Haw Par Annual Report 2010

Haw Par Corporation Limited annual report 2010
CORE OPERATIONS Healthcare: Haw Par Healthcare Limited Tiger Balm (Malaysia) Sdn. Bhd. Xiamen Tiger Medicals Co., Ltd Haw Par Healthcare (Xiamen) Co., Ltd Haw Par (India) Private Limited Haw Par Tiger Balm (Thailand) Limited Haw Par Tiger Balm (Philippines), Inc. Tiger Medicals (Taiwan) Limited PT. Haw Par Healthcare Leisure: Haw Par Leisure Pte Ltd Underwater World Singapore Pte Ltd Underwater World Pattaya Ltd Chengdu Haw Par Oceanarium Co., Ltd
PROPERTY & INVESTMENTS Property: Haw Par Properties (Singapore) Private Limited Haw Par Centre Private Ltd Setron Limited Haw Par Land (Malaysia) Sdn. Bhd. Investments: Haw Par Investment Holdings Private Limited Straits Maritime Leasing Private Limited Pickwick Securities Private Limited Haw Par Equities Pte Ltd Haw Par Trading Pte Ltd M & G Maritime Services Pte Ltd Haw Par Capital Pte Ltd Haw Par Securities (Private) Limited Haw Par Hong Kong Limited Haw Par Brothers International (H.K.) Limited Tiger Balm (Hong Kong) Limited Haw Par Pharmaceutical Holdings Pte Ltd Associated Companies: Hua Han Bio-Pharmaceutical Holdings Limited (17.14%) UIC Technologies Pte Ltd (40%)
CONTENTS 1 2 6 11 12 14 16 18 26 29 Corporate Prole Chairmans Statement Board of Directors Corporate Information Key & Senior Executives Group Financial Highlights Five-Year Financial Summary Operations Review People & The Community Financial Review 34 35 44 114 115 117 119 121 123 127 Share Price & Trading Volume Corporate Governance Report Statutory Reports & Financial Statements Financial Calendar Group Ofces Management Listing Major Products & Services Statistics of Shareholdings Notice of Annual General Meeting Proxy Form
CORPORATE PROFILE
Focus. Resilience. Sustainability.

Haw Par Corporation Limited has been listed on The Singapore Exchange since 1969. Headquartered in Singapore, the Groups core healthcare and leisure businesses promote healthy lifestyles through its healthcare products and oceanariums. Haw Pars healthcare products are manufactured and marketed under its various established brands such as Tiger Balm and Kwan Loong. Its renowned ointment Tiger Balm and product extensions such as Tiger Balm Medicated Plaster, Tiger Balm Joint Rub, Tiger Balm Neck and Shoulder Rub, Tiger Balm Neck and Shoulder Rub Boost and Tiger Balm Mosquito Repellent Patch are used worldwide to invigorate the body as well as to relieve aches and pains. The Group owns and operates three oceanariums, namely the Underwater World Singapore at Sentosa, Underwater World Pattaya in Thailand and Chengdu Haw Par Oceanarium in China. The Group also has interests in investment properties and manages its own portfolio of investments in securities. The Groups primary corporate strategy is to expand its core healthcare and leisure businesses through product extensions under its own established brands, form strategic alliances with partners in various key markets and explore acquisition of compatible businesses. It also aims to manage efciently its portfolio of investments in properties and securities to achieve a reasonable return.
Annual Report 2010
Haw Par Corporation Limited
CHAIRMANS STATEMENT
The Group will continue to pursue revenue growth for its healthcare business, by introducing more products that will appeal to a larger group of consumers and more intensive marketing. The Leisure Division will continue to launch new exhibits and activities to increase visitorship in our three oceanariums.
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The Groups performance in 2010 was fuelled by a strong economic recovery in Singapore and the region. The Groups earnings increased by 97% to $112.8 million for 2010 (2009: $57.2 million). This was largely attributable to the rebound of investment properties capital value, higher earnings of associated companies and higher investment income. Our Healthcare Division benetted from improved consumer condence in major markets. Sales increased by 7% to $79.1 million and prot rose by 4% to $16.2 million in 2010. Despite a swift recovery of the tourism industry, performance of the Leisure Division was hindered by heightened competition and higher operating expenses.
As a consequence, there was a 7% decline in prots to $12.6 million. The Property Division also experienced an 11% drop in prots to $12.3 million because new rental rates were below the rates achieved at the peak of 2008. The Groups associated company, Hua Han BioPharmaceuticals Holdings Limited, continued to do well. During the year under review, one of its subsidiaries was listed in Hong Kong. The Groups share of profits from Hua Han, together with a dilution gain, amounted to $ 23.5 million, an increase of 210% from 2009.
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CHAIRMANS STATEMENT
DIVIDEND The Board recommends a second and final tax exempt (one-tier) dividend of 14 cents per share. Together with the interim dividend of 6 cents paid last September, the total dividend per share for financial year ended 31 December 2010 would amount to 20 cents per share, the same rate as 2009. HIGHLIGHTS OF OPERATIONS To strengthen the global presence of Tiger Balm, the Healthcare Division focused on expanding the line of product offerings in key markets thereby broadening its consumer base. Tiger Balm Neck & Shoulder Rub, for example, succeeded in entering several major chains of drugstores in the United States. Focused advertising and promotional efforts augmented the broad-based growth momentum across major markets. Underwater World Singapore, equipped with a new interactive Dolphin Lagoon, continued to actively engage in marketing and public relation efforts to attract increasing number of visitors to Sentosa. Underwater World Pattaya also increased its efforts to expand foreign and local visitorship. The newly opened oceanarium in Chengdu, Sichuan faced challenges to breakeven. 2011 BUSINESS OUTLOOK AND STRATEGY Singapores economic growth is expected to moderate in 2011 after the economys strong rebound in 2010. Coupled with increasing competition and rising costs, the business environment will be challenging.
In response to these challenges, the Group will continue to pursue revenue growth for its healthcare business, by introducing more products that will appeal to a larger group of consumers and by conducting more intensive marketing. The Leisure Division will continue to launch new exhibits and activities to increase visitorship at Underwater World Singapore, Underwater World Pattaya and the Chengdu Haw Par Oceanarium. With a strong balance sheet, the Group will continue to look for new investment opportunities while maintaining steady progress in our core businesses. ACKNOWLEDGEMENT On behalf of the Board, I would like to thank management and staff for their hard work and dedication, and our shareholders and business associates for their continuing support. I would also like to record my deepest appreciation to my fellow Board members for their wise counsel and guidance. On behalf of the Board, I would also like to record our deep appreciation to Director, Dr Lim Kee Ming, who has decided not to offer himself for re-appointment at this years annual general meeting. Dr Lim has provided invaluable advice since his appointment to the Board in 1997.
Wee Cho Yaw Chairman
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BOARD OF DIRECTORS
WEE CHO YAW Non-Executive Chairman Dr Wee Cho Yaw, aged 82, is a career banker with more than 50 years experience. He has been Chairman of the Company and of the Haw Par Group (Group) since 1978. He was appointed to the Board on 31 October 1975 and was last re-appointed on 20 April 2010. He is a member of the Remuneration and Nominating Committees. Dr Wee is Chairman of the United Overseas Bank Limited Group , United Overseas Insurance Limited, United International Securities Limited, UOL Group Limited, Pan Pacic Hotels Group Limited, United Industrial Corporation Limited and Marina Centre Holdings Private Limited. He is also Chairman of Wee Foundation.
Annual Report 2010
WEE EE LIM President & CEO Mr Wee Ee Lim, aged 49, joined the Group in 1986 and became President & CEO of Haw Par Corporation Limited in 2003. He was appointed to the Board on 23 March 1994 and was last re-elected on 23 April 2008. Mr Wee is a member of the Investment Committee. He has been closely involved in the management and growth of the Group over the last 24 years. He is a Director of Singapore Land Limited, United Industrial Corporation Limited, UOL Group Limited, Pan Pacic Hotels Group Limited, Hua Han BioPharmaceutical Holdings Limited (a company listed on the Hong Kong Stock Exchange) and Wee Foundation. He was previously a board member of Sentosa Development Corporation. He holds a Bachelor of Arts (Economics) degree from Clark University, USA.
He is Honorary President of the Singapore Federation of Chinese Clan Associations, Singapore Hokkien Huay Kuan and Singapore Chinese Chamber of Commerce & Industry. Dr Wee is also Pro-Chancellor of Nanyang Technological University. He received Chinese high school education and was conferred Honorary Doctor of Letters by National University of Singapore in 2008. Dr Wee was conferred the Businessman Of The Year award twice at the Singapore Business Awards in 2001 and 1990. In 2006, he received the inaugural Credit Suisse-Ernst & Young Lifetime Achievement Award for his outstanding achievements in the Singapore business community. In 2009, he was conferred the Lifetime Achievement Award by The Asian Banker.
BOARD OF DIRECTORS
SAT PAL KHATTAR Independent Director Mr Sat Pal Khattar, aged 68, was a founding partner and later consultant in Messrs KhattarWong with over 40 years experience in the legal profession. He was appointed to the Board on 1 January 1977 and was last re-elected on 23 April 2008. He is Chairman of the Remuneration and Nominating Committees. He is the Chairman and Director of Khattar Holdings Pte Ltd Group of Companies which is principally engaged in investments. Mr Khattar is the Chairman of GuocoLand Limited and a Director of Guoco Group Limited and GuocoLeisure Limited. He is also Chairman of the Board of Trustees of the Singapore Business Federation and a Director of the Institute of South Asian Studies. He holds a LLM degree and LLB (Hons) degree from the University of Singapore. He was presented the SICCI-DBS Singapore-India Business Award in 2009.
REGGIE THEIN Independent Director Mr Reggie Thein, aged 70, is an accountant with over 40 years experience in the profession. He was appointed to the Board on 8 July 2003 and was last re-elected on 20 April 2010. He is the Chairman of the Audit Committee. He is a Director of United Overseas Bank Limited, GuocoLand Limited, GuocoLeisure Limited, FJ Benjamin Holdings Limited, MobileOne Limited, Keppel Telecommunications and Transportation Limited and Otto Marine Limited. He was a former director of Grand Banks Yachts Limited till 2009 and MFS Technology Ltd till January 2011.
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He is also a member of the governing council of the Singapore Institute of Directors. He is a Fellow of the Institute of Chartered Accountants in England and Wales and a member of the Institute of Certied Public Accountants of Singapore.
BOARD OF DIRECTORS
HWANG SOO JIN Independent Director Mr Hwang Soo Jin, aged 75, is a chartered insurer with more than 50 years of business experience. He was appointed to the Board on 28 October 1986 and was last re-elected on 20 April 2010. He is a member of the Audit and Remuneration Committees. Mr Hwang is the Chairman Emeritus, Director and Senior Advisor of Singapore Reinsurance Corporation Ltd and a Director of Singapore Land Limited, United Industrial Corporation Limited and United Overseas Insurance Limited. He stepped down as a Director of the Hokkien Foundation in 2010. He was previously the Chairman of Singapore Reinsurance Corporation Ltd and a Director of Lee Kim Tah Holdings Limited among others. He is a chartered insurer of the Chartered Insurance Institute, UK, an advisor to the ASEAN Insurance Council, an Honorary Fellow of The Singapore Insurance Institute and a Justice of the Peace.
LEE SUAN YEW Independent Director Dr Lee Suan Yew, aged 77, is a medical practitioner with over 40 years experience. He was appointed to the Board on 18 December 1995 and was last re-appointed on 20 April 2010. He is a member of the Audit and Nominating Committees. Dr Lee is an independent Director of K1 Ventures Limited. After serving six years as a Trustee of the Board of SingHealth Foundation, he has stood down in 2010. He was appointed Justice of the Peace in 1998. Dr Lee was President of the Singapore Medical Council for 4 years (2000 2004) and was also Chairman of the Singapore National Medical Ethics Committee (2007 and 2008). For his numerous public services, he was awarded the Public Service Star in 1991 and Public Service Star (Bar) in 2002. He holds a M.B.B. Chir. degree from the University of Cambridge and MRCP and FRCP from the Royal College of Physicians, Glasgow.
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BOARD OF DIRECTORS
LIM KEE MING Independent Director Dr Lim Kee Ming, aged 84, is the Chairman of Lim Teck Lee Group of Companies. He was appointed to the Board on 5 December 1997 and was last re-appointed on 20 April 2010. Dr Lim is a Director of UOL Group Limited and Pan Pacic Hotels Group Limited and an advisor to Network China. He is Honorary President of Singapore Chinese Chamber of Commerce & Industry and President of Ngee Ann Kongsi. He holds a Masters of Science (International Trade & Finance) degree from Columbia University and a Bachelor of Science (Business Administration) degree from New York University. In 2009, he was conferred the degree of Doctor of the University of Adelaide honoris causa for his distinguished service to education and service to the community. Dr Lim has decided not to offer himself for re-appointment at this years annual general meeting.
WEE EE CHAO Non-Executive Director Mr Wee Ee Chao, aged 56, is the Chairman of UOBKay Hian Holdings Limited. He was appointed to the Board on 8 July 2003 and was last re-elected on 22 April 2009. Mr Wee is the Chairman and Managing Director of UOB-Kay Hian Holdings Limited Group and a Director of UOL Group Limited and Pan Pacic Hotels Group Limited. He is also a Director of Wee Foundation. He holds a Bachelor of Business Administration degree from The American University, Washington DC, USA.
Annual Report 2010
BOARD OF DIRECTORS
CHNG HWEE HONG Executive Director Mr Chng Hwee Hong, aged 61, joined the Group in 1990 and was appointed as Group General Manager in 1992. He was appointed to the Board on 23 March 1994 and was last re-elected on 22 April 2009. He was promoted as Chief Operating Ofcer in 1996 and was redesignated as Executive Director in April 2003. He is a member of the Investment Committee. Mr Chng was appointed as a Committee Member of the Singapore Sichuan Trade and Investment Committee in 2005 and a Board member of Singapore Corporation of Rehabilitative Enterprise (SCORE) in 2009.
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HAN AH KUAN Executive Director Mr Han Ah Kuan, aged 62, joined the Group in 1991 as the General Manager of Haw Par Healthcare Limited (HPH) and was appointed as a director of HPH in 1995. He was appointed to the Board on 28 January 2005 and was re-elected on 20 April 2010. He is a member of the Investment Committee. He holds a Bachelor of Business Administration (Hons) degree from the University of Singapore.
He holds a Bachelor of Science (Hons) degree in Applied Chemistry and a Diploma in Business Administration from the University of Singapore.
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CORPORATE INFORMATION
DIRECTORS Wee Cho Yaw Chairman (Non-Executive) Wee Ee Lim President & Chief Executive Ofcer Sat Pal Khattar Independent Director Reggie Thein Independent Director Hwang Soo Jin Independent Director Lee Suan Yew Independent Director Lim Kee Ming Independent Director Wee Ee Chao Non-Executive Director Chng Hwee Hong Executive Director Han Ah Kuan Executive Director AUDIT COMMITTEE Reggie Thein Chairman Hwang Soo Jin Lee Suan Yew INVESTMENT COMMITTEE Wee Cho Yaw Chairman Wee Ee Lim Chng Hwee Hong Han Ah Kuan
NOMINATING COMMITTEE Sat Pal Khattar Chairman Wee Cho Yaw Lee Suan Yew REMUNERATION COMMITTEE Sat Pal Khattar Chairman Wee Cho Yaw Hwang Soo Jin COMPANY SECRETARY Zann Lim Seok Bin AUDITOR PricewaterhouseCoopers LLP Yeoh Oon Jin (From 2009) Audit Partner-in-charge BANKERS United Overseas Bank Limited The Hong Kong & Shanghai Banking Corporation Limited REGISTRAR Boardroom Corporate & Advisory Services Pte Ltd 50 Rafes Place #32-01 Singapore Land Tower Singapore 048623 REGISTERED OFFICE 401 Commonwealth Drive #03-03 Haw Par Technocentre Singapore 149598 Tel : 6337 9102 Fax : 6336 9232 Website : www.hawpar.com Reg. No. : 196900437M INVESTOR RELATIONS Email: InvestorRelations@hawpar.com
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KEY & SENIOR EXECUTIVES
ZANN LIM Group Financial Controller & Group Company Secretary, Haw Par Corporation Limited Joined the Group in 2006 as Group Finance Manager. Promoted to present position in 2008. Holds a Master of Business Administration from INSEAD and Tsinghua University. A member of the Institute of Certied Public Accountants of Singapore.
GOH BEE LEONG Director & General Manager (Manufacturing), Haw Par Healthcare Limited Joined Haw Par Healthcare in 1977 as Quality Control Pharmacist. Promoted to present position in 2006. Holds a Bachelor of Science (Pharmacy) from the University of Singapore.
TEO THIN YIEN Group Internal Audit Manager, Haw Par Corporation Limited Joined the Group in 1979 as Group Internal Audit Manager. Fellow of CPA Australia.
JASMIN HONG Deputy General Manager (Marketing), Haw Par Healthcare Limited Joined Haw Par Healthcare in 2004 as Deputy General Manager (Marketing). Holds a Bachelor of Commerce degree from the University of Melbourne.
TARN SIEN HAO General Manager (Corporate Development and Property Division), Haw Par Corporation Limited Joined the Group in 2001 as Deputy General Manager (Corporate Development) and was promoted to the position of General Manager (Corporate Development) in 2005. Appointed to the present position in 2010. Holds a Master of Business Administration from the University of Dubuque.
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Annual Report 2010
KEY & SENIOR EXECUTIVES
KWEK MENG TIAM Regional General Manager, Underwater World Singapore Pte Ltd / Haw Par Leisure Pte Ltd Joined Underwater World Singapore in 1991 as Maintenance Superintendent. Promoted to Operations Director in 2002 and General Manager of Underwater World Singapore Pte Ltd in 2005. Promoted to current position in 2010. Holds a Bachelor of Arts in Business Studies, The Open University, UK. PETER CHEW Deputy General Manager, Underwater World Singapore Pte Ltd Joined Underwater World Singapore in 1994 as Front Ofce Executive. Seconded to PGF Golf Driving Range in 1998 as Range Manager. Returned to Underwater World Singapore as a Senior Marketing Executive in 2000. Promoted to Assistant Director (Sales & Marketing) in 2007 and to present position in 2010. Holds a General Certicate of Education Ordinary Level.
BERNARD WONG General Manager, Underwater World Pattaya Ltd Joined Underwater World Pattaya in 2008 as General Manager. Holds a Bachelor of Engineering degree from University of Tasmania.
JOHN NG General Manager, Chengdu Haw Par Oceanarium Co., Ltd Joined Chengdu Haw Par Oceanarium in 2009 as General Manager. Holds a Post graduate Diploma in International Marketing from Strathclyde University.
ANTHONY CHANG Curator, Underwater World Singapore Pte Ltd Joined Underwater World Singapore and appointed to his current position as Curator in October 2009. Holds a Master of Science Degree from Capella University.
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Annual Report 2010
GROUP FINANCIAL HIGHLIGHTS
2010 RESULTS ($000) Group turnover: 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter 30,098 34,503 31,670 33,490 129,761 Prot before taxation: 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter 8,978 49,722 31,665 33,398 123,763 Earnings for the year: 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter 7,284 47,611 29,920 27,692 112,507 STATEMENT OF FINANCIAL POSITION ($000) Shareholders funds Borrowings Debt/Equity (%) PER SHARE
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2009
% Increase/ (Decrease)
28,106 30,924 33,055 31,906 123,991
7.1 11.6 (4.2) 5.0 4.7
10,012 44,821 23,876 (20,500) 58,209
(10.3) 10.9 32.6 262.9 112.6
9,048 42,846 22,076 (16,934) 57,036
(19.5) 11.1 35.5 263.5 97.3
1,941,893
1,902,800
2.1
Earnings (cents) Dividend net (cents) Dividend cover (times) Net tangible assets per share ($) EMPLOYEES Number of employees (Full time and Permanent) Group turnover per employee ($000) Pre-tax prot# per employee ($000)
56.9 20.0 2.8 9.76
28.9 20.0 1.4 9.58
96.9 100.0 1.9
471 276 230
473 262 193
(0.4) 5.3 19.2
Exclude the fair value changes on investment properties
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GROUP FINANCIAL HIGHLIGHTS
TURNOVER (%)
2010 2009
Healthcare Leisure Property
60.9 27.0 12.1
Healthcare Leisure Property
59.8 26.5 13.7
PROFIT CONTRIBUTION (%)

