued)
20. (LOSS)/PROFIT BEOFRE TAX
This is determined after charging/(crediting) the following:
Allowance for trade doubtful debts
Amortisation of intangible assets
Bad trade debts written off
Allowance for trade doubtful debts written back
Depreciation of property, plant and equipment
Directors' remuneration
- directors of holding company
- directors of subsidiaries
Directors' fees
- directors of holding company
Foreign exchange loss/(gain) – net
Gain on disposal of property, plant and equipment, net
Impairment loss of property, plant and equipment
Non-audit fees
- auditors of the Company
- other auditors
Operating lease expenses Property, plant and equipment written off
Provision of expenses written back
Personnel expenses (Note 19)
21. FINANCE COSTS
Interest expense
- bank loan
- finance leases
- bank overdraft
2009
$
487,738
2,970
368
-
3,021,975
1,017,014
238,631
59,000
721,721
(45,339)
409,787
-
1,890
13,089,954233,702
-
13,504,119
2008
$
26,364
2,595
26,226
(30,081)
3,277,256
1,319,995
273,526
86,000
(2,311,258)
(302,500)
-
16,500
1,341
12,544,279497,198
(377,859)
15,134,479
Group
2009
$
80,719
174,918
59,650
315,287
2008
$
201,594
174,714
66,100
442,408
Group
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76 AUSSINO GROUP LTD And Its Subsidiaries ANNUAL REPORT 2009
Notes to the Financial StatementsFor the financial year ended 30 June 2009 (Continued)
22. INCOME TAX
Current tax
- current year
- under provision in preceding financial year
Deferred tax
- current year
Reconciliation of effective tax:
(Loss)/Profit before income tax
Tax at the applicable tax rate of 17% (2008: 18%)
Tax effect of:
- expenses that are not deductible in determining taxable profit - income tax not subject to tax
- deferred tax assets not recognised
- effect of different tax rates in other countries
- under provision in preceding financial year
- others
Income tax (credit)/expense
2009
$
-
101,970
(836,155)
(734,185)
2009
$
(3,725,718)
(633,372)
279,028(958,837)
1,391,216
(807,477)
101,970
(106,713)
(734,185)
2008
$
526,127
-
(413,163)
112,964
2008
$
2,116,329
380,939
114,595(1,107,293)
1,028,031
(456,136)
144,065
8,763
112,964
Group
Group
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AUSSINO GROUP LTD And Its Subsidiaries ANNUAL REPORT 2009 77
23. (LOSS)/EARNINGS PER SHARE (CENTS)
24. DIVIDENDS
No dividend has been recommended for the financial year ended 30 June 2009.
Notes to the Financial StatementsFor the financial year ended 30 June 2009 (Continued)
The calculations of (loss)/earnings per share are based on the (loss)/profits and numbers of shares shown
below.
(Loss)/Profit attributable to the equity holders of the Company
For basic (loss)/earnings per share
Basic earnings per share amounts as at 30 June 2009 and 30 June 2008 are calculated by dividing net (loss)/
profit for the year attributable to the equity holders of the Company by the number of ordinary shares
outstanding during the financial year.
There is no dilutive (loss)/earnings per share as there is no dilutive potential ordinary share in issue as at the
financial year ended 30 June 2009 and 30 June 2008.
Final tax exempt 1-tier dividend of 0.17 cents (2008: 0.75 cents) per
share paid in respect of financial year ended 30 June 2008 (30 June 2007)
Interim tax exempt 1-tier dividend of Nil (2008: 0.50 cents) per share
paid in respect of the current financial year
2009
$
408,000
-
408,000
2008
$
1,800,000
1,200,000
3,000,000
Company
2009
$
(2,574,823)
2008
$
2,004,801
Group
2009
240,000,000
2008
240,000,000
Number of ordinary shares
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Notes to the Financial StatementsFor the financial year ended 30 June 2009 (Continued)
25. COMMITMENTS AND CONTINGENT LIABILITIES
(a) Operating lease commitments
As at the balance sheet date, there were future minimum lease payments under non-cancellable operating
leases for warehouse, retail outlets and office premises in subsequent accounting periods as follows:-
Future minimum lease payments
- not later than 1 year
- 1 year through 5 years
The above operating lease commitments are based on existing rental rates. The lease agreements provide
for periodic revision of such rates in the future. The leases have varying terms and some of these leases
contain options to extend the lease period and/or provisions for contingent rental.
(b) Other commitments
On 1 October 2007, the Singapore subsidiary entered into a copyright license agreement for the right to use
certain materials and trademarks for the period from 1 October 2007 to 31 December 2009. As at balance
sheet date, the minimum guaranteed copyright royalty payable amounted to $42,000 (2008: $84,000).
(c) Financial support to subsidiaries
The Company has committed to provide financial support to six of its subsidiaries to enable them to operate
as going concern and to meet their obligations for at least 12 months from the date of their respective
directors reports relating to the 30 June 2009 financial statements. The subsidiaries are www.Aussino.com
Pte Ltd, Aussino Malaysia Sdn. Bhd, Nuovo Uno Pty Limited, Galleria Fashions International Pty Ltd, Aussino
International Corporation Pty Limited and Aussino Home Fashions Pte Ltd.
(d) Contingent liabilities
The Company has given guarantee to a bank for the sum of $2,000,000 (2008: Nil) in connection with a
bank loan granted to a subsidiary.
2009
$
11,607,100
14,525,395
26,132,495
2008
$
7,530,025
14,889,443
22,419,468
Group
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Notes to the Financial StatementsFor the financial year ended 30 June 2009 (Continued)
26. SIGNIFICANT RELTAED PARTY TRANSACTIONS
(a) Sale and purchase of goods and services
In addition to the related party information disclosed elsewhere in the financial statements, the following are
related party transactions during the financial year at terms and rates agreed between the parties:-
Management fees from subsidiaries
Dividend income from subsidiaries
b) Compensation of key management personnel
Included in the staff costs is key management personnel compensation as follows:-
Salaries, bonuses and allowances
Provident fund and pension contributions
Directors’ Fee
The remuneration of the directors is determined by Remuneration Committee having regard to the
performance of individuals and market trends.