2010 2009
Healthcare Leisure Property Investments
14.2 11.1 10.9 63.8
16.2 14.1 14.5 55.2
ASSETS EMPLOYED (%)

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2010
2009
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4.1 4.1 7.9 83.9
4.8 4.9 9.9 80.4
FIVE YEAR FINANCIAL SUMMARY
2010 RESULTS ($000) Group turnover Prot from operations Healthcare Leisure Property Investment Unallocated expenses
2009
2008
2007
2006
129,761 84,806 16,157 12,585 12,336 48,993 (5,265) 23,521 15,436 123,763 112,770 112,507
123,991 83,485 15,508 13,526 13,911 45,323 (4,783) 7,590 (32,866) 58,209 57,165 57,036
122,109 90,438 14,587 16,154 14,692 50,764 (5,759) 6,616 (15,640) 81,414 78,548 78,269
119,332 109,039 14,421 17,974 8,628 74,539 (6,523) 6,129 72,662 187,830 159,130 158,983
119,682 101,837 24,623 16,892 6,261 58,238 (4,177) 8,599 16,661 127,097 107,268 107,091
Associates contribution Fair Value gains/(losses) on investment properties Prot before taxation Prot after taxation Earnings for the year PER SHARE Earnings (cents) Dividend net (cents) Dividend cover (times) STATEMENT OF FINANCIAL POSITION ($000) Shareholders funds Non-controlling interests
56.9 20.0 2.8
28.9 20.0 1.4
39.6 20.0 2.0
77.8 25.0* 3.1
51.6 20.0 2.6
1,941,893 7,756 1,949,649 43,848 181,642 91,702 1,239,779 11,116 435,098 (53,536) 1,949,649
1,902,800 7,147 1,909,947 45,367 164,878 72,837 1,217,708 11,116 452,320 (54,279) 1,909,947
1,320,065 7,017 1,327,082 35,341 197,826 59,359 758,226 11,116 306,348 (41,134) 1,327,082
1,927,289 6,899 1,934,188 26,469 214,498 49,995 1,285,747 11,216 413,918 (67,655) 1,934,188
1,799,165 6,909 1,806,074 23,106 151,698 43,680 1,194,564 11,116 443,162 (61,252) 1,806,074
Property, plant and equipment Investment properties Associated companies Available-for-sale nancial assets Intangible assets Net current assets Long term liabilities
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STATISTICS Return on equity (%) Net tangible assets per share ($) Debt/Equity (%) Number of shareholders EMPLOYEES Number of employees (Full time and permanent) Group turnover per employee ($000) Pre-tax prot # per employee ($000) * #
5.8 9.76 21,454
3.0 9.58 21,903
5.9 6.63 21,955
8.2 9.71 21,770
5.9 8.61 22,574
471 276 230
473 262 193
422 289 230
381 313 302
399 300 277
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Include a 5 cents special dividend. Exclude the fair value changes on investment properties.
FIVE YEAR FINANCIAL SUMMARY
EARNINGS AND NET DIVIDEND Earnings ($ m) 250.0 Net Dividend per share (cents) 50.0 45.0 200.0 40.0 35.0 150.0 30.0 25.0 100.0 50.0 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 20.0 15.0 10.0 5.0 0
Earnings Net Dividend per share
NET TANGIBLE ASSETS (NTA) PER SHARE $ 15.00
10.00
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5.00
0
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
NTA per share
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Healthcare
The world economic environment remained challenging in 2010. While some of our markets saw slight economic recovery, there were others, such as the United States, where the rate of recovery was slow. Our business in the Middle Eastern countries recorded satisfactory growth. The management focused on winning and growing market shares by leveraging on the brand equity, launching line extensions and stepping up its advertising and promotion efforts in selective markets. In the United States, for example, the distribution for our newly launched Tiger Balm Neck & Shoulder Rub expanded nationwide with the addition of major chain stores to its distribution network, including Walgreens US largest drugstore chain. Our global website was revamped in line with our efforts for better communication with our consumers. In Singapore, we widened our Tiger Balm plaster range by launching the new Tiger Balm Ultra Thin Patch with the aim to give our consumers a wider choice in this very competitive category.
Annual Report 2010
2010 Health & You Exhibition at Suntec Singapore and the Standard Chartered Marathon Singapore's post-marathon muscle rub stations provided opportunities for consumers to ask, learn and experience Tiger Balm products.
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OPERATIONS REVIEW
Hundreds of people born in the Year of the Tiger joined Thailands Roaring Tiger 2010 where ve lucky participants won trips to Singapore - Home of Tiger Balm.
Our sponsorship of marathons and health fairs provided us with a marketing platform to broaden the awareness and consumer trials of Tiger Balm amongst sports enthusiasts and tness conscious consumers in a relevant and engaging way. We also supported this new introduction with effective print and bus advertising campaigns. Entering 2011, we are cognizant of the challenges ahead. Trading situations are expected to become more complex with changes in the retail and distribution arena due to the acquisitions and mergers taking place in the healthcare industry.
The regulatory climate in many markets is becoming more stringent imposing heavier demands that increase the costs and time to market products. Inationary pressure and rising raw materials costs are leading to increased operational costs in many countries. Amidst the challenges, we continue to position our company for the future as we take important strides to continue with our launching of line extensions in our markets and our work on a slate of new products that will address lifestyle needs of modern consumers, leveraging on the Tiger Balm equity.
Advertisements in US national magazines
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TIGER BALM WORLDWIDE DISTRIBUTION
AMERICA Bahamas Canada Jamaica Mexico Suriname Trinidad & Tobago USA
AFRICA
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Kenya Malawi Mauritius Seychelles
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EUROPE Andorra Austria Belgium Croatia Denmark Finland France Germany Gibraltar Greece Holland Hungary Ireland Latvia Liechtenstein Lithuania Luxembourg Malta Norway Poland Portugal Spain Sweden Switzerland United Kingdom
ASIA Brunei Cambodia China Hong Kong India Indonesia Japan Laos Macau Malaysia Myanmar Nepal Pakistan Philippines Singapore South Korea Sri Lanka Taiwan Thailand Vietnam
MIDDLE EAST Bahrain Egypt Israel Jordan Kuwait Oman Qatar Saudi Arabia UAE Yemen
AUSTRALASIA Australia New Zealand Papua New Guinea

Annual Report 2010
New Caledonia
Countries that have manufacturing facilities.
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Home of the Pink Dolphins: Underwater World Singapores new Dolphin Lagoon
Leisure
UNDERWATER WORLD SINGAPORE 2010 continued to be a challenging year for Underwater World Singapore (UWS). With the opening of Integrated Resorts in Singapore, competition among attractions heightened. Despite the competitive environment, UWS, aided by a new Dolphin Lagoon, proved to be resilient and recorded a modest year-on-year increase in visitorship over 2009. Through increasing advertising spent and stepping up public relations efforts, UWS succeeded in capturing and sustaining mindshare. To stay ahead of the curve, UWS continued its effort in redening the oceanarium experience by introducing new products that were responsive to the changing tourism landscape in Singapore. In conjunction with the local mid-year school holidays, UWS collaborated with the Singapores National Library Board (NLB) to offer the rst underwater story-telling session in Singapore. During the weekends, librarians took turns to dive into the Giant Arapaima Tank and to narrate marine-related stories underwater using a deepsea communication system from the United States and waterproof visuals from the storybooks.
Annual Report 2010
Children for Children 2010 at Underwater World Singapore: (Above from left) Haw Par Corporation Executive Director Chng Hwee Hong, CHIJ (Kellock) Principal Clara Lim-Tan, Arts House Board Chairman Jennie Chua, Business Times Editor Alvin Tay, Guestof-Honour Lui Tuck Yew (Singapores Minister for Information, Communications and the Arts) and ChildAid 2010 Organising Chairman Seow Choke Meng at the cheque presentation. Net proceeds were donated to ChildAid which supports The Business Times Budding Artists Fund and The Straits Times School Pocket Money Fund.
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UWS marked the ofcial opening of the new Dolphin Lagoon in July 2010 with a surprise introduction of the second pink dolphin calf born in UWS named Speedy. Speedy was the second documented birth of this species of dolphin at any marine park in the world following the worlds rst documented birth of the dolphin calf, Splash, at UWS in 2002.
Photo: William Tan
OPERATIONS REVIEW
Exquisitely camouaged: Leafy Seadragon and Weedy Seadragon
Up close and personal: Memorable encounters with friendly fur seals
Sparkling performance: The Rhythmic Gymnasts from CHIJ (Kellock) as starshes promoting the marine conservation message
Over two years in the making, the facility located within UWS features a 600-seat sheltered viewing grandstand and an elevated air-conditioned gallery that overlooks the performance area, providing visitors with greater convenience and comfort, and serving as a unique venue for corporate events. Mr S Iswaran, Senior Minister of State for Trade and Industry and Education, graced the occasion as the Guest-of-Honour. UWS was one of the venues for the I Do Weddings 2010, a mass wedding solemnisation ceremony for 118 couples that was supported by the Ministry of Community Development, Youth and Sports of Singapore and held in Sentosa on 10 October 2010. Four couples exchanged their vows by the Dolphin Lagoon while one couple took the plunge into the Reef Colony Tank and tied the knot underwater amongst hundreds of marine creatures. The unique weddings at UWS attracted media attention and garnered mainstream media coverage. The overall interest in the Integrated Resorts will remain strong and downstream competition among the other attractions is expected to stay intense in 2011. However, there are good reasons to be optimistic. The opening of the new Dolphin Lagoon coupled with intensied sales and marketing efforts this year have shown indications of positive impact in the second half of the year. A certain amount of this momentum is expected to carry through into 2011. The scheduled reopening of Rasa Shangri-La Sentosa, a 500-room hotel situated next to UWS, in January 2011, is envisaged to boost visitorship.
Magical experience: Meet-the-Dolphins sessions at the new Dolphin Lagoon
UNDERWATER WORLD PATTAYA In 2010, Underwater World Pattaya (UWP) performed satisfactorily despite the instability in Thailand. Taking advantage of the improved climate for tourism in 2010, UWP leveraged its networks to grow both foreign and local visitorship, working closely with the Tourism Authority of Thailand and with other partners such as travel agents, museums and the media. During the Songkran Festival, Thailands New Year, in April 2010, UWP, in collaboration with Coke and Charoen Pokphand Group (CP), staged football games for UWP visitors and rolled out a multi-faceted advertising campaign across TV, radio, print and online platforms. In August 2010, Dr Pichai Songchaeng, President of National Science Museum, invited UWP to participate in the National Science and Technology Fair, Thailands largest science and technology festival.
Annual Report 2010
Photo: Joseph Nair
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OPERATIONS REVIEW
Aqua Monsters: Exotic freshwater animals at Underwater World Pattaya
Family Fun: Celebrating Childrens Day at Underwater World Pattaya
In its effort to enhance visitors experience, UWP offered innovative displays with unique themes this year: the Aqua Monsters exhibit, the Ray Pool display and the Koi feeding with milk bottle programme. UWP will continue to face challenges from the instability in Thailand and competition from other attractions. Riding on the momentum from 2010, UWP will forge ahead with concerted marketing efforts to extend their reach to emerging foreign markets and further strengthen their position in the local market. CHENGDU HAW PAR OCEANARIUM The business environment for Chengdu Haw Par Oceanarium (CHPO) was challenging in 2010. The delayed opening of the revamped Chenghua Park where CHPO is situated and the heightened competition resulting from the entry of a new marine theme park located at the outskirt of Chengdu affected the visitorship of CHPO unfavourably. To address the challenges, CHPO introduced innovative programmes that generated publicity to attract visitation. Capitalising on the World Cup fever, CHPO launched an underwater football show in June 2010. An innovative method was developed by CHPO to perform the renowned Sichuan Operas art of Face Change speedy changes of masks underwater, a rst in the world. Launched during Chinas National Day period in October 2010, the underwater Face Change performances were well received. Constantly seeking to engage visitors in new ways, CHPO also offered Turtle and Koi feeding activities for visitors.
World Cup Fever: Underwater football show at Chengdu Haw Par Oceanarium
Annual Report 2010
Worlds First: Underwater Face Change performance at Chengdu Haw Par Oceanarium
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While competition from other attractions will continue to pose challenges to CHPO, the Oceanarium is likely to benet from the reported opening of the revamped Chenghua Park in the second half of 2011, which should provide greater accessibility to the Oceanarium. In the longer term, the progressive opening of the nearby Recreation and Business District may further improve the business prospects of CHPO.
OPERATIONS REVIEW
Property & Investments

PROPERTY The Groups investment property portfolio comprises 45,922 square metres of commercial and industrial space in Singapore, Malaysia and Hong Kong. Singapore Haw Par Centre and Haw Par Glass Tower are two ofce buildings located in Clemenceau Avenue with a total lettable area of 13,567 square metres. Haw Par Glass Tower achieved 90% occupancy during the year with a committed 100% occupancy for 2011 while Haw Par Centre saw an improved occupancy commitment of 85% for the year and into 2011. Haw Par Technocentre is a light industrial building located in Commonwealth Drive with a total lettable area of 15,700 square metres. The building maintained a good occupancy of 96% during the year. Malaysia Menara Haw Par, a freehold commercial building located in Kuala Lumpurs Golden Triangle along Jalan Sultan Ismail, has a net lettable area of 16,180 square metres. Despite the persistent over-supply of ofce space in Kuala Lumpur, the buildings occupancy improved from 76% to 82% over the year. Hong Kong Three ofce/industrial units at Westlands Centre, Quarry Bay, which provide a lettable area of 475 square metres, were fully leased. The property segments in which we operate continue to face an over-supply situation. While the economic climate has improved, a quick rebound of rates is not anticipated. Any potential adverse impact on the performance of our properties is mitigated by their good locations and managements resilience against uctuations in tenancy. INVESTMENTS The Group has substantial investments in various securities that are actively managed under the guidance of the Investment Committee. These investments have provided the Group with a stable source of recurring dividend income and nancial strength over the years. The key investments in the Group include:
Gross Investment Income 2010 2009 $000 $000
Annual Report 2010
Investment Portfolio Prole
No. of shares 2010 2009
Fair Value 2010 2009 $000 $000
Quoted Equity Securities United Overseas Bank Limited 66,116,619 UOL Group Limited 41,428,805 United Industrial Corporation Limited 67,558,000
63,882,816 41,428,805 67,558,000
1,203,322 196,787 168,895
1,257,214 168,201 140,521
38,628 4,143 2,027
38,330 3,107 2,027
25
Guest-of-Honour, Mrs Yu-Foo Yee Shoon, Singapores Minister of State for Community Development, Youth and Sports (centre) and Mr A K Han, Executive Director, Haw Par Corporation Limited, handing a cheque of S$100,000 to Ms Chia Yong Yong, President of the Society for the Physically Disabled at the Tiger Balm Record Roar.
People & The Community

COMMUNITY In line with the Groups corporate social responsibility mission, contributions were made to charitable organisations and educational concerns. Some of these included the Singapore Presidents Challenge, the YMCA-Lim Kim San Volunteers Programme, and the Society for the Physically Disabled. Haw Par Healthcare celebrated the Year of the Tiger on the seventh day of the Chinese New Year, 20 February 2010, with the Tiger Balm Record Roar a fundraising event in support of the Society for the Physically Disabled (SPD) held at Underwater World Singapore. The event set a record in the Singapore Book of Records as the largest gathering of people born in the Year of the Tiger. Amongst them were Mrs YuFoo Yee Shoon, Singapores Minister of State for Community Development, Youth and Sports and the Guest-of-Honour for the event, and Ms Chia Yong Yong, President of SPD, both born in the Year of the Tiger. Courageous and resilient in the face of setbacks, the SPDs beneciaries demonstrate the spirit of the Tiger. Haw Par Healthcare succeeded in raising S$100,000 for SPD. In support of the meaningful cause that no child shall be left behind, Underwater World Singapore (UWS) hosted the fundraising event Children for Children 2010 where some 1,100 underprivileged children from various schools and non-prot organisations celebrated Childrens Day at UWS. Jointly organised by The Business Times, The Arts House and CHIJ (Kellock), the event raised a total of $282,050 from corporate sponsors. The net proceeds were donated to ChildAid which supports The Business Times Budding Artists Fund and The Straits Times School Pocket Money Fund. RAdm Lui Tuck Yew, Minister for Information, Communications and the Arts, was the Guest-of-Honour. Underwater World Pattaya (UWP) is committed to supporting social causes in Thailand. On 27 June 2010, UWP welcomed the underprivileged children from Ban Home Hug, a child welfare organisation located in North East Thailand that provides a caring home and offers hope to children living with HIV and other disabilities. The rare opportunity
26
Annual Report 2010
OPERATIONS REVIEW
Children from Ban Home Hug at Underwater World Pattaya
Underwater World Pattaya supports social causes in Thailand
to experience the marine world up close through UWPs feeding shows and marine biology programmes brought cheer and excitement to these children. UWP also participated in Her Royal Highness Princess Bajra Kitiyhhabas Campaign to raise awareness of violence against women held at Pattaya Beach in July 2010. In September 2010, Chengdu Haw Par Oceanarium (CHPO) offered free admission days to teachers in appreciation of their contribution to the society. ENVIRONMENT Tiger and Leopard Conservation The Group maintained its support for the conservation of tigers in several markets like Singapore, India, Germany and the United States. In Singapore, the Group continued with its sponsorship of the Malayan Tiger Exhibit at the Night Safari and the Leopard Exhibit at the Singapore Zoo.
Marine Conservation In commemoration of the International Year of Biodiversity 2010 (IYB) designated by the United Nations, UWS, UWP and CHPO held a series of activities with the aim to promote awareness, understanding and appreciation of the urgent need to conserve marine biodiversity and protect our oceans and the Earth.
27
In celebration of the Year of the Tiger and the IYB, the three oceanariums launched a Tigerthemed exhibit showcasing the uniqueness of various species of Tiger Fish. Funds collected by UWS from their Exhibit were donated to the Rafes Museum of Biodiversity Research of the National University of Singapore in support of their fundraising efforts to build a new natural history museum.
Annual Report 2010
OPERATIONS REVIEW
The three oceanariums jointly supported the Earth Hour, the biggest climate awareness campaign, by switching off the lights on the faade during Earth Hour, 8.30pm to 9.30pm on 27 March 2010. In line with our Blue Mission to inspire, educate and conserve, and in support of the Earth Hour, Every Hour movement, the three oceanariums incorporated the conservation message Reduce, Reuse, Recycle in the commentary for all their shows and feeding sessions. As part of the effort to study the migratory behaviour of the highly endangered Hawksbill Turtle (Eretmochelys imbricata), UWS collaborated with the Port of Nagoya Public Aquarium (PNPA) of Japan and the National Oceanic and Atmospheric Administration (NOAA) of the United States in the tag-and-release of 13 Hawksbill turtles off
Singapores Big Sisters Island (Pulau Subar Laut) in August 2010. Dr Mohamad Maliki Bin Osman, Senior Parliamentary Secretary for National Development (Singapore), graced the event. Satellite tracking devices were tted on these turtles. Details and preliminary results of this collaborative project were shared at the Kyoto University International Symposium Biodiversity, Zoos and Aquariums in September 2010. In August 2010, UWP participated in the beach cleanup organised by the Bang Saray Municipality. In July 2010, CHPO hosted the inauguration of the Aquatic Wildlife Conservation Month organised by the Provincial Fishery Department of Sichuan Province in China.
28
Annual Report 2010
Guest-of-Honour, Dr Mohamad Maliki Bin Osman, Senior Parliamentary Secretary for National Development (Singapore), with CHIJ (Kellock) students at the UWS Hawksbill Turtle Tag-and-Release event.
FINANCIAL REVIEW
Group earnings for FY2010 soared by 97% to $112.5 million as compared to 2009 mainly due to a gain on revaluation of investment properties and higher prots from associated companies.
Segment Prots Before Interest and Tax ($ million)

80
72.5
70
60
52.9
50
40
30
20 10 0
15.5
16.2 13.5 12.6 13.9 12.3
Healthcare
Leisure
Property
Investments
2009
2010
OVERVIEW Group earnings for FY2010 soared by 97% to $112.5 million as compared to 2009 mainly due to a gain on revaluation of investment properties and higher prots from associated companies. Group revenue at $129.8 million was 5% higher than 2009. Both Healthcare and Leisure divisions reported positive growth of 7%, offsetting the 8% lower revenue experienced by Property division. Operating prots were 2% higher than 2009 with higher investment income and higher contribution from Healthcare division. Prots from listed associate, Hua Han Bio-Pharmaceutical Holdings Limited included higher share of prots and a gain in dilution of $8.5 million. Earnings per share increased to 56.9 cents (2009: 28.9 cents) and net tangible assets per share increased to $9.76 (2009: $9.58), both attributable mainly to higher prots for the nancial year.
29
Annual Report 2010
FINANCIAL REVIEW
ROA for 2010 improved from 3.3% in 2009 to 5.9% driven by higher earnings. Increase in ROA of healthcare division from 18.1% to 18.8% is a result of favourable broad-based growth in sales and protability.
Return on Assets Employed (%)

25
18.8 18.1
20
15.9 14.8
15
8.0
7.5
10
5.9
3.3
3.4
3.1
5 Group Healthcare Leisure 2009 2010 Property Investments
RETURN ON ASSETS EMPLOYED The Group applies a Return of Assets Employed (ROA) measure to evaluate the performance of its business operations. The ROA measures protability of assets utilised by the various operations. ROA for 2010 improved from 3.3% in 2009 to 5.9%, driven by higher earnings. Given a relatively stable asset base, the increase in ROA of healthcare division from 18.1% to 18.8% is a result of favourable broad-based growth in sales and protability. On the other hand, ROA of Leisure division declined from 15.9% to 14.8% due to higher operating expenses incurred at the aquariums while ROA of Property division, which was affected by the softening of ofce rental market during the year, decreased from 8.0% to 7.5%. ROA of the investment division decreased marginally from 3.4% to 3.1%, with the increase in investment income offset by a larger asset base from equity markets recovery during the year.
30
Annual Report 2010
FINANCIAL REVIEW
Healthcare (Sales of Tiger Balm and Kwan Loong Brand Products) ($ million)
60 55 1,800 50 45 40 35 30 25 20 15 10 5 0 America 2009 Europe Middle East Asia
10.5 11.2 6.8 7.6 14.9 16.9 41.9 43.4
Visitorship of Aquariums (000)

2,000
1,701 1,544
1,600 1,400 1,200 1,000 800 600 400 200 0
2009
2010
2010
SEGMENTAL PERFORMANCE Healthcare Healthcare division achieved a 7% and 4% growth in sales to $79.1 million and in operating prots to $16.2 million respectively. Sales of Tiger Balm Brand products have been supported by a recovery in global economy and increase in consumer condence. Territorial mix showed favourable growth in all regions, with strongest growth coming from key markets in Middle East. Leisure With the recovery of tourism industry, the number of visitors to the aquariums increased by 10% from 2009 level and propelled revenue 7% higher than 2009 to $35.0 million. Despite the higher revenue, performance of Leisure division was brought down by higher operating expenses at the aquariums, which resulted in a 7% decline in prots to $12.6 million.
31
Annual Report 2010
FINANCIAL REVIEW
Property (Building Occupancy Rates) (%)

100.0
Investments (Cost vs Fair Value) ($ million)
100
85.0
97.0 96.0 90.0 81.0
1,800 1,600
76.0 1,597.4 1,574.9
80
67.0
1,400 1,200 1,000 800
60
40 600
444.5 459.1
20
400 200
0 Haw Par Haw Par Haw Par Centre Glass Tower Technocentre 2009 2010 Menara Haw Par
0 2009 2010
Property An inux of new ofce supply of approximately 2 million square feet in the Singapore property market exerted downward pressure on rental rates, Property division experienced a 8% and 11% dip in rental revenue to $15.7 million and prots to $12.3 million respectively. The decrease in prots against last year is also attributable to higher operating expenses. The division also recorded a 9% increase in fair value of investment properties with a rebound in ofce property sector towards the end of the year.
Investments Investment income increased by 9% from 2009 due to higher dividends received from our investment portfolio and a gain from redemption of debt securities in our investment portfolio. The Groups investment portfolio enjoyed a healthy valuation surplus of $1,115.8 million.
32
Annual Report 2010
FINANCIAL REVIEW
The Group ended the nancial year with a strong nancial position with net cash balances of $111.4 million, after dividend payments of $39.5 million.
Shareholders funds ($ million)
1,950
1,941.9
1,940
1,930
1,920
1,910
1,902.8
1,900
1,890 1,880 2009 2010
FINANCIAL POSITION Shareholders funds increased 2% to $1,942 million mainly due to the higher revenue reserves from the higher earnings this nancial year. The Group ended the nancial year with a strong nancial position with net cash balances of $111.4 million, after dividend payments of $39.5 million. The Group enjoyed a healthy cash inow of $24.9 million during the year. Cash generated by operating activities decreased from $82.3 million to $38.3 million in 2010 because a large part of the dividend income were non-cash and scrip shares were obtained in lieu of cash during the year.
DIVIDENDS In view of the higher earnings and stable nancial position, a second & nal dividend of 14 cents per share is being proposed at the coming Annual General Meeting.
33
Annual Report 2010
SHARE PRICE & TRADING VOLUME
Trading Volume ('000)

22,000 20,000 18,000
Share Price ($)

9.00 8.00 7.00
16,000 14,000 12,000 10,000 8,000 6,000 2.00 4,000 2,000 1.00 6.00 5.00 4.00 3.00
2006 Trading Volume
2007
2008 Share Price
2009
2010
2006 Share Price ($) Last Done High Low