2009
$
2,348,890
-
2008
$
3,313,667
2,152,105
Company
2009
$
1,236,928
18,717
59,000
1,314,645
2008
$
1,570,531
22,990
86,000
1,679,521
Group
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80 AUSSINO GROUP LTD And Its Subsidiaries ANNUAL REPORT 2009
Notes to the Financial StatementsFor the financial year ended 30 June 2009 (Continued)
27. FINANCIAL RISK MANAGEMENT
Objectives and policies
The Group is exposed to interest rate risk, liquidity risk, credit risk, market risk and foreign currency risk
arising in the normal course of business. The policies for managing each of these risks are summarised below:-
Foreign exchange risk
The Group is also exposed to foreign currency risk on transactions and balances that are denominated in a
currency other than Singapore dollars. The currencies giving rise to this risk are primarily United States
dollars, Australian dollars, PRC Renminbi (RMB) and Ringgit Malaysia. Exposure to foreign currency risk is
monitored on an ongoing basis to ensure that the net exposure is at an acceptable level.
The Group’s currency exposure is as follows:
2009
Financial assets
Cash and bank
balances and
available-for-sale
financial assetTrade and other
receivables
Financial liabilities
Interest-bearing
liabilities
Trade and other
payables
Finance leases
Net financial
assets/(liabilities)
Less: Net financial
liabilities/(assets)
denominated in the
respective entities’
functional currencies
Currency exposure on
financial assets andliabilities
SGD
$
4,590,851
1,423,631
6,014,482
(2,000,000)
(1,030,098)
(6,841)
(3,036,939)
2,977,543
(1,515,463)
1,462,080
USD
$
1,384,079
2,236,487
3,620,566
-
(4,462,015)
-
(4,462,015)
(841,449)
(691,277)
(1,532,726)
AUD
$
2,565,138
5,805,705
8,370,843
(944,193)
(1,452,205)
(173,052)
(2,569,450)
5,801,393
323,518
6,124,911
RMB
$
1,338,579
8,175,472
9,514,051
-
(11,745,572)
-
(11,745,572)
(2,231,521)
2,231,918
397
RM
$
123,517
1,238,936
1,362,453
-
(1,396,354)
-
(1,396,354)
(33,901)
33,901
-
Others
$
1,680,703
1,402,537
3,083,240
-
(198,023)
-
(198,023)
2,885,217
(2,485,224)
399,993
Total
$
11,682,867
20,282,768
31,965,635
(2,944,193)
(20,284,267)
(179,893)
(23,408,353)
8,557,282
(2,102,627)
6,454,655
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AUSSINO GROUP LTD And Its Subsidiaries ANNUAL REPORT 2009 81
Notes to the Financial StatementsFor the financial year ended 30 June 2009 (Continued)
27. FINANCIAL RISK MANAGEMENT (Continued)
Foreign exchange risk (Continued)
2008
Financial assets
Cash and bank
balances and
available-for-sale
financial asset
Trade and other
receivables
Financial liabilities
Interest-bearing
liabilities
Trade and other
payables
Finance leases
Net financial
assets/(liabilities)
Less: Net financial
liabilities/(assets)
denominated in the
respective entities’
functional currencies
Currency exposure on
financial assets and
liabilities
SGD
$
2,976,939
2,133,876
5,110,815
(2,800,000)
(1,126,969)
(11,705)
(3,938,674)
1,172,141
(1,076,529)
95,612
USD
$
3,286,046
2,749,939
6,035,985
-
(4,025,686)
-
(4,025,686)
2,010,299
(3,348,787)
(1,338,488)
AUD
$
4,672,142
1,938,262
6,610,404
(1,361,681)
(2,060,341)
(561,950)
(3,983,972)
2,626,432
(498,304)
2,128,128
RMB
$
3,041,982
6,155,806
9,197,788
-
(9,181,979)
-
(9,181,979)
15,809
(14,227)
1,582
RM
$
186,387
1,647,733
1,834,120
-
(3,248,320)
-
(3,248,320)
(1,414,200)
1,414,200
-
Others
$
1,461,593
1,517,102
2,978,695
-
(165,587)
-
(165,587)
2,813,108
(2,409,575)
403,533
Total
$
15,625,089
16,142,718
31,767,807
(4,161,681)
(19,808,882)
(573,655)
(24,544,218)
7,223,589
(5,933,222)
1,290,367
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82 AUSSINO GROUP LTD And Its Subsidiaries ANNUAL REPORT 2009
Notes to the Financial StatementsFor the financial year ended 30 June 2009 (Continued)
27. FINANCIAL RISK MANAGEMENT (Continued)
Foreign exchange risk (Continued)
The Company’s currency exposure is as follows:
2009
Financial assets
Cash and bank
balances and
available-for-sale
financial asset
Trade and other
receivables
Financial liabilities
Interest-bearing
liabilities
Trade and other
payables
Net financial
assets/(liabilities)
Less: Net financial
liabilities/(assets)
denominated in the
entity’s
functional currencies
Currency exposure on
financial assets and
liabilities
SGD
$
1,081,272
4,599,821
5,681,093
-
(2,728,416)
(2,728,416)
2,952,677
(2,952,677)
-
USD
$
167,858
8,581,972
8,749,830
-
(27,995,073)
(27,995,073)
(19,245,243)
-
(19,245,243)
AUD
$
28,967
12,840,556
12,869,523
-
(117)
(117)
12,869,406
-
12,869,406
RMB
$
-
2,004,699
2,004,699
-
-
-
2,004,699
-
2,004,699
RM
$
-
1,355,219
1,355,219
-
-
-
1,355,219
-
1,355,219
Others
$
702
210,160
210,862
-
-
-
210,862
-
210,862
Total
$
1,278,799
29,592,427
30,871,226
-
(30,723,606)
(30,723,606)
147,620
(2,952,677)
(2,805,057)
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AUSSINO GROUP LTD And Its Subsidiaries ANNUAL REPORT 2009 83
Notes to the Financial StatementsFor the financial year ended 30 June 2009 (Continued)
27. FINANCIAL RISK MANAGEMENT (Continued)
Foreign exchange risk (Continued)
The Company’s currency exposure is as follows:
2008
Financial assets
Cash and bank
balances and
available-for-sale
financial asset
Trade and other
receivables