Annual Report 2010
2007
2008
2009
2010
7.10 7.50 5.10
7.11 8.45 6.55
3.81 7.61 2.81
5.81 6.00 3.27
6.13 6.35 5.50
Per share Earnings (cents) Dividend net (cents) Dividend cover (times) Net tangible assets per share ($) 51.6 20.0 2.6 8.61 77.8 25.0* 3.1 9.71 39.6 20.0 2.0 6.63 28.9 20.0 1.4 9.58 56.9 20.0 2.8 9.76
Include a 5 cents special dividend.
34
CORPORATE GOVERNANCE REPORT
The Board of Directors (the Board) and management of Haw Par Corporation Limited (the Company, collectively with its subsidiaries the Group) is committed to uphold good corporate governance practices to safeguard the interests of its shareholders. Corporate governance practices in the Group adhere and align with best practices set out in the Code of Corporate Governance 2005 (the Code). The following describes the Groups corporate governance practices with specic references to the Code. BOARD MATTERS Principle 1: Boards Conduct of its Affairs The principal responsibilities of the Board include: approving strategic plans and annual budgets; approving major funding, investment and divestment proposals; approving the appointment of Directors to the Board; ensuring that management establishes and maintains a sound system of internal controls, risk management, nancial reporting and statutory compliance; reviewing the performance of management in attaining agreed goals and objectives; approving the announcement of nancial results and declaration of dividends; and reviewing the Groups risk management framework.
All Board members bring their independent judgement, diversied knowledge and experience to bear on issues of strategy, performance, resources and standards of conduct. The Board meets at least four times a year to review performance and business strategy of the Group. Meetings are scheduled in advance in the preceding year. Ad-hoc meetings can be called when there are important and urgent matters requiring the Boards consideration and approval in writing is sometimes needed in between the scheduled meetings. The Group has adopted internal guidelines, which set out matters requiring board approval. These guidelines also include limits of authority given to management to facilitate operational efciency. The Board has delegated specic responsibilities to four Committees, namely, the Audit, Nominating, Remuneration and Investment Committees. The composition of each Committee is as follows:
Audit Nominating Committee Committee Remuneration Committee Investment Committee
Name
N/A N/A N/A Chairman Member Member N/A N/A N/A N/A
Member N/A Chairman N/A N/A Member N/A N/A N/A N/A
Member N/A Chairman N/A Member N/A N/A N/A N/A N/A
Chairman Member N/A N/A N/A N/A N/A Member Member N/A
Sat Pal Khattar (Independent) Reggie Thein (Independent) Hwang Soo Jin (Independent) Lee Suan Yew (Independent) Lim Kee Ming (Independent) Wee Ee Chao (Non-independent) Chng Hwee Hong (Executive) Han Ah Kuan (Executive) N/A Not Applicable
35
Annual Report 2010
Wee Cho Yaw (Non-executive and non independent) Wee Ee Lim (Executive and non-independent)
The Board held four meetings during the year. The Articles of Association of the Company allow Directors to participate in Board meetings and Committee meetings by telephone conference whereby all persons participating in the meeting are able to communicate as a group. The attendance of Directors at meetings of the Board and the Committees was as follows: Number of meetings attended in 2010 Name Wee Cho Yaw Wee Ee Lim
(1 )
Main Board 4 4 2 4 4 4 4 3 4 4 4
Audit Committee 4
Nominating Committee 1 1
Remuneration Committee 1 1 1 1
Investment Committee 6 6
Sat Pal Khattar Reggie Thein Hwang Soo Jin Lee Suan Yew Lim Kee Ming Wee Ee Chao Chng Hwee Hong Han Ah Kuan Number of meetings held in 2010
(1)
3 4 4 1
6 6 4 1 1 6
Mr Wee Ee Lim was in attendance at the meetings of the Audit and Remuneration Committees although he is not a member of either Committee to provide input to the Committees.
Appropriate training and comprehensive orientation program to familiarise newly appointed Directors with the Groups businesses, strategic plans, objectives and site visits are in place. The Directors are continuously updated on changes to important relevant laws and regulations in the Companies Act, other relevant legislation and industry-related matters. Principle 2: Board Composition and Guidance There are ten Directors on the Board. The Board considers the present size appropriate for the current scope and nature of the Groups operations. The Nominating Committee (NC), having regard to the Codes guidance for assessing independence, is of the view that ve Non-Executive Directors were independent and no individual or small group of individuals dominated the decisions of the Board. The Board contributes a range of relevant knowledge and industry experiences that enables management to benet from their diverse and objective views on issues brought before the Board. The Board is looking to appoint new members to its Board who can serve the Board for a longer period of time as the elder members of the Board step down. In this context, Dr Lim Kee Ming has expressed his desire to not offer himself for re-election at the next Annual General Meeting (AGM). We thank him for his services rendered. Principle 3: Chairman and Chief Executive Ofcer There is a clear separation of the role and responsibilities of the non-executive Chairman and the Chief Executive Ofcer (CEO), who is also the son of the Chairman. The Chairmans principal role is to lead and guide the Board while the CEO has executive responsibilities over the Groups day-to-day operations.
36
Annual Report 2010
Principle 4: Board Membership The Company has adopted a formal and transparent process for the appointment of new Directors through the recommendation of the Nomination Committee (NC). Before making its recommendation, the NC will select candidates taking into consideration the candidates background, qualication, knowledge, experience, independence and other directorship. Potential candidate are expected to be person of integrity and possess core competencies to meet the needs of the Group and to complement the existing competencies at the Board. The NC comprises three members, the majority of which, including the chairman of the NC, are independent Directors. The Chairman of the NC is neither a substantial shareholder of the Company nor directly associated with a substantial shareholder of the Company. The NC is empowered and adequately resourced to identify potential candidates for the Board. A formal letter is provided to each Director, upon his appointment, setting out the Group governance policies and the Directors duties and obligations. The NC makes annual recommendations to the Board on all board appointments as well as re-nomination of Directors having regard to their contributions and performance on a qualitative basis. At each AGM, one-third of the Board are required to retire from ofce by rotation and submit themselves for re-election. Directors who are above the age of 70 are also statutorily required to seek re-appointment at each AGM. Key information regarding the Directors is provided under the Board of Directors section of this Annual Report. Principle 5: Board Performance The NC evaluated and assessed the effectiveness of the Boards performance as a whole taking into consideration, amongst other things, the Boards discharge of its principal responsibilities, earnings of the Group, return on equity and the share price performance of the Company. The NC is of the opinion that the Board as a whole had performed well during the year. The Chairman of the Board and the Chairman of the NC evaluate the performance, commitment and contribution of individual Directors on a qualitative basis. They also review the contribution of Executive Directors, and are of the view that the performance of each of them has been satisfactory. Principle 6: Access to Information The Board is provided with adequate and timely information by management which includes quarterly management reports highlighting the Groups nancial performance and position, draft announcements of nancial results and matters requiring Boards decision, at least ve working days prior to Board meetings. Board meetings for each year are scheduled at least 5 days in advance. The Board has unrestricted access to the advice and services of senior management and the Company Secretary at all times. The Company Secretary attends all Board and Committee meetings and ensures that the Company complies with all regulatory requirements. The Company Secretary is responsible for ensuring information ows to the Board and its Committees and between Senior Management and non-executive Directors, as well as facilitating orientation and assisting with professional development as required. Under the Articles of Association of the Company, the decision to appoint or remove the Company Secretary rests with the Board.
37
Annual Report 2010
Principle 6: Access to Information (Continued) The Board is also provided with opportunities to meet with managers and head of divisions to deepen its understanding of the businesses. The Audit Committee meets the external and internal auditors separately at least once a year, without the presence of the President and CEO and Senior Management. To assist the Directors to carry out their duties and if needed, the Company will, with the approval of the Chairman, appoint independent professional advisors to render the appropriate advice. REMUNERATION MATTERS Principle 7: Procedures for Developing Remuneration Policies The Remuneration Committee (RC) comprises three members, the majority of whom, including the chairman of the RC, are independent Directors. The RC is supported by Group Human Resource and/or external consultants as and if needed. The principal responsibilities of the RC are: to recommend to the Board for its endorsement, a framework of remuneration for Directors and key executives; to determine and x the remuneration packages for the Executive Directors including the President and CEO; to review the remuneration packages for key executives; and to administer the Companys share option schemes.
During the year, the RC has recommended the amount of directors fees to be paid to the Non-Executive Directors, assessed the performance and determined the bonus and salary components for the Executive Directors, reviewed the remuneration packages for key executives and granted share options to eligible staff and set the terms thereof. Principle 8: Level and Mix of Remuneration The RC takes into consideration current industry norms on compensation and adopts a remuneration policy reective of industry practices which is responsive to the market. None of the Non-Executive Directors are on service contracts or have consultancies with the Company. Only Non-Executive Directors, including the Chairman of the Board, are paid directors fees which comprise basic fees and additional fees for serving on Board committees. Directors fees recommended by the RC are submitted for endorsement by the Board and payment of these fees is subject to shareholders approval at each annual general meeting. None of the Non-Executive Directors has been granted share options even though the Companys share option scheme allows for such grants. The Group remunerates its employees at competitive and appropriate levels, commensurate with their performance and contributions. The remuneration framework comprises xed compensation, variable compensation, provident fund, benets and long-term incentives that are designed to strike a balance between linking rewards to short-term and long-term objectives while maintaining competitiveness in the market.
38
Annual Report 2010
Principle 8: Level and Mix of Remuneration (Continued) In the annual review of remuneration of the CEO and Executive Directors, RC also takes into consideration performance of the individuals in addition to the relevant comparative remuneration in the market. The performance-related elements of the remuneration are designed to align interests of Executive Directors with those of other shareholders. The performance criteria include the achievement of nancial objectives and using nancial indicators like operating protability and return of assets employed over a period of time. Their remuneration packages include a variable bonus element which is performance based and these are reviewed annually by the RC. Share options are only granted to the Executive Directors and eligible key executives that can be exercised after the vesting period. More information on the Haw Par Corporation Group 2002 Share Option Scheme can be found in the Directors Report. Principle 9: Disclosure of Remuneration Details of the share option schemes are disclosed in the Report of the Directors and Note 25(b) to the nancial statements. The details of the remuneration of each individual Director and the top ve key executives for nancial year 2010 are as follows: Benet -in-kind and others %
Name
Base or Directors xed Fees salary % %
Variable bonus %
Total %
Share options granted No. of shares
$1,000,001 to $1,200,000 Wee Ee Lim $400,001 to $600,000 Chng Hwee Hong Han Ah Kuan Below $200,000 Wee Cho Yaw Sat Pal Khattar Reggie Thein Hwang Soo Jin Lee Suan Yew Lim Kee Ming Wee Ee Chao
53
39
100
54 48
22 27
24 25
100 100
48,000 48,000
Top 5 Key Executives Number of executives of the Group in remuneration bands: $200,001 to $400,000 5
There were no employees (other than the CEO) who were immediate family members of the Directors or the CEO. Immediate family members means the spouse, child, adopted child, step-child, brother, sister and parent.
39
Annual Report 2010
100 100 100 100 100 100 100
100 100 100 100 100 100 100
ACCOUNTABILITY AND AUDIT Principle 10: Accountability The Management provides the Board with relevant and timely information on actual performance, nancial position and business prospects on a quarterly basis and submit Annual Budgets for adoption by the Board. Price-sensitive information, including announcements of nancial results, is released to shareholders through the SGXNET and the Groups website. The Companys Summary Financial Report is sent to all shareholders and its Annual Report is available on request and accessible on the Companys website. Principle 11: Audit Committee The Audit Committee (AC) comprises three members, all of whom are independent Directors. The chairman of the AC is a senior accountant with over 40 years experience in the profession while the rest of the members have substantial business experience. The Board is of the view that the members of the AC have the requisite accounting, nancial management expertise and experience to discharge the ACs responsibilities effectively. The principal responsibilities of the AC are: to review and approve the audit plans of the internal and external auditors; to consider the auditors evaluation of the system of internal controls; to recommend the re-appointment of external auditors and approve the compensation of the external auditors; to review annually the independence and objectivity of the external auditors, the cost effectiveness of the audit, and the nature and extent of non-audit services; to ensure adequacy, independence, effectiveness and objectivity of the internal audit function and that it meets professional standards; to review the Groups quarterly and full year results and annual nancial statements for approval by the Board, and the appropriateness and consistency of accounting principles and policies adopted across the Group, including signicant nancial reporting issues and judgements; to review the risk management policies and processes; to build consensus among Board members/management on acceptable risk levels; to review interested person transactions on a quarterly basis. to review incidences of whistle-blowing.

Annual Report 2010
During the year, the AC had fullled its responsibilities as stated above. In the review of non-audit services, the AC was satised that non material possible conicts would not affect the independence of the external auditors. It has recommended to the Board to re-appoint PricewaterhouseCoopers LLP as auditors for nancial year 2011. The AC has full authority to investigate any matter on issues of internal controls, suspected fraud or irregularity. It has full access to and cooperation of the Management and full discretion to invite any staff to attend its meetings.
40
Principle 11: Audit Committee (Continued) Whistle Blowing Policy The Company has adopted a whistle-blowing policy which will provide a channel for employees and others to bring to the attention of the Audit Committee (AC) any improprieties committed by the management or staff of the Company. A whistle blowing unit has been set up to review all matters reported and comprises the Group Human Resource Manager and Group Internal Audit Manager. The AC reviews quarterly all cases reported and investigated. Details of the whistle blowing policy are posted in the Companys intranet for staffs reference and new staff are briefed of this policy during their orientation. Principle 12: Internal Controls and Risk Management During the year, the AC met four times with the internal and external auditors to review their audit plans to evaluate internal controls of the Group. It also met with the internal and external auditors separately without the presence of the Management. The AC adopts key principles from Guidebook for Audit Committee in Singapore, issued by the Audit Committee Guidance Committee in Singapore in 2008. Based on the reports by the internal and external auditors and review undertaken by the AC, the Board is satised that the internal controls of the Group were adequate to safeguard the Companys interests. The Group has established a formal risk management framework across the entire organisation to provide a structured approach to ensure that all risks are identied, mitigated and managed. The Risk Management Committee, chaired by the CEO and comprising four other senior key executives (including 2 executive directors), oversees various aspects of control and risk management policies and processes of the Group. It meets annually to review risk management perimeters across the Group and reports annually to the AC on its ndings and action taken to address the key risks identied. The framework enables management to have a formal structure and a standardised process in risk mangement reporting. The framework is designed to align with the Group strategic, operational, reporting and compliance objectives. Management considers risk identication and its impact on the Group. Risks are analysed and assessed in terms of risk impact and risk likelihood. Management will evaluate the options and controls needed to deal with identied risks. The Risk Management Committee will perform ongoing reviews to monitor implementation and effectiveness of the risk management activities and make renements as necessary. Major operational risks such as competition, manufacturing capability, regulatory compliance and business interruption are managed by leveraging on the Groups experience and knowledge of local market conditions, taking out appropriate insurance coverage, and having effective business continuity plans. Financial risks are mitigated by using appropriate hedging instruments when necessary and actively managing foreign exchange and credit exposures. Further details on managing nancial risks are disclosed in Note 26 on Page 96 of the Annual Report.
41
Annual Report 2010
Principle 13: Internal Audit The Company has an internal audit (IA) department comprising four staff. The Group Internal Audit Manager reports to the Chairman of the AC on audit matters and to the CEO on administrative matters. The IA follows the Standards for the Professional Practice of Internal Auditing set by the Institute of Internal Auditors. IA adopts strict procedures in reporting its audit ndings to the Management and AC. The role of IA is to render support to the AC in ensuring that the Group maintains a sound system of internal controls by performing regular monitoring and testing of key controls and procedures, review of all operational and nancial activities and undertaking investigations as requested by AC. The IA submits its plan to AC for approval at the beginning of the year. Internal audit reviews were carried out on all signicant business units in the Group and a summary of ndings and recommendations are discussed during each AC meeting. The AC is of the view that the internal audit function is adequately resourced. Principles 14 and 15: Communication with Shareholders The Company strives to facilitate effective communication and to convey to its shareholders pertinent information in a regular and timely manner. Communication is generally made through annual reports, press releases, SGXNET announcements and its website at www.hawpar.com. When matters requiring shareholders meetings are to be held, notices are published in the newspapers and reports or circulars are sent in a timely manner to all shareholders. The CEO, Group Financial Controller and the Corporate Communications Manager hold regular meetings with research analysts, fund managers and institutional investors to review the Companys performance and provide investors with a better understanding of the Groups businesses. At AGMs, shareholders are invited to raise questions on any matters that need clarication and appropriate responses are given. The chairpersons of the AC, NC and RC as well as the external auditors are present at the AGMs to address all queries from shareholders on various matters affecting the Group and the conduct of external audit. Key management personel are also present at AGMs to assist in answering queries. The reception after the AGM provides an opportunity for shareholder to informally communicate their views and expectations to the company. The Companys Articles of Association allow a shareholder to appoint one or two proxies to attend and vote at the Companys general meetings. Separate resolutions on each distinct issue are tabled at the general meetings. If requested, the Company allows shareholders who hold shares through nominees to attend the AGM as observers.
42
Annual Report 2010
OTHER GOVERNANCE PRACTICES Investment Committee The Investment Committee (IC) is headed by the Chairman of the Board and comprises three other Executive Directors. The Committee meets once every 2 months to review the Groups investments and funding requirements. The role of the IC is to review the investments of the Group, in terms of their performance and the related market risks. Interested Person Transactions Management reports to the AC on a quarterly basis all interested person transactions. During the year, there were no interested person transactions entered into by the Company and any Director that required disclosure under the Listing Rules. Material Contracts Except as disclosed in page 92 (Note 22 - Related Party Transactions) of the annual report, there were no other material contracts of the Company or its subsidiaries involving the interests of the CEO, any director or controlling shareholder. Dealings in Securities The Group adopts the Best Practices Guide with respect to dealings in securities issued by the Singapore Exchange Securities Trading Limited. It has a policy which prohibits its ofcers from dealing in the securities of the Company during the period commencing two weeks before the announcement of the nancial results for each of the rst three quarters and one month before the announcement of the full year results. The Company Secretary issues guidelines periodically to Directors and employees reminding them of the prohibitions in dealing with the Companys securities while in possession of material unpublished price-sensitive information and awareness of the applicability of the insider trading laws at all times.
43
Annual Report 2010
STATUTORY REPORTS & FINANCIAL STATEMENTS

CONTENTS 45 Directors Report 49 Statement by Directors Pursuant to Section 201(15) 50 Independent Auditors Report 52 Consolidated Income Statement
Annual Report 2010
53 Consolidated Statement of Comprehensive Income 54 Statements of Financial Position 55 Consolidated Statement of Changes in Equity 57 Consolidated Statement of Cash Flows 59 Notes to the Financial Statements
44
DIRECTORS REPORT
For the financial year ended 31 December 2010
The Directors present their report to the members together with the audited financial statements of the Group for the financial year ended 31 December 2010 and the statement of financial position of the Company as at 31 December 2010. DIRECTORS The Directors of the Company in office at the date of this report are as follows: Wee Cho Yaw Wee Ee Lim Sat Pal Khattar Reggie Thein Hwang Soo Jin Lee Suan Yew Lim Kee Ming Wee Ee Chao Chng Hwee Hong Han Ah Kuan (Chairman) (President & Chief Executive Officer)
(Executive Director) (Executive Director)
ARRAngEmEnTS TO EnAblE DIRECTORS TO ACquIRE ShARES AnD DEbEnTuRES Neither at the end of the financial year, nor at any time during the financial year, was the Company a party to any arrangement whose object was to enable the Directors to acquire benefits by means of the acquisition of shares, warrants, share options in, or debentures of, the Company or any other body corporate, other than pursuant to the Haw Par Corporation Group 2002 Share Option Scheme (2002 Scheme). DIRECTORS InTERESTS In ShARES OR DEbEnTuRES The Directors holding office at 31 December 2010 had no interests in the shares, warrants, share options in, or debentures of, the Company and/or its subsidiaries as recorded in the register of Directors shareholdings kept by the Company under Section 164 of the Companies Act, Cap 50 except as follows: Direct interest as at 1.1.2010 31.12.2010 21.1.2011 Interest in the Companys ordinary shares Wee Cho Yaw 993,067 993,067 Wee Ee Lim 397,448 397,448 Sat Pal Khattar Hwang Soo Jin 30,000 35,000 Lim Kee Ming 49,606 49,606 Wee Ee Chao 12,570 12,570 Chng Hwee Hong 244,400 292,400 Han Ah Kuan 14,000 9,000 Deemed interest as at 1.1.2010 31.12.2010 21.1.2011
Options to subscribe for the Companys ordinary shares (Under the 2002 Scheme) Chng Hwee Hong Han Ah Kuan 235,000 139,000 144,000 144,000 144,000 144,000
45
Annual Report 2010
993,067 397,448 35,000 49,606 12,570 292,400 9,000
61,075,370 56,777,958 87,472 125,752 56,899,438
63,261,370 58,963,958 87,472 125,752 59,085,438
63,261,370 58,963,958 87,472 125,752 59,085,438
DIRECTORS REPORT (COnTInuED)

DIRECTORS COnTRACTuAl bEnEfITS Since the end of the previous financial year, no Director has received or has become entitled to receive benefits required to be disclosed by Section 201(8) of the Companies Act, Cap 50 by reason of a contract made by the Company or a related corporation with the Director or with a firm of which he is a member or with a company in which he has a substantial financial interest except those disclosed in Note 22 to the financial statements. ShARE OPTIOnS Haw Par Corporation Group 2002 Share Option Scheme The 2002 Scheme was approved by members of the Company at an Extraordinary General Meeting held on 22 May 2002. The 2002 Scheme is granted to key executives personnel and directors (including non-executive directors) of the Company and the maximum life-span of exercising the options is 10 years. The exercise price of the options is determined at the average of the closing prices of the Companys ordinary shares as quoted on the Singapore Exchange for five market days immediately preceding the date of the grant. The options are exercisable beginning on the first anniversary from the date when the options are granted or the second anniversary if the options are granted at a discount to the market price. Once the options are vested, they are exercisable for a period of four years. The options may be exercised in full or in part in respect of 1,000 shares or any multiple thereof, on the payment of the exercise price. The Group has no legal or constructive obligation to repurchase or settle the options in cash. The share option scheme size shall not exceed 15% of the total number of issued shares of the Company on the day preceding grant date and exercise prices are allowed to be set at discounts of up to 20% to their market price. The number of unissued ordinary shares of the Company covered by the options in relation to the 2002 Scheme outstanding at the end of the financial year was as follows: number of shares covered by the options Date of grant 2.3.2006 2.3.2007 3.3.2008 2.3.2009 1.3.2010 balance at 31.12.2010 72,000 244,000 264,000 35,000 378,000 993,000 Exercise price $5.52 $7.54 $6.47 $3.71 $5.86 Exercise period 2.3.2007 -1.3.2011 2.3.2008 -1.3.2012 3.3.2009 - 2.3.2013 2.3.2010 - 1.3.2014 1.3.2011 - 28.2.2015
Annual Report 2010
In 2010, options to subscribe for 386,000 unissued shares in the Company at the exercise price of $5.86 per share were granted and accepted under the 2002 Scheme. No options have been granted at a discount to the market price of shares of the Company. During the financial year, options to subscribe for 54,000 unissued shares were cancelled and 425,000 shares were issued by virtue of the exercise of options. The market price on the date of exercise ranged from $5.78 to $6.26.
46

ShARE OPTIOnS (continued) Other information required by the Singapore Exchange Securities Trading Limited (Pursuant to Listing Rule 852 of the Singapore Exchange Listing Manual) (1) The share option scheme of the Company is administered by the Remuneration Committee, comprising the following Directors: Sat Pal Khattar Wee Cho Yaw Hwang Soo Jin (2) (Chairman)
The details of options granted to the Directors of the Company under the 2002 Scheme are as follows:
Aggregate Aggregate Aggregate number number number of shares Aggregate of shares of shares comprised number comprised comprised in options of shares in options in options that have comprised granted since exercised since expired since in options commencement commencement commencement outstanding of scheme to of scheme to of scheme to as at
number
of shares comprised in options granted during the financial year
name of director
31.12.2010
31.12.2010
31.12.2010 31.12.2010
Wee Ee Lim Chng Hwee Hong Han Ah Kuan (3) (4) (5) (6)
48,000 48,000
48,000 427,000 359,000
48,000 283,000 215,000
144,000 144,000
no options are granted to controlling shareholders of the Company and their associates (as defined in the Listing Manual of Singapore Exchange Securities Trading Limited); no participant has received 5% or more of the total number of options available under the share option scheme; no options have been granted at a discount to the market price of shares of the Company for the financial year ended 31 December 2010; and
Annual Report 2010
options granted by the Company do not entitle the holders of the options, by virtue of such options, any right to participate in any share issue of any other company in the Group.
47

AuDIT COmmITTEE The Audit Committee comprises three members, all of whom are independent non-executive Directors. The members of the Audit Committee are as follows: Reggie Thein Hwang Soo Jin Lee Suan Yew (Chairman)
In accordance with Section 201B(5) of the Companies Act, Cap 50, the Audit Committee has reviewed with the Companys internal auditors their audit plan and the scope and results of their internal audit procedures. The Committee has also reviewed with the Companys independent auditor, PricewaterhouseCoopers LLP, their audit plan, their evaluation of the system of internal accounting controls, their audit report on the statement of financial position of the Company and the consolidated financial statements of the Group for the financial year ended 31 December 2010 and the assistance given by the officers of the Group to them. The statement of financial position of the Company and the consolidated financial statements of the Group, as well as the independent auditors report on the same, have been reviewed by the Committee prior to their submission to the Board of Directors. The Committee has recommended to the Board of Directors the re-appointment of PricewaterhouseCoopers LLP as independent auditor of the Company. InDEPEnDEnT AuDITOR PricewaterhouseCoopers LLP has expressed its willingness to accept re-appointment as independent auditor of the Company and a resolution proposing its re-appointment will be submitted at the forthcoming Annual General Meeting.
On behalf of the Board
Annual Report 2010
Wee Ee lim President & Chief Executive Officer
Singapore 23 February 2011
48
STATEmEnT bY DIRECTORS
Pursuant To Section 201(15)
We, Wee Cho Yaw and Wee Ee Lim, being two of the Directors of Haw Par Corporation Limited, do hereby state that, in the opinion of the Directors: (a) the statement of financial position of the Company and the consolidated financial statements of the Group as set out on pages 52 to 113 are drawn up so as to give a true and fair view of the state of affairs of the Company and of the Group as at 31 December 2010 and of the results, changes in equity and cash flows of the Group for the financial year then ended; and at the date of this statement, there are reasonable grounds to believe that the Company will be able to pay its debts as and when they fall due.
(b)
On behalf of the Board
Wee Ee lim President & Chief Executive Officer
Singapore 23 February 2011
49
Annual Report 2010
InDEPEnDEnT AuDITORS REPORT

To The Members Of Haw Par Corporation Limited
REPORT On ThE fInAnCIAl STATEmEnTS We have audited the accompanying financial statements of Haw Par Corporation Limited (the Company) and its subsidiaries (the Group) set out on pages 52 to 113, which comprise the statements of financial position of the Company and of the Group as at 31 December 2010, the consolidated income statement, the consolidated statement of comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows of the Group for the financial year then ended, and a summary of significant accounting policies and other explanatory information. Managements Responsibility for the Financial Statements Management is responsible for the preparation of financial statements that give a true and fair view in accordance with the provisions of the Singapore Companies Act (the Act) and Singapore Financial Reporting Standards, and for devising and maintaining a system of internal accounting control sufficient to provide a reasonable assurance that assets are safeguarded against loss from unauthorised use or disposition, that transactions are properly authorised and that they are recorded as necessary to permit the preparation of true and fair profit and loss accounts and statements of financial position and to maintain accountability of assets. Auditors Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Singapore Standards on Auditing. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance as to whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entitys preparation of financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entitys internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
50
Annual Report 2010
InDEPEnDEnT AuDITORS REPORT (COnTInuED)

To The Members Of Haw Par Corporation Limited
Opinion In our opinion, the consolidated financial statements of the Group and the statement of financial position of the Company are properly drawn up in accordance with the provisions of the Act and Singapore Financial Reporting Standards so as to give a true and fair view of the state of affairs of the Group and of the Company as at 31 December 2010, and the results, changes in equity and cash flows of the Group for the financial year ended on that date. REPORT On OThER lEgAl AnD REgulATORY REquIREmEnTS In our opinion, the accounting and other records required by the Act to be kept by the Company and by those subsidiaries incorporated in Singapore of which we are the auditors, have been properly kept in accordance with the provisions of the Act.
PricewaterhouseCoopers llP Public Accountants and Certified Public Accountants Singapore 23 February 2011
51
Annual Report 2010
COnSOlIDATED InCOmE STATEmEnT

note
The group 2010 2009 $000 $000 129,761 (56,887) 72,874 50,824 (26,126) (479) (12,287) 84,806 123,991 (52,874) 71,117 47,992 (24,648) (542) (10,434) 83,485
Revenue Cost of sales gross profit Other income Sales and marketing expenses Warehouse and delivery expenses General and administrative expenses Profit from operations Share of results of associated companies/ gain on dilution of investment in associated company (net) Fair value gains/(losses) on investment properties Profit before taxation Taxation Profit for the financial year Attributable to: Equity holders of the Company Non-controlling interests
13 11
23,521 15,436 123,763 (10,993) 112,770
7,590 (32,866) 58,209 (1,044) 57,165
112,507 263 112,770
57,036 129 57,165
Earnings per share attributable to equity holders of the Company Basic Diluted
9 56.9 cents 56.9 cents 28.9 cents 28.9 cents
Annual Report 2010
52
The accompanying notes form an integral part of these financial statements.
COnSOlIDATED STATEmEnT Of COmPREhEnSIVE InCOmE

The group 2010 2009 $000 $000 Profit for the financial year, net of tax Other comprehensive (expense)/income, after tax Fair value (losses)/gains on available-for-sale financial assets (net) Reclassification of fair value gains on disposal of available-for-sale financial assets Currency translation differences on consolidation of foreign entities (net) Share of associated companys currency translation reserve through equity accounting Share of associated companys other comprehensive (expense)/income through equity accounting Other comprehensive (expense)/income for the financial year, net of tax Total comprehensive income for the financial year Total comprehensive income attributable to: Equity holders of the Company Non-controlling interests 76,378 609 76,987 622,888 130 623,018 (30,896) 568,012 112,770 57,165
(2,173)
(5,894)
(3,179)
4,212
(1,547)
(1,032)
2,567
(35,783) 76,987
565,853 623,018
53
Annual Report 2010
STATEmEnTS Of fInAnCIAl POSITIOn

As at 31 December 2010
note
The group 2010 2009 $000 $000
The Company 2010 2009 $000 $000
ASSETS non-current assets Property, plant and equipment Investment properties Investment in subsidiaries Investment in associated companies Available-for-sale financial assets Intangible assets
10 11 12 13 14 15
43,848 181,642 91,702 1,239,779 11,116 1,568,087
45,367 164,878 72,837 1,217,708 11,116 1,511,906
381,957 2,895 455 385,307
386,641 2,895 431 389,967
Current assets Available-for-sale financial assets Inventories Trade and other receivables Tax recoverable Deposits with banks and financial institutions Cash and bank balances
14 16 17 18 18
335,082 9,275 18,597 4 87,579 23,780 474,317 2,042,404
379,715 6,090 18,538 124 64,059 22,890 491,416 2,003,322
107,442 71,017 1,085 179,544 564,851
138,204 48,502 819 187,525 577,492
Total assets lIAbIlITIES Current liabilities Trade and other payables Taxation non-current liabilities Deferred income taxation
19
(31,831) (7,388) (39,219) (53,536) (53,536) (92,755) 1,949,649
(32,172) (6,924) (39,096) (54,279) (54,279) (93,375) 1,909,947
(150,587) (198) (150,785) (150,785) 414,066
(151,964) (73) (152,037) (152,037) 425,455
20
Total liabilities nET ASSETS

Annual Report 2010
EquITY Equity attributable to equity holders of the Company Share capital Reserves non-controlling interests Total equity
21
241,355 1,700,538 1,941,893 7,756 1,949,649
239,541 1,663,259 1,902,800 7,147 1,909,947
241,355 172,711 414,066 414,066
239,541 185,914 425,455 425,455
54
COnSOlIDATED STATEmEnT Of ChAngES In EquITY

Attributable to equity holders of the Company foreign Share fair currency Share Statutory Capital option value translation Revenue capital reserve 1 reserve 2 reserve reserve reserve reserve $000 $000 $000 $000 $000 $000 $000
noncontrolling Total interests $000 $000
Total equity $000
2010 Balance at 1 January 2010 Issue of share capital Expensing of share options Dividends paid Total comprehensive (expense)/ income for the financial year
239,541
1,522 16,815
1,974 1,106,390
(4,484) 541,042 1,902,800
7,147 1,909,947
1,814
1,814
1,814
450
(39,549)
450 (39,549)
450 (39,549)
(33,069)
(2,028) 111,475
76,378
609
76,987
balance at 31 December 2010 241,355
1,522 16,815
2,424 1,073,321
(6,512) 612,968 1,941,893
7,756 1,949,649
55
Annual Report 2010
COnSOlIDATED STATEmEnT Of ChAngES In EquITY (COnTInuED)

Attributable to equity holders of the Company foreign Share fair currency Share Statutory Capital option value translation Revenue capital reserve 1 reserve 2 reserve reserve reserve reserve $000 $000 $000 $000 $000 $000 $000
noncontrolling Total interests $000 $000
Total equity $000
2009 Balance at 1 January 2009 Expensing of share options Purchase of noncontrolling interest shares in subsidiary Increase in interest of an associated company Liquidation of a subsidiary Dividends paid Total comprehensive income/ (expense) for the financial year Balance at 31 December 2009
Annual Report 2010
239,541
1,522
17,267
1,760 214
538,378
243
521,354 1,320,065 214
7,017 1,327,082 214
(505)
(505)
(505)
(452)
81 (39,491)
81 (452) (39,491)
81 (452) (39,491)
568,012
(4,727)
59,603
622,888
130
623,018
239,541
1,522
16,815
1,974 1,106,390
(4,484) 541,042 1,902,800
7,147 1,909,947
The statutory reserve is legally required to be set aside in the countries of incorporation of certain subsidiaries. Those laws restrict the distribution and use of the reserve. The capital reserve relates to non-distributable profits arising from sale of long term investments according to certain subsidiaries Articles of Association and share premium arising from issue of shares by certain subsidiaries.
56
COnSOlIDATED STATEmEnT Of CASh flOWS

note
The group 2010 2009 $000 $000
Cash flows from operating activities: Profit for the financial year, net of tax Adjustments for: Taxation Share of results of associated companies Gain on dilution of investment in an associated company (net) Gain on liquidation of a subsidiary Fair value (gains)/losses on investment properties Investment income Interest income Depreciation of property, plant and equipment Expensing of share options Property, plant and equipment written off Gain on disposal of property, plant and equipment Inventories written down Write back of unclaimed dividends Gain on disposal of available-for-sale financial assets (Write back)/allowance for impairment in value of available-for-sale financial assets Currency translation losses/(gains) Operating profit before working capital changes (Increase)/decrease in inventories (Increase)/decrease in receivables Decrease in payables Cash generated from operations Investment income received Interest income received Net taxation paid net cash provided by operating activities Cash flows from investing activities Purchase of short-term available-for-sale financial assets Proceeds from capital reduction of available-for-sale financial assets Proceeds from liquidation of available-for-sale financial assets Proceeds from disposal of available-for-sale financial assets Purchase of property, plant and equipment Dividends from associated companies Proceeds from sale of property, plant and equipment Purchase of non-controlling interests shares in subsidiary Investment in associated company Improvements to investment properties net cash provided by/(used in) investing activities
112,770 7 13 13 5 11 5 5 10 25 6 6 16 5 5 5,6 10,993 (14,999) (8,522) (15,436) (44,910) (958) 5,159 450 125 (9) 170 (160) (2,638) (464) 530 42,101 (3,355) (107) (181) 38,458 6,282 513 (6,929) 38,324
57,165 1,044 (7,590) (442) 32,866 (43,646) (1,500) 3,411 214 211 161 (125) 476 (135) 42,110 307 4,532 (844) 46,105 43,575 496 (7,624) 82,552
10
11
57
(784) 464 27,763 (4,079) 1,985 15 (1,025) 24,339
71 (13,949) 800 (505) (9,095) (347) (23,025)
Annual Report 2010
COnSOlIDATED STATEmEnT Of CASh flOWS (COnTInuED)

note
The group 2010 2009 $000 $000
Cash flows from financing activities Proceeds from issue of share capital Payment of dividends to shareholders of the Company Bank deposits pledged net cash used in financing activities net increase in cash and cash equivalents Cash and cash equivalents at beginning of the financial year Effects of currency translation on cash and cash equivalents Cash and cash equivalents at end of the financial year
21 8
1,814 (39,549) (26) (37,761) 24,902 85,458 (523) 109,837
(39,491) (1,367) (40,858) 18,669 66,961 (172) 85,458
18 18
Annual Report 2010
58
nOTES TO ThE fInAnCIAl STATEmEnTS

These notes form an integral part of and should be read in conjunction with the accompanying financial statements. 1. gEnERAl Haw Par Corporation Limited (the Company) is incorporated and domiciled in Singapore and is listed on the Singapore Exchange. The address of its registered office is as follows: 401 Commonwealth Drive #03-03 Haw Par Technocentre Singapore 149598 The Company is the owner of the Tiger trademarks and is the holding company of the Group. The principal activities of the Company are licensing of the Tiger trademarks and owning investments for long term holding purposes. The principal activities of the Group are as follows: (a) manufacturing, marketing and trading healthcare products; (b) providing leisure-related services; and (c) investing in properties and securities. 2. SIgnIfICAnT ACCOunTIng POlICIES (a) basis of preparation The financial statements have been prepared in accordance with Singapore Financial Reporting Standards (FRS). The financial statements have been prepared under the historical cost convention, except as disclosed in the accounting policies below. The preparation of financial statements in conformity with FRS requires management to exercise its judgment in the process of applying the Groups accounting policies. It also requires the use of certain critical accounting estimates and assumptions. An area involving a higher degree of judgment or complexity, or where assumptions and estimates are significant to the financial statements is disclosed in Note 3. Interpretations and amendments to published standards effective in 2010 On 1 January 2010, the Group adopted the new or amended FRS and Interpretations to FRS (INT FRS) that are mandatory for application from that date. Changes to the Groups accounting policies have been made as required, in accordance with the transitional provisions in the respective FRS and INT FRS. The following are the new or revised FRS and INT FRS that are relevant to the Groups and Companys accounting policies and adoption of these standards has no material effect on the amounts reported for the current or prior financial years except as disclosed below: FRS 27 (revised) Consolidated and Separate Financial Statements (effective for annual periods beginning on or after 1 July 2009).
59
Annual Report 2010

2.
SIgnIfICAnT ACCOunTIng POlICIES (continued) (a) basis of preparation (continued) FRS 27 (revised) requires the effects of all transactions with non-controlling interests to be recorded in equity if there is no change in control and these transactions will no longer result in goodwill or gains and losses. Losses incurred by a subsidiary are allocated to the noncontrolling interest even if the losses exceed the non-controlling interest in the subsidiarys equity. The standard also specifies the accounting when control is lost. Any remaining interest in the entity is re-measured to fair value, and gain or loss is recognised in profit or loss. Please refer to Note 2(c)(1) for the Group revised accounting policy on subsidiaries. The Group has been applying FRS 27 (revised) to transactions with non- controlling interests. FRS 103 (revised) Business Combinations (effective for annual periods beginning on or after 1 July 2009). FRS 103 (revised) continues to apply the acquisition method to business combinations, with some significant changes. For example, all payments to purchase a business are to be recorded at fair value at the acquisition date, with contingent payments classified as debt subsequently re-measured through the profit or loss. There is a choice on an acquisitionby-acquisition basis to measure the non-controlling interest in the acquiree either at fair value or at the non-controlling interests proportionate share of the acquirees net assets. All acquisition-related costs should be expensed. Please refer to Note 2(c)(1) for the Group revised accounting policy on subsidiaries. As the changes have been implemented prospectively, no adjustments were necessary to any of the amounts previously recognised in the financial statements. There were no transactions with non-controlling interests in the current financial year. Accordingly, these changes do not have any impact on the financial statements for the current financial year. (b) Revenue recognition Revenue comprises the fair value of the consideration received or receivable for the sale of goods and rendering of services, in the ordinary course of the Groups activities, net of goods and services tax, rebates and discounts, and after eliminating sales within the Group. Revenue is recognised as follows: (1) Sale of goods Revenue from sale of goods is recognised when a Group entity has transferred to the customer the significant risks and rewards of the ownership of the goods, and collectibility of the related receivables is reasonably assured. (2) Rendering of services Revenue from services is recognised upon rendering of services. (3) Interest income Interest income is recognised on a time proportion basis using the effective interest method.
60
Annual Report 2010