Financial liabilities
Interest-bearing
liabilities
Trade and other
payables
Net financial
assets/(liabilities)
Less: Net financial
liabilities/(assets)
denominated in the
entity’s
functional currencies
Currency exposure on
financial assets and
liabilities
SGD
$
404,602
4,616,126
5,020,728
(2,800,000)
(1,134,227)
(3,934,227)
1,086,501
(1,086,501)
-
USD
$
197,515
5,520,761
5,718,276
-
(23,149,080)
(23,149,080)
(17,430,804)
-
(17,430,804)
AUD
$
2,128,126
9,578,269
11,706,395
-
-
-
11,706,395
-
11,706,395
RMB
$
-
2,297,489
2,297,489
-
-
-
2,297,489
-
2,297,489
RM
$
-
1,392,944
1,392,944
-
-
-
1,392,944
-
1,392,944
Others
$
368,482
560,958
929,440
-
-
-
929,440
-
929,440
Total
$
3,098,725
23,966,547
27,065,272
(2,800,000)
(24,283,307)
(27,083,307)
(18,035)
(1,086,501)
(1,104,536)
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84 AUSSINO GROUP LTD And Its Subsidiaries ANNUAL REPORT 2009
Notes to the Financial StatementsFor the financial year ended 30 June 2009 (Continued)
Profit after tax
$
(107,291)
107,291
673,740
(673,740)
(1,347,167)
1,347,167
1,415,635
(1,415,635)
Profit after tax
$
(147,234)
147,234
21,281
(21,281)
(1,917,388)
1,917,388
117,064
(117,064)
27. FINANCIAL RISK MANAGEMENT (Continued)
Foreign exchange risk (Continued)
Foreign exchange risk sensitivity
The following table details the sensitivity to a percentage increase and decrease in the Singapore dollar
against the relevant foreign currencies. It indicates the sensitivity rate used when reporting foreign
currency risk internally to key management personnel and represents management’s assessment of the
possible change in foreign exchange rates. The sensitivity analysis includes only outstanding foreign
currency denominated monetary items and adjusts their translation at the period end for the percentage
change in foreign currency rates. The sensitivity analysis includes external loans as well as loans to
foreign operations within the Group where the denomination of the loan is in a currency other than the
currency of the lender or the borrower.
If the USD and AUD change against the SGD by 7% and 11% (2008: 11% and 1%) with all other
variables including tax rate being held constant, the effects arising from the net financial liability/asset
position will be as follows:
Group
USD against SGD- strengthened
- weakened
AUD against SGD
- strengthened
- weakened
Company
USD against SGD
- strengthened
- weakened
AUD against SGD
- strengthened
- weakened
In management’s opinion, the sensitivity analysis is unrepresentative of the inherent foreign exchange
risk as the year end exposure does not reflect the exposure during the year. US dollar denominated sales
are seasonal with lower sales volumes in the last quarter of the financial year, which results in a reduction
in US dollar receivables at year end.
Increase / (Decrease)
2009 2008
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AUSSINO GROUP LTD And Its Subsidiaries ANNUAL REPORT 2009 85
Notes to the Financial StatementsFor the financial year ended 30 June 2009 (Continued)
Less than 1
year
$
(1,444,193)
(20,284,267)
(154,898)
(21,883,358)
(4,161,681)
(19,808,882)
(304,742)
(24,275,305)
-
(30,723,606)
(30,723,606)
(2,800,000)
(24,283,307)
(27,083,307)
Within
2 to 5 years
$
(1,500,000)
-
(24,995)
(1,524,995)
-
-
(268,913)
(268,913)
-
-
-
-
-
-
27. FINANCIAL RISK MANAGEMENT (Continued)
Liquidity risk
The Group monitors and maintains a level of cash and cash equivalents deemed adequate by the
management to finance the Group’s operations and mitigate the effect of fluctuations in cash flows.
The table below analyses the maturity profile of the financial liabilities of the Group and Company based
on contractual undiscounted cash flows.
Group
2009
Interest-bearing liabilities
Trade and other payables
Finance leases
2008
Interest-bearing liabilities
Trade and other payables
Finance leases
Company
2009
Interest-bearing liabilities
Trade and other payables
2008
Interest-bearing liabilities
Trade and other payables
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86 AUSSINO GROUP LTD And Its Subsidiaries ANNUAL REPORT 2009
Notes to the Financial StatementsFor the financial year ended 30 June 2009 (Continued)
27. FINANCIAL RISK MANAGEMENT (Continued)
Interest rate risk
The Group is not exposed to interest rate risk arising from its leasing arrangements and bank borrowings.
Market risk
The Group is exposed to market risk. The Group maintains adequate policies to ensure that it does not
speculate in quoted securities which will subject the Group to excessive loss due to market fluctuations.
Credit risk
Credit risk is limited to the risk arising from the inability of a customer to make payments when due. It is
the Group’s policy to provide credit terms to creditworthy customers. These customers are continually
monitored and therefore, the Group does not expect to incur material credit losses.
The carrying amount of trade and other receivables, fixed deposits and cash and bank balances represent
the Group’s maximum exposure to credit risk. No other financial assets carry a significant exposure to
credit risk. The corporate guarantees provided to the bank on the loan of a subsidiary is $2,000,000.