2.
SIgnIfICAnT ACCOunTIng POlICIES (continued) (b) Revenue recognition (continued) (4) Dividend income Dividend income from subsidiaries, associated companies and available-for-sale financial assets is recognised when the right to receive payment is established. (5) Rental income Rental income from operating leases on investment properties is recognised on a straight-line basis over the lease term. (c) group accounting (1) Subsidiaries (i) Consolidation Subsidiaries are entities over which the Group has power to govern the financial and operating policies so as to obtain benefits from its activities, generally accompanied by a shareholding giving rise to a majority of the voting rights. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the Group controls another entity. Subsidiaries are consolidated from the date on which control is transferred to the Group. They are de-consolidated from the date on which control ceases. In preparing the consolidated financial statements, transactions, balances and unrealised gains on transactions between group entities are eliminated. Unrealised losses are also eliminated but are considered an impairment indicator of the asset transferred. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group. Non-controlling interests are that part of the net results of operations and of net assets of a subsidiary attributable to the interests which are not owned directly or indirectly by the equity holders of the Company. They are shown separately in the consolidated statement of comprehensive income, statement of changes in equity and statement of financial position. Total comprehensive income is attributed to the non-controlling interests based on their respective interests in a subsidiary, even if this results in the non-controlling interests having a deficit balance. (ii) Acquisition of businesses
Annual Report 2010
The acquisition method of accounting is used to account for business combinations by the Group. The consideration transferred for the acquisition of a subsidiary comprises the fair value of the assets transferred, the liabilities incurred and the equity interests issued by the Group. The consideration transferred also includes the fair value of any contingent consideration arrangement and the fair value of any pre-existing equity interest in the subsidiary. Acquisition-related costs are expensed as incurred.
61

2.
SIgnIfICAnT ACCOunTIng POlICIES (continued) (c) group accounting (continued) (1) Subsidiaries (continued) (ii) Acquisition of businesses (continued) Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are, with limited exceptions, measured initially at their fair values at the acquisition date. On an acquisition-by-acquisition basis, the Group recognises any non-controlling interest in the acquiree at the date of acquisition either at fair value or at the non-controlling interests proportionate share of the acquirees net identifiable assets. The excess of the consideration transferred, the amount of any non-controlling interest in the acquiree and the acquisition-date fair value of any previous equity interest in the acquiree over the fair value of the net identifiable assets acquired is recorded as goodwill. Please refer to Note 2(e)(1) for the Groups accounting policy on goodwill on acquisition of subsidiaries. (iii) Disposals of subsidiaries or businesses When a change in the Companys ownership interest in a subsidiary results in a loss of control over the subsidiary, the assets and liabilities of the subsidiary including any goodwill are derecognised. Amounts recognised in other comprehensive income in respect of that entity are also reclassified to profit or loss or transferred directly to retained earnings if required by a specific Standard. Any retained interest in the entity is remeasured at fair value. The difference between the carrying amount of the retained investment at the date when control is lost and its fair value is recognised in profit or loss. (2) Transactions with non-controlling interests Changes in the Companys ownership interest in a subsidiary that do not result in a loss of control is accounted for as transactions with equity owners of the Group. Any changes in the carrying amounts of the non-controlling interest and the fair value of the consideration paid or received, if any, is brought to revenue reserve. Please refer to Note 2(g) for the Companys accounting policy on investments in subsidiaries and associated companies. (3) Associated companies Associated companies are entities over which the Group has significant influence, but not control, generally accompanying a shareholding of between and including 20% and 50% of the voting rights. Investments in associated companies are accounted for in the consolidated financial statements using the equity method of accounting. Investments in associated companies in the consolidated statement of financial position include goodwill (net of accumulated impairment loss) identified on acquisition, where applicable. Please refer to Note 2(e)(1) for the Groups accounting policy on goodwill.
62
Annual Report 2010

2.
SIgnIfICAnT ACCOunTIng POlICIES (continued) (c) group accounting (continued) (3) Associated companies (continued) Investments in associated companies are initially recognised at cost. The cost of an acquisition is measured at the fair value of the assets given, equity instruments issued or liabilities incurred or assumed at the date of exchange, plus costs directly attributable to the acquisition. Goodwill on associated companies represents the excess of the cost of acquisition of the associate over the Groups share of the fair value of the identifiable net assets of the associate and is included in the carrying amount of the investments. In applying the equity method of accounting, the Groups share of its associated companies post-acquisition results net of tax is recognised in the consolidated income statement and its share of post-acquisition other comprehensive income is recognised in other comprehensive income. These post-acquisition movements and distributions received from the associated companies are adjusted against the carrying amount of the investment. When the Groups share of losses in an associated company equals or exceeds its interest in the associated company, including any other unsecured non-current receivables, the Group does not recognise further losses, unless it has obligations or has made payments on behalf of the associated company. Unrealised gains on transactions between the Group and its associated companies are eliminated to the extent of the Groups interest in the associated companies. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Where necessary, adjustments are made to the financial statements of associated companies to ensure consistency of accounting policies with those of the Group. Gains and losses arising from partial disposals or dilutions in investments in associated companies are recognised in profit or loss. Investments in associated companies are derecognised when the Group loses significant influence. Any retained interest in the entity is remeasured at its fair value. The difference between the carrying amount of the retained investment at the date when significant influence is lost and its fair value is recognised in profit or loss. Please refer to Note 2(g) for the Companys accounting policy on investments in subsidiaries and associated companies. (d) Property, plant and equipment (1) Leasehold land and buildings Leasehold land and buildings are stated at cost less accumulated depreciation and accumulated impairment losses (Note 2(h)(2)). (2) Other property, plant and equipment
Haw Par Corporation Limited Annual Report 2010
Plant, equipment, furniture, vehicles and marine livestock are stated at cost less accumulated depreciation and accumulated impairment losses (Note 2(h)(2)).
63

2.
SIgnIfICAnT ACCOunTIng POlICIES (continued) (d) Property, plant and equipment (continued) (3) Components of costs The cost of an item of property, plant and equipment includes its purchase price and any cost that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management. The projected cost of dismantlement, removal or restoration is also included as part of the cost of property, plant and equipment if the obligation for dismantlement, removal or restoration is incurred as a consequence of acquiring or using the asset. (4) Depreciation Depreciation is calculated using a straight-line method to allocate the depreciable amounts of property, plant and equipment over their estimated useful lives as follows: Leasehold land and buildings 50 years or over the term of the lease, whichever is shorter 4 to 10 years 5 years
Plant, equipment, furniture and vehicles Marine livestock -
Construction-in-progress assets are not depreciated until they are brought to use. Fully depreciated assets are retained in the financial statements until they are no longer in use. The residual values, estimated useful lives and depreciation method of property, plant and equipment are reviewed, and adjusted as appropriate, at each statement of financial position date to ensure that the method and period of depreciation are consistent with the expected pattern of economic benefits from items of property, plant and equipment. The effects of any revision are recognised in the profit or loss for the financial year in which the changes arise. (5) Subsequent expenditure Subsequent expenditure relating to property, plant and equipment that has already been recognised is added to the carrying amount of the asset only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. All other repair and maintenance expense is recognised in the profit or loss when incurred. (6) Disposal On disposal of an item of property, plant and equipment, the difference between the net disposal proceeds and its carrying amount is recognised in the profit or loss.
64
Annual Report 2010

2.
SIgnIfICAnT ACCOunTIng POlICIES (continued) (e) Intangible assets (1) Goodwill Goodwill on acquisitions of subsidiaries on or after 1 January 2010 represents the excess of the consideration transferred, the amount of any non-controlling interest in the acquiree and the acquisition-date fair value of any previous equity interest in the acquiree over the fair value of the identifiable net assets acquired. Goodwill on acquisition of subsidiaries prior to 1 January 2010 represents the excess of the cost of an acquisition of subsidiaries or associated companies over the fair value of the Groups share of their identifiable net assets at the date of acquisition. Goodwill on subsidiaries and joint ventures is recognised separately as intangible assets and carried at cost less accumulated impairment losses. Goodwill on associated companies is included in the carrying amount of the investments. Gains and losses on the disposal of subsidiaries, joint ventures and associated companies include the carrying amount of goodwill relating to the entity sold, except for goodwill arising from acquisitions prior to 1 January 2001. Such goodwill was adjusted against retained profits in the year of acquisition and is not recognised in profit or loss on disposal. (2) Trademarks Trademarks are stated at cost less accumulated amortisation and accumulated impairment losses (Note 2(h)(2)). Amortisation is calculated using the straight line method to allocate the cost of trademarks over a period not exceeding 20 years. These have been fully amortised as at the statement of financial position date. (3) Deferred expenditure Deferred expenditure comprises technology fee paid in advance, clinical trial expenses and television advertisement production costs, which are recognised as assets as they generate future economic benefits. Technology fee expense paid in advance for the use of a third partys technology is amortised using the straight line method over the period of the contract with the third party. Clinical trial expenses incurred for product registrations are amortised using the straight line method over a 5-year period. Television advertisement production costs are amortised using the straight line method over the estimated useful life of approximately 2-3 years. The amortisation period and amortisation method of intangible assets other than goodwill are reviewed at least once at each statement of financial position date. The effects of any revision are recognised in profit or loss when the changes arise.
65
Annual Report 2010

2.
SIgnIfICAnT ACCOunTIng POlICIES (continued) (f) Investment properties Investment properties of the Group, principally comprising office and industrial buildings, are held for long-term rental yields and/or capital appreciation and are not substantially occupied by the Group. Investment properties are classified as non-current assets, initially recognised at cost and subsequently carried at fair value, determined annually by independent professional valuers. Changes in fair values are recognised in profit or loss. Investment properties are subject to renovations or improvements at regular intervals. The cost of major renovations and improvements is capitalised as additions and the carrying amounts of the replaced components are written off to profit or loss. The cost of maintenance, repairs and minor improvement is charged to profit or loss when incurred. On disposal of an investment property, the difference between the net disposal proceeds and the carrying amount is recognised in profit or loss. (g) Investments in subsidiaries and associated companies Investments in subsidiaries and associated companies are stated at cost less accumulated impairment losses (Note 2(h)(2)) in the Companys statement of financial position. On disposal of investments in subsidiaries and associated companies, the difference between net disposal proceeds and the carrying amount of the net investment is recognised in profit or loss. (h) Impairment of non-financial assets (1) Goodwill Goodwill, recognised separately as an intangible asset, is tested annually for impairment, as well as when there is any indication that the goodwill may be impaired. For the purpose of impairment testing of goodwill, goodwill is allocated to each of the Groups cash generating units (CGU) expected to benefit from synergies of the business combination. An impairment loss is recognised when the carrying amount of CGU, including the goodwill, exceeds the recoverable amount of the CGU. Recoverable amount of the CGU is the higher of the CGUs fair value less cost to sell and value-in-use.
Annual Report 2010
The total impairment loss is allocated first to reduce the carrying amount of goodwill allocated to the CGU and then to the other assets of the CGU pro-rata on the basis of the carrying amount of each asset in the CGU. An impairment loss on goodwill is recognised in profit or loss and is not reversed in a subsequent period.
66

2.
SIgnIfICAnT ACCOunTIng POlICIES (continued) (h) Impairment of non-financial assets (continued) (2) Intangible assets, Property, plant and equipment and Investments in subsidiaries and associated companies Intangible assets, property, plant and equipment and investments in subsidiaries and associated companies are reviewed for impairment whenever there is any indication that these assets may be impaired. If any such indication exists, the recoverable amount (i.e. the higher of the fair value less cost to sell and value in use) of the asset is estimated to determine the amount of impairment loss. For the purpose of impairment testing of these assets, recoverable amount is determined on an individual asset basis unless the asset does not generate cash flows that are largely independent of those from other assets. If this is the case, recoverable amount is determined for the CGU to which the asset belongs to. If the recoverable amount of the asset (or CGU) is estimated to be less than its carrying amount, the carrying amount of the asset (or CGU) is reduced to its recoverable amount. The impairment loss is recognised in profit or loss. An impairment loss for an asset other than goodwill is reversed if, and only if, there has been a change in the estimates used to determine the assets recoverable amount since the last impairment loss was recognised. The carrying amount of an asset other than goodwill is increased to its revised recoverable amount, provided that this amount does not exceed the carrying amount that would have been determined (net of accumulated amortisation or depreciation) had no impairment loss been recognised for the asset in prior years. A reversal of impairment loss for an asset other than goodwill is recognised in profit or loss. (i) financial assets (1) Classification The Group classifies its investments in financial assets in the following categories: loans and receivables, available-for-sale and at fair value through profit or loss. The classification depends on the purpose for which the assets have been acquired. Management determines the classification of its financial assets at initial recognition.
Annual Report 2010
Investments in convertible bonds are analysed into its non-derivative host contract debt securities and its embedded derivative. The non-derivative host contract is accounted for as financial assets, available-for-sale and its embedded derivative is accounted for as financial assets at fair value through profit or loss.
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2.
SIgnIfICAnT ACCOunTIng POlICIES (continued) (i) financial assets (continued) (1) Classification (continued) (i) Loans and receivables Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are included in current assets, except those maturing later than 12 months after the statement of financial position date which are classified as non-current assets. Loans and receivables are classified within Trade and other receivables on the statements of financial position. (ii) Financial assets, available-for-sale Financial assets, available-for-sale are non-derivatives that are either designated in this category or not classified in any of the other categories. (iii) Financial assets at fair value through profit or loss Financial assets at fair value through profit or loss are financial assets held for trading. A financial asset is classified in this category if acquired principally for the purpose of selling in the short term. Derivatives are also classified as held for trading unless they are designated as hedges. Assets in this category are presented as current assets if they are either held for trading or are expected to be realised within 12 months after the statement of financial position date. (2) Recognition and derecognition Purchases and sales of financial assets are recognised on trade-date - the date on which the Group commits to purchase or sell the asset. Financial assets are derecognised when the rights to receive cash flows from the financial assets have expired or have been transferred and the Group has transferred substantially all risks and rewards of ownership. On disposal of a financial asset, the difference between the net sale proceeds and its carrying amount is recognised in profit or loss. Any amount in the fair value reserve relating to that asset is reclassfied in profit or loss. (3) Initial measurement Financial assets are initially recognised at fair value plus transaction costs except for financial assets at fair value through profit or loss, which are recognised at fair value. Transaction costs for financial assets at fair value through profit or loss are recognised immediately as expenses. (4) Subsequent measurement Financial assets, both available-for-sale and financial assets at fair value through profit or loss are subsequently carried at fair value. Loans and receivables are subsequently carried at amortised cost using the effective interest method.
68
Annual Report 2010

2.
SIgnIfICAnT ACCOunTIng POlICIES (continued) (i) financial assets (continued) (4) Subsequent measurement (continued) Changes in fair values of available-for-sale equity securities (i.e. non-monetary items) denominated in foreign currencies are recognised in the fair value reserve, together with the related currency translation differences. Dividend income on available-for-sale equity securities is recognised separately in profit or loss. For investments in the non-derivative host contract of the convertible bonds, interest is calculated using the effective interest method and is recognised in profit or loss as interest income. Changes in the fair value of these non-derivative host contracts are recognised in the fair value reserve. Changes in the fair value of financial assets at fair value through profit or loss are recognised in profit or loss when the changes arise. (5) Impairment The Group assesses at each statement of financial position date whether there is objective evidence that a financial asset or a group of financial assets is impaired and recognises an allowance for impairment when such evidence exists. (i) Loans and receivables Significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy, and default or significant delay in payments are objective evidence that these financial assets are impaired. The carrying amount of these assets is reduced through the use of an impairment allowance account which is calculated as the difference between the carrying amount and the present value of estimated future cash flows, discounted at the original effective interest rate. When the asset becomes uncollectible, it is written off against the allowance account. Subsequent recoveries of amounts previously written off are recognised against the same line item in profit or loss. The allowance for impairment loss account is reduced through profit or loss in a subsequent period when the amount of impairment loss decreases and the related decrease can be objectively measured. The carrying amount of the asset previously impaired is increased to the extent that the new carrying amount does not exceed the amortised cost had no impairment been recognised in prior periods. (ii) Financial assets, available-for-sale In addition to the objective evidence of impairment described in Note 2(i)(5)(i), a significant or prolonged decline in the fair value of an equity security below its cost is considered as an indicator that the available-for-sale financial asset is impaired. If any evidence of impairment exists, the cumulative loss that was recognised in the fair value reserve is reclassified to profit or loss. The cumulative loss is measured as the difference between the acquisition cost (net of any principal repayments and amortisation) and the current fair value, less any impairment loss previously recognised as an expense. The impairment losses recognised as an expense on equity securities are not reversed through profit or loss.
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Annual Report 2010