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AUSSINO GROUP LTD And Its Subsidiaries ANNUAL REPORT 2009 87
Notes to the Financial StatementsFor the financial year ended 30 June 2009 (Continued)
27. FINANCIAL RISK MANAGEMENT (Continued)
Credit Risk (Continued)
The credit risk for trade receivables is as follows:
By Geographical areas
Australia
PRC
Singapore/Malaysia/HongKong/Korea
USA
By type of customers
Related parties
Non-related parties
The age analysis of trade receivables past due but not impaired is as follows:
Past due < 3 months
Past due 3 to 6 months
Past due over 6 months
2009
$
267,799
-
4,463,1525,448,085
10,179,036
10,179,036
-
10,179,036
2009
$
2,159,560
59,464
7,960,012
10,179,036
2008
$
301,206
-
2,620,185
5,042,128
7,963,519
7,963,519
-
7,963,519
2009
$
1,812,994
985,639
5,164,886
7,963,519
CompanyGroup
CompanyGroup
2009
$
984,264
2,014,897
474,9871,258,008
4,732,156
-
4,732,156
4,732,156
2009
$
3,101,518
956,795
673,843
4,732,156
2008
$
1,601,821
3,170,172
1,157,144
740,561
6,669,698
-
6,669,698
6,669,698
2009
$
3,776,487
1,886,766
1,006,445
6,669,698
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88 AUSSINO GROUP LTD And Its Subsidiaries ANNUAL REPORT 2009
Notes to the Financial StatementsFor the financial year ended 30 June 2009 (Continued)
27. FINANCIAL RISK MANAGEMENT (Continued)
Credit risk (Continued)
The carrying amount of trade receivables to be allowed for doubtful debts and the movement in the
related allowance are as follows:
Gross amount
Less: Allowance for doubtful trade receivables
Balance at beginning of financial year
Allowance made during the financial year
Reversal of bad debt provision
Exchange translation difference
Balance at end of financial year
Capital risk
The Group manages its capital to ensure the Group maintain an optimal capital structure so as to support
its business and maximise shareholder value. To achieve this objective, the Group may make adjustments
to its capital structure in view of changes in economic conditions, such as adjust the amount of dividend
payment, return capital to shareholders or issue new shares.
The Group manages its capital based on gearing ratio. The Group’s and Company’s strategies were
unchanged from 2008, and maintaining a gearing ratio within 19% to 21% for the Group, and 58% to
64% for the Company. The gearing ratio is calculated as net debt divided by total capital. Net debt is
calculated as borrowings plus trade and other payables less cash and cash equivalents. Total capital is
calculated as equity plus net debt.
Net debt
Equity attributable to equity holders
Less: restricted reserve
Total equity
Total capital
Gearing ratio
2009
$
10,179,036
-
10,179,036
-
-
-
-
-
2008
$
7,963,519
-
7,963,519
-
-
-
-
-
CompanyGroup
2009
$
5,260,185
(528,029)
4,732,156
26,364
487,738
(7,174)
21,101
528,029
2008
$
6,696,062
(26,364)
6,669,698
30,028
26,364
(30,271)
243
26,364
2009
$
29,444,807
16,791,491
-
16,791,491
46,236,298
64%
2008
$
24,352,324
17,433,531
-
17,433,531
41,785,855
58%
CompanyGroup
2009
$
12,093,228
46,479,317
(1,600,600)
44,878,717
56,971,945
21%
2008
$
10,876,057
48,976,047
(1,494,753)
47,481,294
58,357,351
19%
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AUSSINO GROUP LTD And Its Subsidiaries ANNUAL REPORT 2009 89
Notes to the Financial StatementsFor the financial year ended 30 June 2009 (Continued)
27. FINANCIAL RISK MANAGEMENT (Continued)
Capital risk
The Group manages its capital to ensure the Group maintain an optimal capital structure so as to support
its business and maximise shareholder value. To achieve this objective, the Group may make adjustments
to its capital structure in view of changes in economic conditions, such as adjust the amount of dividend
payment, return capital to shareholders or issue new shares.
The Group manages its capital based on gearing ratio. The Group’s and Company’s strategies were
unchanged from 2008, and maintaining a gearing ratio within 19% to 21% for the Group, and 58% to
64% for the Company. The gearing ratio is calculated as net debt divided by total capital. Net debt is
calculated as borrowings plus trade and other payables less cash and cash equivalents. Total capital is
calculated as equity plus net debt.
Net debt
Equity attributable to equity holders
Less: restricted reserve
Total equity
Total capital
Gearing ratio
2009
$
29,444,807
16,791,491
-
16,791,491
46,236,298
64%
2008
$
24,352,324
17,433,531
-
17,433,531
41,785,855
58%
CompanyGroup
2009
$
12,093,228
46,479,317
(1,600,600)
44,878,717
56,971,945
21%
2008
$
10,876,057
48,976,047
(1,494,753)
47,481,294
58,357,351
19%
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90 AUSSINO GROUP LTD And Its Subsidiaries ANNUAL REPORT 2009
Notes to the Financial StatementsFor the financial year ended 30 June 2009 (Continued)
27. FINANCIAL RISK MANAGEMENT (Continued)
Capital risk (Continued)
Fair values of financial assets and financial liabilities
Fair value is defined as the amount at which the financial instrument could be exchanged in a current
transaction between knowledgeable willing parties in an arm’s length transaction, other than in a forced or
liquidation sale.
As at 30 June 2009, the carrying amount of the financial assets and liabilities approximate their respective
fair values due to the relatively short-term maturity of these financial instruments, except for term loan
where the fair value is determined in accordance with generally accepted pricing models based on
discounted cash flow analysis, as disclosed below.
Bank loan, secured
Finance leases
The interest rates used to discount estimated cash flows, where applicable, are based on the following:
Bank loan, secured
Finance leases
The fair value of the corporate guarantee as disclosed in note 25 (d) are immaterial based on management
estimates.
2009
$
1,216,350
1,532
2009
%
5.38
6.13
2008
$
-
25,143
2008
%
-
9.35
Fair valuesCarrying amountsNote
14
14
2009
$
1,500,000
24,995
2008
$
-
268,913
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AUSSINO GROUP LTD And Its Subsidiaries ANNUAL REPORT 2009 91
Notes to the Financial StatementsFor the financial year ended 30 June 2009 (Continued)
28. SEGMENT REPORTING
(a) Geographical segments
The Group is organised on a worldwide basis into four main geographical segments, namely:-
- Australia
- People’s Republic of China (PRC)
- Singapore/Malaysia/Hong Kong/Korea
- United States of America (USA)
2009
Revenue
Results
Interest incomeInterest expense
Income tax
Net loss for the financial year
Segment assets
Unallocated assets
Total assets
Segment liabilities
Unallocated liabilities
Total liabilities
Capital expenditure
Depreciation and
amortisation
Singapore/
Malaysia/
Hong Kong/
Korea
$
34,448,747
(1,437,545)
58,132,578
50,350,154
372,125
1,223,310
USA
$
7,938,552
(641,794)
2,077,775
13,850,182
9,547
76,815
Eliminations
$
(300,925)
-
(83,846,136)
(69,160,019)
-
-
Total
$
81,639,280
(3,485,053)
74,622(315,287)
734,185
(2,991,533)
67,203,482
2,430,334
69,633,816
20,284,267
3,316,360
23,600,627
2,479,545
3,024,945
Australia
$
5,298,467
(2,297,663)
4,808,779
8,551,771
150,293
120,437
PRC
$
34,254,439
891,949
86,030,486
16,692,179
1,947,581
1,604,383
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92 AUSSINO GROUP LTD And Its Subsidiaries ANNUAL REPORT 2009
Notes to the Financial StatementsFor the financial year ended 30 June 2009 (Continued)
28. SEGMENT REPORTING (Continued)
(a) Geographical segments (Continued)
2008
Revenue
Results
Interest income
Interest expense
Income tax
Net profit for the financial year
Segment assets
Unallocated assets
Total assets
Segment liabilitiesUnallocated liabilities
Total liabilities
Capital expenditure
Depreciation and
amortisation
Singapore/
Malaysia/
Hong Kong/
Korea
$
37,225,524
(2,834,565)
59,835,658
45,117,745
1,739,515
1,362,161
USA
$
8,833,967
(1,210,593)
2,519,806
12,790,635
3,937
87,028
Eliminations
$
(469,094)
-
(77,333,290)
(59,577,313)
-
-
Total
$
94,949,797
2,132,515
426,222
(442,408)
(112,964)
2,003,365
71,186,846
2,706,875
73,893,721
19,808,8825,109,974
24,918,856
3,994,469
3,279,851
Australia
$
16,248,744
473,553
9,458,213
9,111,115
258,850
147,467
PRC
$
33,110,626
5,704,120
76,706,459
12,366,700
1,992,167
1,683,195
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AUSSINO GROUP LTD And Its Subsidiaries ANNUAL REPORT 2009 93
Notes to the Financial StatementsFor the financial year ended 30 June 2009 (Continued)
28. SEGMENT REPORTING (Continued)
29. COMPARATIVES
b) Business Segments
Revenue, assets and additions to property, plant and equipment are based on the two main operating
divisions regardless of where the goods are produced.
Ladies’ Apparels
Home Fashion
(a) Prior year adjustments
Prior year adjustments relate to the following:
Adjustment to revenue relates to adjustment in respect of bill and hold sales arrangements to be in linewith Group’s revenues recognition policy.
2008
$
838,475
3,155,994
3,994,469
2009
$
444,303
2,035,243
2,479,546
2008
$
10,811,901
63,081,820
73,893,721
2009
$
9,813,510
59,820,306
69,633,816
2008
$
12,108,475
82,841,322
94,949,797
2009
$
8,865,472
72,773,808
81,639,280
Turnover Assets Capital Expenditure
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94 AUSSINO GROUP LTD And Its Subsidiaries ANNUAL REPORT 2009
Notes to the Financial StatementsFor the financial year ended 30 June 2009 (Continued)
29. COMPARATIVES (Continued)
(a) Prior year adjustments (Continued)
The impact of the prior year adjustments on the various accounting captions of the Company are as follows:
Balance Sheet
Inventories
Trade and other receivables
Income Statement
Revenue
Cost of sales
Retained profit, brought forward
Retained profit, carried forward
Statement of cash flow
Profit before tax
Cash flows from operating activities
Inventories
Trade and other receivables
Net effect of exchange rate in consolidating subsidiaries
30 June 2008
balances as
previously reported
20,983,370
20,868,617
95,140,150
(52,933,009)
42,383,570
41,046,493
2,038,697
(2,854,313)
5,119,852
(3,842,773)
30 June 2008
balances as restated
22,955,224
17,612,756
94,949,797
(52,665,024)
40,918,265
39,658,820
2,116,329
(3,005,320)
5,089,562
(3,739,108)
Group
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(b) Prior year comparatives
Prior year comparatives have been audited by another firm of certified public accountants, PKF-CAP LLP.
The following comparative figures have been reclassified to conform with the current year’s presentation.
Income Statement
Selling and distribution expenses
Administrative expenses
Other expenses
Finance costs
30 June 2008
balances as
previously reported
(5,804,106)
(15,134,479)
(22,249,056)
(441,284)
30 June 2008
balances as restated
(23,287,344)
(19,345,149)
(554,024)
(442,408)
Group
AUSSINO GROUP LTD And Its Subsidiaries ANNUAL REPORT 2009 95
Notes to the Financial StatementsFor the financial year ended 30 June 2009 (Continued)
29. COMPARATIVES (Continued)
30. EVENT AFTER BALANCE SHEET DATE
31. ECONOMIC UNCERTAINTY
On 28 August 2009, Suhan International Trade Co., Ltd, a wholly owned subsidiary of the Company,
acquired 100% equity interest of First Prosper International Limited ("First Prosper"), a company
registered in British Virgin Islands with a consideration of USD100 (SGD144). First Prosper has a wholly
owned subsidiary, namely Relax Fashions International Corporation Pty Ltd ("Relax Fashions"). Relax
Fashions, a company registered in Australia, is in the business of wholesale and distribution of lifestyle
home fashions products.
Current global economic slowdown has affected and may continue to affect the Group’s operations,
financial conditions and cash flows. The ability to continue to achieve profitability and generate positiveoperating cash flows in the foreseeable future are dependent on the recovery of the global as well as the
domestic economies which are currently uncertain. The ultimate outcome of this matter cannot be
presently determined. The financial statements do not include any adjustments that might result from
such uncertainties. Related effects will be reported in the financial statements as and when they become
known and can be reasonably estimated.