2.
SIgnIfICAnT ACCOunTIng POlICIES (continued) (j) Inventories Inventories are carried at the lower of cost and net realisable value. Cost is determined on a weighted average basis. The cost of finished goods and work-in-progress comprises raw materials, direct labour, other direct costs and related production overheads (based on normal operating capacity) but exclude borrowing costs. Net realisable value is the estimated selling price in the ordinary course of business, less applicable variable selling expenses. (k) Operating leases (1) When a group company is the lessee: Leases of property, plant and equipment where a significant portion of the risks and rewards of ownership is retained by the lessor are classified as operating leases. Payments made under operating leases (net of any incentives received from the lessor) are recognised in profit or loss on a straight-line basis over the period of the lease. When an operating lease is terminated before the lease period has expired, any payment required to be made to the lessor by way of penalty is recognised as an expense in the period in which termination takes place. (2) When a group company is the lessor: Leases of investment properties to third parties where the Group assumes substantially all risks and rewards incidental to ownership of the leased assets are classified as operating leases. Rental income (net of any incentives given to lessees) is recognised in the consolidated income statement on a straight-line basis over the lease term. When an operating lease is terminated before the lease period has expired, any payment required to be made by the lessee by way of penalty is recognised as an income in the period in which termination takes place. (l) Trade and other payables Trade and other payables are initially measured at fair value, and subsequently measured at amortised cost, using the effective interest method. (m) Income taxes
Annual Report 2010
Current income tax liabilities (and assets) for current and prior periods are recognised at the amounts expected to be paid to (or recovered from) the tax authorities, using the tax rates (and tax laws) that have been enacted or substantially enacted by the statement of financial position date. Deferred income tax assets/liabilities are recognised for all deductible/taxable temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements except when the deferred income tax assets/liabilities arise from the initial recognition of goodwill or an asset or liability in a transaction that is not a business combination and at the time of the transaction, affects neither accounting nor taxable profit or loss.
70

2.
SIgnIfICAnT ACCOunTIng POlICIES (continued) (m) Income taxes (continued) Deferred income tax liability is recognised on temporary differences arising on investments in subsidiaries and associated companies, except where the timing of the reversal of the temporary difference can be controlled and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred income tax asset is recognised to the extent that it is probable that future taxable profit will be available against which the deductible temporary differences and tax losses can be utilised. Deferred income tax is measured: (i) at the tax rates that are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted by the statement of financial position date; and based on the tax consequence that would follow from the manner in which the Group expects, at the statement of financial position date, to recover or settle the carrying amounts of its assets and liabilities.
(ii)
Current and deferred income taxes are recognised as income or expenses in profit or loss for the period, except to the extent that the tax arises from a business combination or a transaction, which is recognised directly in equity. Deferred tax arising from a business combination is adjusted against goodwill on acquisition. (n) Employee benefits (1) Defined contribution plans Defined contribution plans are post-employment benefit plans under which the Group pays fixed contributions into separate entities such as Central Provident Fund on a mandatory, contractual or voluntary basis. The Group has no further payment obligations once the contributions have been paid. The Groups contribution are recognised as employee expense when they are due, unless they can be capitalised as an asset. (2) Share-based compensation The Group operates an equity-settled, share-based compensation plan. The fair value of the employee services received in exchange for the grant of the options is recognised as an expense in profit or loss with a corresponding increase in share option reserve within equity over the vesting period. The total amount to be recognised over the vesting period is determined by reference to the fair value of the options granted on the date of grant. Non-market vesting conditions are included in the estimation of the number of shares under options that are expected to become exercisable on vesting date. At each statement of financial position date, the Group revises its estimates of the number of shares under options that are expected to become exercisable on vesting date and recognises the impact of the revision of estimates in profit or loss, with a corresponding adjustment to the share option reserve over the remaining vesting period.
Annual Report 2010
71

2.
SIgnIfICAnT ACCOunTIng POlICIES (continued) (o) Derivative financial instruments and hedging activities A derivative financial instrument is initially recognised at its fair value on the date the contract is entered into and is subsequently carried at its fair value. The method of recognising the resulting gain or loss depends on whether the derivative is designated as a hedging instrument, and if so, the nature of the item being hedged. The Group documents at the inception of the transaction the relationship between the hedging instruments and hedged items, as well as its risk management objective and strategies for undertaking various hedge transactions. The Group also documents its assessment, both at hedge inception and on an ongoing basis, on whether the derivatives designated as hedging instruments are highly effective in offsetting changes in fair value or cash flows of the hedged items. The Group enters into currency forwards that qualify as cash flow hedges against highly probable forecasted transactions in foreign currencies. The fair value changes on the effective portion of the currency forwards designated as cash flow hedges are recognised in the hedging reserve and transferred to profit or loss when the hedged forecasted transactions affects profit or loss. When the forecasted transaction is no longer expected to occur, the gains and losses that were previously recognised in the hedging reserve are transferred to profit or loss immediately. Fair value in changes on derivatives that are not designated or do not qualify for hedge accounting are recognised in profit or loss when the changes arise. (p) fair value estimation The carrying amounts of current financial assets and liabilities, carried at amortised cost, are assumed to approximate their fair values. The fair values of financial instruments traded in active markets (such as exchange-traded and over-the-counter securities and derivatives) are based on quoted market prices obtained from stock exchange at the statement of financial position date. The quoted market prices used for financial assets held by the Group are the current bid prices; the appropriate quoted market prices for financial liabilities are the current asking prices. The fair values of financial instruments that are not traded in an active market are determined by using valuation techniques. The Group uses a variety of methods such as estimated discounted cash flow analyses. The fair values of currency forwards are determined using actively quoted forward exchange rates provided by reputable financial institutions.
72
Annual Report 2010

2.
SIgnIfICAnT ACCOunTIng POlICIES (continued) (q) Currency translation (1) Functional and presentation currency Items included in the financial statements of each entity in the Group are measured using the currency of the primary economic environment in which the entity operates (the functional currency). The consolidated financial statements of the Group are presented in Singapore Dollar, which is the Companys functional currency. (2) Transactions and balances Transactions in a currency other than the functional currency (foreign currency) are translated into the functional currency using the exchange rates prevailing at the dates of transactions. Currency translation gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies at the closing rates at the statement of financial position date are recognised in the profit or loss, except for currency translation differences on the net investment in foreign operations, borrowings in foreign currencies and other currency instruments designated and qualifying as net investment hedges for foreign operations, which are included in the foreign currency translation reserve within equity in the consolidated financial statements and transferred to profit or loss of the gain or loss on disposal of the foreign operation. Non-monetary items that are measured at fair values in foreign currencies are translated using the exchange rates at the date when the fair values are determined. Currency translation differences on non-monetary items whereby gains or losses are recognised directly in equity, such as equity investments classified as available-for-sale financial assets are included in the fair value reserve. (3) Translation of Group entities financial statements The results and financial position of Group entities (none of which has the currency of a hyperinflationary economy) that are in functional currencies different from the presentation currency are translated into the presentation currency as follows: (i) (ii) Assets and liabilities are translated at the closing rates at the date of the statement of financial position; Income and expenses are translated at average exchange rates (unless this average is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case, income and expenses are translated at the dates of the transactions); and All resulting exchange differences are recognised in other comprehensive income and accumulated in currency translation reserve within equity.
(iii)
73
Goodwill and fair value adjustments arising from the acquisition of a foreign entity on or after 1 January 2005 are treated as assets and liabilities of the foreign entity and translated at the closing rates at the date of the statement of financial position. For acquisitions prior to 1 January 2005, the exchange rates at the dates of the acquisition are used.
Annual Report 2010

2.
SIgnIfICAnT ACCOunTIng POlICIES (continued) (r) Segment reporting Operating segments are reported in a manner consistent with the internal reporting provided to the executive committee whose members are responsible for allocating resources and assessing performance of the operating segments. (s) Cash and cash equivalents Cash and cash equivalents include cash and bank balances, deposits with financial institutions and bank overdrafts, if any. (t) Share capital Ordinary shares are classified as equity. Incremental costs directly attributable to the issuance of new ordinary shares are deducted against the share capital account. When the Companys ordinary shares are repurchased, the weighted average cost of each share is written off against the share capital, with the remaining amounts written off against the retained earnings of the Company. (u) Dividends Interim dividends are recorded during 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. (v) government grants Grants from the government are recognised as a receivable at their fair value when there is reasonable assurance that the grant will be received and the Group will comply with all the attached conditions. Government grants receivable are recognised as income over the periods necessary to match them with the related costs which they are intended to compensate on a systematic basis. Government grants relating to expenses are shown separately as other income. (w) financial guarantees The Company had issued corporate guarantees to banks for credit facilities of its subsidiaries. These guarantees are financial guarantee contracts as they require the Company to reimburse the banks if the subsidiaries fail to make principal or interest payments when due in accordance with terms of their credit facilities.
Annual Report 2010
Financial guarantee contracts are initially recognised at their fair values plus transaction costs in the Companys statement of financial position. Financial guarantee contracts are subsequently amortised to profit or loss over the period of the subsidiaries borrowings, unless it is probable that the Company will reimburse the bank for an amount higher than the unamortised amount. In this case, the financial guarantee contracts shall be carried at the expected amount payable to the bank in the Companys statement of financial position. Intragroup transactions are eliminated on consolidation.
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3.
CRITICAl ACCOunTIng ESTImATES AnD juDgmEnTS Estimates, assumptions and judgments are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal to the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below. Impairment of goodwill and property, plant and equipment The Group tests annually whether goodwill and property, plant and equipment have suffered any impairment, in accordance with the accounting policy stated in Note 2(h)(1) and Note 2(h)(2) respectively. The recoverable amounts of these assets and where applicable, cash-generating units, have been determined based on value-in-use calculations. These calculations require the use of estimates. Based on the positive recoverable amount that exceeded the carrying amount of goodwill and property, plant and equipment, there is no impairment. As the estimates and assumptions used are reasonably conservative, it will require a significant variation to the estimates and assumptions to result in any impairment adjustments. Please refer to Note 15(a) for details on goodwill impairment tests.
4.
REVEnuE Revenue of the Group represents invoiced sales and services, and rental income but excludes dividend income, interest income and intra-group transactions. The group 2010 2009 $000 $000 Sale of goods Rendering of services Rental income 87,524 26,325 15,912 129,761 81,376 25,326 17,289 123,991
75
Annual Report 2010

5.
OThER InCOmE The group 2010 2009 $000 $000 Investment income from gross dividends from quoted equity investments Gain on liquidation of a subsidiary Write back of allowance for impairment in value of available-for-sale financial assets Gain on disposal of available-for-sale financial assets Capital distribution of available-for-sale financial assets Write back of unclaimed dividends Interest income from: Deposits Available-for-sale financial assets Service, licence and rental fee Government grant - Jobs Credit Scheme Miscellaneous income
44,910 464 2,638 160 381 577 964 148 582 50,824
43,575 442 71 125 375 1,125 1,007 805 467 47,992
The Jobs Credit Scheme is a cash grant introduced in the Singapore Budget 2009 to help businesses preserve jobs in the economic downturn. The amount an employer can receive would depend on the fulfilment of the conditions as stated in the scheme. The scheme ended during the financial year. 6. nATuRE Of ExPEnSES The group 2010 2009 $000 $000 Purchase of inventories Changes in inventories Sales and marketing expenses Employee benefits (Note 25(a)) Trademark expenses Depreciation of property, plant and equipment (Note 10) Auditors' remuneration: Auditor of the Company: - audit fees - non-audit fees - under provision of audit fees in respect of prior year Other auditors: - audit fees - non-audit fees Foreign exchange loss, net Inventories written down Property, plant and equipment written off Gain on disposal of property, plant and equipment Allowance for impairment in value of available-for-sale financial assets 32,464 (3,185) 20,626 19,519 634 5,159 27,712 468 19,415 18,731 412 3,411
Annual Report 2010
385 4 15 22 5 455 170 125 (9)
355 20 17 16 280 161 211 476
76

7.
TAxATIOn The group 2010 2009 $000 $000 Tax expense attributable to profit is made up of: Current taxation Current year: Singapore Overseas Under/(over) provision in respect of previous years: Singapore Overseas Deferred taxation Origination and reversal of temporary differences: Singapore Overseas Under/(over) provision in respect of previous years: Singapore Overseas
5,762 1,494 7,256 290 2 292
5,529 1,378 6,907 (68) 80 12
2,628 205 2,833 599 13 612 10,993
(6,226) 368 (5,858) (17) (17) 1,044
The tax expense on accounting profit differs from the amount that would arise using the Singapore standard rate of income tax due to the following: 2010 2009 $000 $000 Profit before taxation Share of profit of associated companies, net of tax/gain on dilution of investment in an associated company (net) Profit before taxation and share of profit of associated companies /gain on dilution of investment in an associated company (net) Taxation at applicable Singapore tax rate of 17% (2009: 17%) Adjustments: Change in tax rate Tax rate difference in subsidiaries Tax effect of expenses not deductible for tax purposes Tax effect of income not subject to tax Tax rebates and exemptions Utilisation of tax losses not recognised in previous years Deferred income tax asset not recognised Originating/reversal of previous years temporary differences Under/(over) provision in respect of previous years Other Taxation expense 123,763 (23,521) 100,242 17,041 3 289 995 (7,856) (200) (800) 557 43 904 17 10,993 58,209
Annual Report 2010
(7,590) 50,619 8,605 (786) 322 664 (7,789) (157) (80) 369 (74) (14) (16) 1,044
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7.
TAxATIOn (continued) There is no tax charge/credit relating to the component of other comprehensive income except for fair value gains/(losses) on available-for-sale financial assets for which the deferred tax relating to it is disclosed in Note 20 to the financial statements.
8.
DIVIDEnDS PAID The group 2010 2009 $000 $000 Ordinary dividends paid: Final exempt 2009 dividend of 14 cents per share (2009: Final 2008 dividend of 14 cents per share) Interim exempt 2010 dividend of 6 cents per share (2009: 6 cents per share) The Company 2010 2009 $000 $000
27,684
27,644
27,684
27,644
11,865 39,549 20.0 cents
11,847 39,491
11,865 39,549
11,847 39,491 20.0 cents
Dividend per share (net of tax)
20.0 cents 20.0 cents
The Directors recommend a final tax exempt one-tier dividend of 14 cents per share, amounting to approximately $27.7 million to be paid for the financial year ended 31 December 2010 (2009: 14 cents per share amounting to approximately $27.6 million). These financial statements do not reflect this dividend, which will be accounted for in the shareholders equity as an appropriation of revenue reserve in the financial year ending 31 December 2011. 9. EARnIngS PER ShARE The group 2010 2009 $000 $000 Earnings for the financial year 112,507 '000
Annual Report 2010
57,036 '000 197,455 68
Weighted average number of ordinary shares for calculation of basic earnings per share Dilution adjustment for share options Adjusted weighted average number of shares for calculation of diluted earnings per share Earnings per share attributable to equity holders of the Company Basic Diluted
197,710 64
197,774
197,523
78

9.
EARnIngS PER ShARE (continued) Basic earnings per share is calculated by dividing the profit for the financial year, net of tax, by the weighted average number of ordinary shares in issue during the financial year. The diluted earnings per share is adjusted for the effects of all dilutive potential ordinary shares. The Company has one category of dilutive potential ordinary shares which is share options. A calculation is carried out to determine the number of shares that could have been issued at fair value (determined as the average annual market share price of the Companys shares) based on the monetary value of the subscription rights attached to outstanding share options. The number of shares calculated is compared with the number of shares that would have been issued assuming the exercise of the share options. The difference is added to the denominator as an issuance of ordinary shares for no consideration. No adjustment is made to earnings (numerator).
10. PROPERTY, PlAnT AnD EquIPmEnT leasehold land and buildings $000 The Group Cost At 1 January 2010 Additions Disposals/write-offs Currency translation differences At 31 December 2010 Accumulated depreciation At 1 January 2010 Charge for 2010 Disposals/write-offs Currency translation differences At 31 December 2010 Net book value At 31 December 2010 Plant, equipment, furniture and vehicles $000 Constructioninprogress $000
marine livestock $000
Total $000
43,492 150 (18) 57 43,681
48,989 1,624 (385) (176) 50,052
1,104 183 (121) (7) 1,159
2,122 (5) 2,117
93,585 4,079 (524) (131) 97,009
17,034 1,785 (8) 162 18,973
30,541 3,250 (347) 14 33,458
643 124 (38) 1 730
48,218 5,159 (393) 177 53,161

Annual Report 2010
24,708
16,594
429
2,117
43,848
79

10. PROPERTY, PlAnT AnD EquIPmEnT (continued) Plant, equipment, furniture and vehicles $000
leasehold land and buildings $000 The Group (continued) Cost At 1 January 2009 Additions Disposals/write-offs Transfers Currency translation differences At 31 December 2009 Accumulated depreciation At 1 January 2009 Charge for 2009 Disposals/write-offs Currency translation differences At 31 December 2009 Net book value At 31 December 2009
Constructionmarine inlivestock progress $000 $000
Total $000
30,914 4,091 (1,378) 9,865 43,492
36,814 284 (1,251) 13,191 (49) 48,989
749 98 (61) 318 1,104
14,203 9,476 (23,374) (305)
82,680 13,949 (2,690) (354) 93,585
16,858 1,426 (1,241) (9) 17,034
29,892 1,904 (1,214) (41) 30,541
589 81 (24) (3) 643
47,339 3,411 (2,479) (53) 48,218
26,458
18,448
461
45,367
Included in leasehold land and buildings is land use rights amounting to $1,008,000 (2009: $1,049,000). 11. InVESTmEnT PROPERTIES The group 2010 2009 $000 $000 At beginning of the financial year Improvements Fair value gains/(losses) on investment properties recognised in profit or loss Currency translation differences At end of the financial year At valuation: Freehold and 999-year leasehold properties Leasehold properties 164,878 1,025 15,436 303 181,642 197,826 347 (32,866) (429) 164,878
Annual Report 2010
80
30,142 151,500
28,278 136,600