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96 AUSSINO GROUP LTD And Its Subsidiaries ANNUAL REPORT 2009
Additional Information
Properties of the GroupThe properties of the Group as at 30 June 2009 are as follows:-
Country Location Existing Use Leasehold or Freehold
Australia 57-59 Wittenberg Drive Office cum Freehold
Canning Vale warehouse Western Australia
PRC Unit 05, 5th Level Leased out Leasehold Kuen Yang International Business Plaza No. 798 Zhao Jia Bang Road Xuhui District Shanghai People’s Republic of China
PRC Unit 09, 6th Level Office Leasehold
Office Tower 3 Beijing Henderson Centre 18 Jianguomennei Avenue Dongcheng District Beijing People’s Republic of China
PRC 368 Chun Zhong Road Office cum Leasehold Aussino Building warehouse Shanghai People’s Republic of China
PRC Unit 1020,10th Level Staff apartment Leasehold Beijing Henderson Centre 18 Jianguomennei Avenue Dongcheng District Beijing People’s Republic of China
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AUSSINO GROUP LTD And Its Subsidiaries ANNUAL REPORT 2009 97
Shareholding StatisticsAs at 26 October 2009
Class of shares: Ordinary shares
Voting rights: One vote per share
ANALYSIS OF SHAREHOLDERS BY SIZE OF SHAREHOLDINGS
Name of Shareholder
1 Foreswood Industrial Corporation
2 DB Nominees (S) Pte Ltd
3 Kim Eng Securities Pte. Ltd.
4 DBS Nominees Pte Ltd
5 Phillip Securities Pte Ltd6 OCBC Securities Private Ltd
7 United Overseas Bank Nominees Pte Ltd
8 Lim & Tan Securities Pte Ltd
9 Lim Mee Hwa
10 Citibank Nominees Singapore Pte Ltd
11 Lam Lai Cheng
12 Ramesh S/O Pritamdas Chandiramani
13 Yeo Seng Chong
14 CIMB-GK Securities Pte. Ltd.
15 Yang Khee Sing
16 Raffles Nominees (Pte) Ltd
17 Morgan Stanley Asia (Singapore) Securities Pte Ltd18 DBS Vickers Securities (Singapore) Pte Ltd
19 Chow Lai Kuen
20 Michael Vincent Ko Pozon
TOTAL
%
69.01
4.67
2.41
2.31
2.131.03
0.91
0.63
0.62
0.58
0.42
0.42
0.36
0.36
0.35
0.33
0.260.25
0.25
0.25
87.55
No. of Shares
165,624,500
11,201,000
5,788,150
5,535,750
5,111,2502,461,240
2,176,750
1,507,000
1,494,500
1,387,000
1,000,000
1,000,000
870,000
857,752
829,000
792,000
632,000600,750
600,000
600,000
210,068,642
Size of shareholdings
Total
1
1,000
10,001
-
-
-
999
10,000
1,000,000
No. Of
Shareholders
1,369
98
802
459
10
%
100.00
7.16
58.58
33.53
0.73
100.00
%
0.02
1.63
14.06
84.29
No. Of
Shares
240,000,000
40,298
3,922,074
33,750,488
202,287,140
TWENTY LARGEST SHAREHOLDERS AS AT 26 OCTOBER 2009
1,000,001 and above
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Shareholding StatisticsAs at 26 October 2009
Substantial Shareholders
Name
Foreswood Industrial
Corporation (1)
Anthony Lim
Yeoman Capital
Management Pte Ltd
Yeo Seng Chong
Note:
1.
2.
3.
Compliance with Rule 723 of the SGX-ST Listing Manual
Based on information available and to the best knowledge of the Company as at 26 October 2009,
approximately 22.05% of the Company’s ordinary shares listed on the SGX-ST are held by public. The
Company is therefore in compliance with Rule 723 of the SGX-ST Listing Manual.
No. of shares
registered in
the name
of substantial
shareholder
or nominee
165,624,500
4,383,000
-
870,000
No. of shares
in which
substantial
shareholders are
deemed to be
interested
-
165,624,500 (2)
13,881,000
15,600,500 (3)
Total
165,624,500
170,007,500
13,881,000
16,470,500
Percentage
of issued
shares
69.01
70.84
5.78
6.86
98 AUSSINO GROUP LTD And Its Subsidiaries ANNUAL REPORT 2009
Due to restructuring, Foreswood Industrial Corporation is wholly owned by Alpha Omega Inc from 13 March2009. Alpha Omega Inc is an investment holding company incorporated in Samoa, and is wholly owned by
Mirare Trust, a trust settlement executed by Mr Anthony Lim.
This represents Mr Anthony Lim’s deemed interest of 165,624,500 shares held by Foreswood Industrial
Corporation through Alpha Omega Inc.
This represents Mr Yeo Seng Chong’s deemed interest of 15,600,500 shares held in the name of the
following:-
(a) 13,881,000 shares held by Yeoman Capital Management Pte Ltd
(b) 1,719,500 shares held by Lim Mee Hwa (Spouse)
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AUSSINO GROUP LTD And Its Subsidiaries ANNUAL REPORT 2009 99
NOTICE IS HEREBY GIVEN that the Eighteenth Annual General Meeting of Aussino Group Ltd (the “Company”)
will be held at 1 Scotts Road #24-05/07, Shaw Centre, Singapore 228208 on Monday, 30 November 2009 at 3.00 p.m.for the following purposes:-
AS ORDINARY BUSINESS
1.
2.
3.
4.
5.
AS SPECIAL BUSINESS
To consider and if thought fit, to pass the following resolutions as Ordinary Resolutions, with or without any
modifications:
6. Authority to allot and issue shares
Notice of Eighteenth Annual General Meeting
(Resolution 1)
(Resolution 2)
(Resolution 3)
(Resolution 4)
“That pursuant to Section 161 of the Companies Act, Chapter 50 and the Listing Rules of the Singapore
Exchange Securities Trading Limited (“SGX-ST”), authority be and is hereby given to the directors to:-
(a) (i)
(ii)
(b)
issue shares in the capital of the Company (“shares”) whether by way of rights, bonus or otherwise,
and /or
make or grant offers, agreements or options (collectively “Instruments”) that might or would require
shares to be issued, including but not limited to the creation and issue of (as well as adjustments to)
warrants, debentures or other instruments convertible into shares,
(notwithstanding the authority conferred by this Resolution may have ceased to be in force) issue shares
in pursuance of any Instrument made or granted by the Directors while this Resolution was in force,
at any time and upon such terms and conditions and for such purposes and to such persons as the
Directors may in their absolute discretion deem fit; and
To receive and adopt the Audited Financial Statements for the financial year ended 30 June 2009 and the
Directors’ Report and Auditors’ Report thereon.
To re-elect Ms. Helen Chow (retiring pursuant to Article 91), Director retiring in accordance with the
Company’s Articles of Association.
To approve payment of Directors’ Fees of S$59,000 for the year ended 30 June 2009 [2008: S$86,000].
To appoint Messrs BDO Raffles as the Company's Auditors in place of the retiring Auditors, Messrs Horwath First
Trust LLP and to authorise the Directors to fix their remuneration. [See Explanatory Note (a)]
To transact any other routine business which may arise.
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100 AUSSINO GROUP LTD And Its Subsidiaries ANNUAL REPORT 2009
Notice of Eighteenth Annual General Meeting(Continued)
Provided that:
(a)
(b)
(c)
(d)
(e)
(Resolution 5)
the aggregate number of shares to be issued pursuant to this Resolution (including shares to be issued
pursuance of Instruments made or granted pursuant to this Resolution):
(i)
(ii)
(i)
(ii)
(iii)
the Renounceable Rights Issues and Other Share Issues shall not, in aggregate, exceed one hundred per
centum (100%) of the total number of issued shares in the capital of the Company excluding treasury shares
(as calculated in accordance with paragraph (c) below);
(subject to such 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 sub-paragraph (a) above, the total number of
issued shares (excluding treasury shares) shall be based on the total number of issued shares (excludingtreasury shares) of the Company at the time this Resolution is passed, after adjusting for:-
in exercising the authority conferred by this Resolution, the Company shall comply with the provisions of the
Listing Manual of the SGX-ST for the time being in force (unless such compliance has been waived by the
SGX-ST) and the Articles of Association for the time being of the Company; and
(unless revoked or varied by the Company in general meeting) the authority conferred by this Resolution shall
continue in force (i) until the conclusion of the next Annual General Meeting of the Company or the date by
which the next Annual General Meeting of the Company is required by law to be held, whichever is the earlier;
or (ii) in the case of shares to be issued in pursuance of the Instruments, made or granted pursuant to this
Resolution, until the issuance of such shares in accordance with the terms of the Instruments.”
by way of renounceable rights issues on a pro rata basis to shareholders of the Company
("Renounceable Rights Issues") shall not exceed one hundred per centum (100%) of the total
number of issued shares in the capital of the Company excluding treasury shares (as calculated in
accordance with sub-paragraph (c) below); and
new shares arising from the conversion or exercise of any convertible securities;
new shares arising from exercising share options or vesting of share awards outstanding or subsisting at
the time this Resolution is passed, provided the options or awards were granted in compliance with the
provisions of the Listing Manual of the SGX-ST; and
any subsequent bonus issue, consolidation or subdivision of shares;
otherwise than by way of Renounceable Rights Issues ("Other Share Issues") shall not exceed fifty per
centum (50%) of the total number of issued shares (excluding treasury shares) of the Company (as
calculated in accordance with sub-paragraph (c) below), of which the aggregate number of shares to be
issued other than on a pro rata basis to shareholders of the Company (including shares to be issued
pursuance of Instruments made or granted pursuant to this Resolution) does not exceed twenty per
centum (20%) of the total number of issued shares (excluding treasury shares) of the Company (as
calculated in accordance with sub-paragraph (c) below);
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AUSSINO GROUP LTD And Its Subsidiaries ANNUAL REPORT 2009 101
7. Placement of Shares under the Share Issue Mandate at more than 10% Discount
By Order of the Board
Helen ChowCompany Secretary
Singapore, 13 November 2009
Explanatory Notes
(a)
(Resolution 6)
THAT notwithstanding Rule 811 of the Listing Manual, the Directors of the Company be and are hereby
authorised to issue shares and/or Instruments other than on a pro-rate basis pursuant to the aforesaid
general mandate at a discount not exceeding twenty percent (20%) to the weighted average price for trades
done on the SGX-ST for the full market day on which the placement or subscription agreement in relation to
such shares and/or Instruments is executed, provided that:-
(a)
(b)
in exercising the authority conferred by this Resolution, the Company shall comply with the provisions of
the Listing Manual of the SGX-ST for the time being in force (unless such compliance has been waived by
the SGX-ST) and the Articles of Association for the time being of the Company; and
(unless revoked or varied by the Company in General Meeting) the authority conferred by this Resolution
shall continue in force until the conclusion of the next Annual General Meeting of the Company or the date
by which the next Annual General Meeting of the Company is required by law to be held, whichever is
earlier.
Notice of Eighteenth Annual General Meeting(Continued)
Detailed information relating to this Resolution is set out in the Circular dated 13 November 2009 to
Shareholders.
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102 AUSSINO GROUP LTD And Its Subsidiaries ANNUAL REPORT 2009
Notice of Eighteenth Annual General Meeting(Continued)
Statement Pursuant to Article 54 of the Company’s Articles of Association
The effect of the resolutions under the heading “Special Business” in this Notice of the Annual General
Meeting are:-
(i)
(ii)
1.
2.
3.
4.
The Ordinary Resolution 5 proposed in item 6 above, if passed, will empower the Directors from the
date of this Meeting until the date of the next Annual General Meeting, or the date by which the next
Annual General Meeting is required by law to be held or when varied or revoked by the Company in
general meeting, whichever is the earlier, to issue shares in the capital of the Company and to make
or grant instruments (such as warrants or debentures) convertible into shares, and to issue shares in
pursuance of such instruments, up to a number not exceeding (i) 100% for Renounceable Rights
Issues and (ii) 50% for Other Share Issues, of which up to 20% may be issued other than on a pro
rata basis to shareholders, provided that the total number of shares which may be issued pursuant to
(i) and (ii) shall not exceed 100% of the issued shares in the capital of the Company excluding
treasury shares. The aggregate number of shares which may be issued shall be based on the total
number of issued shares in the capital of the Company (excluding treasury shares) at the time that
Ordinary Resolution 5 is passed, after adjusting for (a) new shares arising from the conversion or
exercise of any convertible securities or share options or vesting of share awards which are
outstanding or subsisting at the time that Ordinary Resolution 5 is passed, and (b) any subsequent
bonus issue or consolidation or subdivision of shares.
The authority for 100% Renounceable Rights Issues is proposed pursuant to the SGX news release of
19 February 2009 which introduced further measures to accelerate and facilitate listed issuers' fund
raising efforts ("SGX News Release").
Resolution 6 is to authorize the Directors to issue new shares to subscribers or placees at a discount
of not more than 20% to the weighted average price for trades done on the SGX-ST for the full
market day on which the placement or subscription agreement is signed.
The maximum pricing discount of 20% is proposed pursuant to the SGX-ST’s news release of 19
February 2009 which introduce further measures to accelerate and facilitate the fund raising efforts
of listed issuers.
Notes:
A member of the Company entitled to attend and vote at a 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.
If the appointer is a corporation, the proxy must be executed under seal or the hand of its duly
authorised officer or attorney.
The instrument appointing a proxy must be deposited at the registered office of the Company at 1
Scotts Road, #24-05/07, Shaw Centre, Singapore 228208 not less than 48 hours before the time
appointed for the Meeting.
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AUSSINO GROUP LTD And Its Subsidiaries ANNUAL REPORT 2009 103
Proxy FormAnnual General Meeting
AUSSINO GROUP LTD(Registration No. 199100323H)
(Incorporate in the Republic of Singapore)
IMPORTANT.
1.
2.
3.
For investors who have used their CPF monies to buy Aussino Group Ltd shares, thisAnnual Report 2009 is forwarded to them at the request of their CPF ApprovedNominees and is sent solely FOR INFORMATION ONLY.
This proxy Form is not valid for use by CPF investors and shall be ineffective for allintents and purposes if used or purported to be used by them.
CPF Investors who wish to vote should contact their CPF Approved Nominees.
Name
No. For AgainstResolutions relating to:
Ordinary Business
1.
2.
3.
4.
5.
6.
Address NRIC/Passport No.
Proportion of shareholdings (%)
Name Address NRIC/Passport No.
Proportion of shareholdings (%)
I/We
of
being a member/members of AUSSINO GROUP LTD, hereby appoint:
and/or (delete as appropriate)
or failing whom, the Chairman of the Meeting, as my/our proxy/proxies to vote for me/us on my/ourbehalf and if necessary to demand a poll at the Eighteenth Annual General Meeting of the Company tobe held at 1 Scotts Road #24-05/07, Shaw Centre, Singapore 228208 on Monday, 30 November 2009 at3.00 p.m. and at any adjournment thereof in the manner indicated below:
(Please indicate with a tick (√) in the spaces provided whether you wish your vote to be cast for oragainst the resolutions as set out in the Notice of the Meeting. In the absence of specific directions,your proxy may vote or abstain as he/she thinks fit.)
Dated this day of 2009
Signature (s) of Member(s) or Common Seal
To receive and adopt the Audited Financial Statements for thefinancial year ended 30 June 2009 and the Reports of the Directorsand Auditors thereon.
To re-elect Ms Helen Chow as a Director (Retiring pursuant to Article 91).
To approve Directors’ Fees of S$59,000 for the year ended 30 June2009 (2008: S$86,000).
To appoint Messrs BDO Raffles as the Company's Auditors in place ofthe retiring Auditors, Messrs Horwath First Trust LLP as Auditors andto authorise the Directors to fix their remuneration.
Special Business
To authorise the Directors to allot and issue shares pursuant toSection 161 of the Companies Act, Chapter 50 and the Listing Manualof the SGX-ST.
To approve placement of Shares under the Share Issue Mandate atmore than 10% Discount.
(Resolution 1)
(Resolution 2)
(Resolution 3)
(Resolution 4)
(Resolution 5)
(Resolution 6)
Total number of Shares Held
IMPORTANTPLEASE READ NOTES OVERLEAF
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104 AUSSINO GROUP LTD And Its Subsidiaries ANNUAL REPORT 2009
Proxy FormAnnual General Meeting (Continued)
NOTES:
1.
2.
3.
4.
5.
6.
General:
The Company shall be entitled to reject the instrument appointing a proxy or proxies if it is incomplete,
improperly completed or illegible or where the true intentions of the appointor are not ascertainable from
the instructions of the appointor specified in the instrument appointing a proxy or proxies. In addition, in
the case of Shares entered in the Depository Register, the Company may reject any instrument
appointing a proxy or proxies lodged if the member, being the appointor, is not shown to have Shares
entered against his name in the Depository Register as at 48 hours before the time appointed for holding
the Annual General Meeting, as certified by The Central Depository (Pte) Limited to the Company.
Please insert the total number of Shares held by you. If you have Shares entered against your name
in the Depository Register (as defined in Section 130A of the Singapore Companies Act, Chapter 50
of Singapore), you should insert that number of Shares. If you have Shares registered in your name
in the Register of Members, you should insert that number of Shares. If you have Shares entered
against your name in the Depository Register and Shares registered in your name in the Register of
Members, you should insert the aggregate number of Shares entered against your name in the
Depository Register and registered in your name in the Register of Members. If no number is
inserted, this instrument appointing a proxy or proxies shall be deemed to relate to all the Shares
held by you.
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 instead of him. A proxy need not be a member of the
Company.
Where a member appoints more than one proxy, the appointment shall be invalid unless he/she
specifies the proportion of his shareholding (expressed as a percentage of the whole) to be
represented by each proxy.
The instrument appointing a proxy or proxies must be deposited at the Registered Office of the
Company at 1 Scotts Road #24-05/07, Shaw Centre, Singapore 228208, not less than 48 hours
before the time appointed for the Annual General Meeting.
The instrument appointing a proxy or proxies must be under the hand of the appointor or hisattorney duly authorised in writing. Where the instrument appointing a proxy or proxies is executed
by a corporation, it must be executed either under its seal or under the hand of an officer or attorney
duly authorised. Where the instrument appointing a proxy or proxies is executed by an attorney on
behalf of the appointor, the letter or power of attorney or a duly certified copy thereof must be lodged
with the instrument.
A corporation which is a member may authorise by resolution of its directors or other governing body
such person as it thinks fit to act as its representative at the Annual General Meeting, in accordance
with Section 179 of the Singapore Companies Act, Chapter 50 of Singapore.
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