11. InVESTmEnT PROPERTIES (continued) All investment properties of the Group are based on open market valuations carried out by independent professional valuers annually at statement of financial position date based on the properties highestand-best-use using the Direct Market Comparison Method. Investment properties are mainly leased to third parties under operating leases (Note 24(b)). Certain investment properties valued at approximately $151,500,000 (2009: $136,600,000) are pledged to the banks as security for bank credit facilities. Fair value changes of investment properties amounting to gains of approximately $15,436,000 (2009: losses of $32,866,000) (before deferred taxation) are non-cash in nature. The following amounts are recognised in profit or loss: The group 2010 2009 $000 $000 Rental income (Note 4) Direct operating expenses arising from investment properties that generated rental income The details of the Group's investment properties are as follows: Tenure of land Independent valuer DTZ Debenham Tie Leung (SEA) Pte Ltd Valuation date 31 December 2010 15,912 (4,785) 17,289 (4,388)
Investment properties Haw Par Glass Tower 178 Clemenceau Avenue Singapore 239926
Description
8-storey office 99-year lease building on a land from 2 June area of 899 square 1970 metres. The lettable area is 3,316 square metres. 6-storey office building on a land area of 2,464 square metres. The lettable area is 10,251 square metres. 7-storey industrial building on a land area of 8,131 square metres. The lettable area is 15,700 square metres. 99-year lease from 1 September 1952
81
Haw Par Technocentre 401 Commonwealth Drive Singapore 149598
99-year lease from 1 March 1963
DTZ Debenham Tie Leung (SEA) Pte Ltd
31 December 2010
Annual Report 2010
Haw Par Centre 180 Clemenceau Avenue Singapore 239922
DTZ Debenham Tie Leung (SEA) Pte Ltd
31 December 2010

11. InVESTmEnT PROPERTIES (continued) Investment properties Menara Haw Par Lot 242, Jalan Sultan Ismail, 50250 Kuala Lumpur Malaysia Description 32-storey office building on a land area of 2,321 square metres. The lettable area is 16,180 square metres. 3 units of office/ industrial space with a lettable area of 475 square metres. Tenure of land Freehold Independent valuer DTZ Nawawi Tie Leung Property Consultants Sdn Bhd Valuation date 31 December 2010
Westlands Centre Units 1405-1407 Westlands Centre 20 Westlands Road Quarry Bay Hong Kong
999-year lease
DTZ Debenham Tie Leung Limited
31 December 2010
12. InVESTmEnT In SubSIDIARIES The Company 2010 2009 $000 $000 Equity investments at cost: Unquoted, at written down cost Allowance for impairment in value
421,095 (39,138) 381,957
426,786 (40,145) 386,641
Details of significant subsidiaries are shown in Note 29. The Company 2010 2009 $000 $000 Equity investments at cost: Beginning of financial year Liquidation of a subsidiary End of financial year
82
Annual Report 2010
426,786 (5,691) 421,095
429,718 (2,932) 426,786

13. InVESTmEnT In ASSOCIATED COmPAnIES The group 2010 2009 $000 $000 Equity Investment at cost Balance at beginning of financial year Increase in investment Share of profits Dividends received/receivable Gain on dilution (net) Share of translation reserves Share of other comprehensive (expense)/income Currency translation differences Balance at end of financial year The summarised Groups share of financial information of associated companies are as follows: Assets Liabilities Revenues Net profit Share of associated companies contingent liabilities incurred jointly with other investors Contingent liabilities relating to liabilities of associates for which the Group is severally liable 72,837 14,999 (2,009) 8,522 4,212 (1,032) (5,827) 91,702 59,359 9,095 7,590 (2,185) 81 (1,547) 2,567 (2,123) 72,837 The Company 2010 2009 $000 $000 2,895 2,895
106,521 (11,768) 74,821 15,245
99,706 (16,403) 67,737 7,590
Investments in associated companies at 31 December 2010 include intangible assets valued at $2,207,000 (2009: $3,201,000). Associated companies comprise UIC Technologies Pte Ltd and Hua Han Bio-Pharmaceutical Holdings Limited and details of which are set out in Note 29. Note 29(iv) explains the basis of equity accounting for an associated company, which has a different financial year end.
83
Annual Report 2010
Fair value of investment in a Hong Kong Stock Exchange listed associate, which has a cost denominated in Hong Kong dollars with a Singapore-dollars equivalent of $43,267,000 (2009: $43,267,000), is $123,047,942 (2009: $95,569,329). This is based on its quoted bid price as at 31 December 2010 and the exchange rate of $1=HK$5.92 (2009: $1=HK$5.52).

14. AVAIlAblE-fOR-SAlE fInAnCIAl ASSETS The group 2010 2009 $000 $000 Balance at beginning of financial year Additions Fair value (losses)/gains recognised in other comprehensive income Amortisation of discount Disposals Allowance for impairment in value Currency translation differences Balance at end of financial year Less: Non-current portion Current portion 1,597,423 39,412 1,009,881 The Company 2010 2009 $000 $000 431 24 455 (455) 828 73 (470) 431 (431)
(35,014) 587,049 486 1,026 (27,309) (476) (137) (57) 1,574,861 1,597,423 (1,239,779) (1,217,708) 335,082 379,715
Available-for-sale financial assets are analysed as follows: The group 2010 2009 $000 $000 Quoted investments Equity securities Debt securities Unquoted investments The Company 2010 2009 $000 $000
1,574,297 564 1,574,861
1,571,063 25,819 541 1,597,423
455 455
431 431
The quoted investments are mainly listed in Singapore. During the financial year, approximately $38,628,000 (2009: $Nil) of additions were non-cash and obtained in lieu of dividends. Certain available-for-sale financial assets valued at $153,358,000 (2009: $127,593,000) are pledged as security for bank credit facilities.
Annual Report 2010
15. InTAngIblE ASSETS The group 2010 2009 $000 $000 Goodwill on consolidation Trademarks and deferred expenditure 11,116 11,116 11,116 11,116 The Company 2010 2009 $000 $000
84

15. InTAngIblE ASSETS (continued) (a) Goodwill on consolidation The group 2010 2009 $000 $000 Cost Balance at beginning and end of financial year Impairment tests for goodwill The goodwill is allocated to the healthcare division of the Group, which is regarded as a cashgenerating unit (CGU). During the financial year, the Group has determined that there is no impairment of its CGU containing the goodwill. The recoverable amount (i.e. higher of value-in-use and fair value less costs to sell) of the CGU is determined on the basis of value-in-use calculations. These calculations incorporate cash flow projections by management covering a twenty-year period. Key assumptions used for value-in-use calculations: Discount rate Growth rate 9.40% (2009: 9.57%) 0.00% (2009: 0.00%)
11,116
11,116
These assumptions have been used for the analysis of the CGU. The discount rate used is post-tax and reflects specific risks relating to the healthcare division. Management has determined a 0% growth rate on grounds of prudence. (b) Trademarks and deferred expenditure Deferred Trademarks expenditure $000 $000 The Group Net book value 2010 Beginning and end of financial year 2009 Beginning and end of financial year At 31 December 2010 & 2009: Cost Less: Accumulated amortisation Net book value
Annual Report 2010
3,200 (3,200)
1,400 (1,400)
85

15. InTAngIblE ASSETS (continued) (b) Trademarks and deferred expenditure (continued) Trademarks $000 The Company Balance at 1 January and 31 December 2010, net of accumulated amortisation At 31 December 2010: Cost Less: Accumulated amortisation Net book value
2,000 (2,000)
The Company and its wholly-owned subsidiary, Haw Par Brothers International (HK) Ltd (HPBIHK) own the Tiger (Cost: $2.0 million) and Kwan Loong (Double Lion) (Cost: HK$5.58 million) trademarks respectively. The Company and HPBIHK (together the Licensors), licensed to Haw Par Healthcare Limited (HPH), another wholly-owned subsidiary, the exclusive right to manufacture, distribute, market and sell Tiger and Kwan Loong products worldwide until 31 December 2012. These licensing arrangements are renewable upon expiry for a further period of 25 years on terms to be mutually agreed between the Licensors and HPH. 16. InVEnTORIES The group 2010 2009 $000 $000 Trading stocks Manufacturing stocks Finished stocks Total 734 6,627 1,914 9,275 301 4,238 1,551 6,090
Annual Report 2010
The cost of inventories recognised as expense and included in Cost of sales amounted to $37,695,000 (2009: $36,339,000). During the financial year, the Group recognised inventories written down of $170,000 (2009: $161,000). The inventories written off have been included in "Cost of sales" in profit or loss.
86

17. TRADE AnD OThER RECEIVAblES The group 2010 2009 $000 $000 Trade receivables Less: Allowance for impairment of receivables Trade receivables (net) Advances to subsidiaries Other receivables (Note (i)) 13,858 (70) 13,788 4,809 4,809 18,597 14,482 (68) 14,414 4,124 4,124 18,538 The Company 2010 2009 $000 $000 1,544 1,544 105,823 75 105,898 107,442 1,529 1,529 136,599 76 136,675 138,204
Total
Advances to subsidiaries are non-trade, unsecured, interest-free (2009: interest-free) and are repayable on demand. The carrying values of the advances approximate their fair values. (i) Other receivables: The group 2010 2009 $000 $000 Sundry receivables and deposits Dividends receivable Interest receivable on deposits 3,372 1,409 28 4,809 2,648 1,408 68 4,124 The Company 2010 2009 $000 $000 75 75 76 76
The carrying amounts of sundry, dividends and interest receivables and deposits approximate their fair values. 18. CASh AnD CASh EquIVAlEnTS The group 2010 2009 $000 $000 Short term bank deposits Cash at bank and on hand 87,579 23,780 111,359 64,059 22,890 86,949 The Company 2010 2009 $000 $000 71,017 1,085 72,102 48,502 819 49,321
Annual Report 2010
The carrying amounts of cash and cash equivalents approximate their fair values.
Included in the cash and cash equivalents are bank deposits and cash on hand amounting to $12,150,000 (2009: $14,644,000) which are not freely remittable for use by the Group because of currency exchange restrictions.
87

18. CASh AnD CASh EquIVAlEnTS (continued) Cash and cash equivalents included in the consolidated statement of cash flows comprise the following: The group 2010 2009 $000 $000 Cash and bank balances Deposits with banks and financial institutions Less: Bank deposits pledged for banking facilities Cash and cash equivalents per consolidated statement of cash flows 19. TRADE AnD OThER PAYAblES The group 2010 2009 $000 $000 Trade creditors Bills payable (trade) Accrued advertisement and promotion expenses Accrued repairs and maintenance Sundry accruals Other creditors Rental deposits Unclaimed dividends Advances from subsidiaries 6,557 65 10,928 321 5,328 2,787 4,664 1,181 31,831 4,953 22 10,705 849 6,357 3,769 4,388 1,129 32,172 The Company 2010 2009 $000 $000 955 200 1,163 148,269 150,587 699 190 1,110 149,965 151,964 23,780 87,579 (1,522) 109,837 22,890 64,059 (1,491) 85,458
The carrying values of trade creditors and advances approximate their fair values. Advances from subsidiaries are non-trade, unsecured, interest free and are repayable on demand.
88
Annual Report 2010

20. DEfERRED InCOmE TAxATIOn Deferred income tax assets and liabilities are offset when there is a legally enforceable right to set off current income tax assets against current income tax liabilities and when the deferred income taxes relate to the same fiscal authority. The amounts, determined after appropriate offsetting, are shown on the statements of financial position as follows: The group 2010 2009 $000 $000 Deferred income tax assets to be recovered within 12 months to be recovered after more than 12 months The Company 2010 2009 $000 $000
(540) (288) (828)
(529) (337) (866)
Deferred income tax liabilities to be settled within 12 months to be settled after more than 12 months
240 54,124 54,364 53,536
117 55,028 55,145 54,279
The movements in the deferred income tax account are as follows: The group 2010 2009 $000 $000 At beginning of financial year Tax (credited)/charged to fair value reserve: changes in fair value change in tax rate Tax charged/(credited) to consolidated income statement: changes in fair value change in tax rate others Currency translation differences At end of financial year 54,279 (4,118) 41,134 20,566 (1,529) The Company 2010 2009 $000 $000
2,592 2 851 (70) 53,536
(5,659) (786) 570 (17) 54,279
89
Annual Report 2010

20. DEfERRED InCOmE TAxATIOn (continued) 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 has unrecognised deferred income tax assets arising from tax losses of $25.3 million (2009: $28.9 million). These tax losses can be carried forward and used to offset against future taxable income subject to meeting certain statutory requirements by those corporations in their respective countries of incorporation. These tax losses have no expiry date. The Groups and Companys deferred tax liabilities have been computed based on the corporate tax rate and tax laws prevailing at statement of financial position date. The Group The movements in the deferred income tax assets and liabilities (prior to offsetting of balances within the same tax jurisdiction) during the financial year are as follows: Deferred income tax liabilities
fair value changes on current availablefair value -for-sale Accelerated changes on financial tax investment assets depreciation properties $000 $000 $000
Total $000
2010 Beginning of financial year (Credited)/charged to equity changes in fair value Charged/(credited) to profit or loss changes in fair value others Currency translation differences End of financial year 2009 Beginning of financial year Charged/(credited) to equity changes in fair value change in tax rate (Credited)/charged to profit or loss changes in fair value change in tax rate others Currency translation differences End of financial year
Annual Report 2010
46,553 (4,118) 42,435
1,143 789 (2) 1,930
7,449 2,592 (42) 9,999
55,145 (4,118) 2,592 789 (44) 54,364
27,516 20,566 (1,529) 46,553
714 (35) 467 (3) 1,143
13,876 (5,659) (752) (16) 7,449
42,106 20,566 (1,529) (5,659) (787) 467 (19) 55,145
90

20. DEfERRED InCOmE TAxATIOn (continued) The Group (continued) Deferred income tax assets Payables $000 2010 Beginning of financial year Charged/(credited) to profit or loss Change in tax rate Others Currency translation differences End of financial year 2009 Beginning of financial year Charged to profit or loss Change in tax rate Others Currency translation differences End of financial year 21. ShARE CAPITAl number of shares 000 The Group and the Company 2010 Beginning of financial year Issue 425,000 ordinary shares by virtue of exercise of share options (Note 25(c)) End of financial year Amount $000 Tax losses $000 Total $000
(336) 2 (12) (11) (357)
(530) 74 (15) (471)
(866) 2 62 (26) (828)
(360) 1 22 1 (336)
(612) 81 1 (530)
(972) 1 103 2 (866)
197,455 425 197,880
239,541 1,814 241,355
2009 Beginning and end of financial year
197,455
239,541
All issued ordinary shares are fully paid. There is no par value for these ordinary shares. The holders of ordinary shares are entitled to receive dividends as and when declared by the Company. All ordinary shares carry one vote per share without restriction. Please refer to Note 25(b) for details of share options.
91
Annual Report 2010

22. RElATED PARTY TRAnSACTIOnS In addition to other related party information disclosed elsewhere in the financial statements, the following transactions have been carried out between the Group and its related parties on commercial terms and at market rates during the financial year: (a) Transactions with related parties: The group 2010 2009 $000 $000 Purchase of non-controlling interest shares from a Director of the Company (b) Share options granted to key management The aggregate number of share options granted to the key management of the Group during the financial year is 249,000 (2009: 204,000). The share options have been granted on the same terms and conditions as those offered to the other employees of the Company (Note 25(b)). The aggregate number of share options granted to the key management of the Group outstanding as at the end of the financial year is 754,000 (2009: 822,000). (c) Key managements remuneration The key managements remuneration includes fees, salary, bonus, commission and other emoluments (including benefits-in-kind) computed based on the cost incurred by the Group and the Company, and where the Group or Company do not incur any costs, the value of the benefit. The key managements remuneration is as follows: The group 2010 2009 $000 $000 Key management of the Group: directors of the Company directors of the subsidiaries others
57
2,444 1,754 111 4,309
2,309 1,569 42 3,920
Annual Report 2010
Comprising the following: The group 2010 2009 $000 $000 Directors fees, salaries and other short-term employee benefits Employers contribution to Central Provident Fund and other defined contribution plans Share options granted 3,939 79 291 4,309 3,685 88 147 3,920
92

23. COnTIngEnT lIAbIlITIES Contingent liabilities relating to guarantees are: The Company 2010 2009 $000 $000 In respect of guarantees given to banks in connection with facilities granted to subsidiaries 24. COmmITmEnTS (a) Capital commitments The group 2010 2009 $000 $000 Capital commitments authorised and contracted but not provided for in the consolidated financial statements The Company 2010 2009 $000 $000
68
68
7,023
1,309
The capital commitments above relate to construction of/purchases of property, plant and equipment and improvements to investment properties. (b) Operating lease commitments As a lessee The Group leases certain offices, warehouses, and other premises under non-cancellable lease arrangements. Certain premises are further sub-leased to third parties under non-cancellable sub-lease agreements. The group 2010 2009 $000 $000
Annual Report 2010
Lease rental expense Sub-lease rental income recognised in consolidated income statement
2,292 (849)
1,580 (810)
Future minimum rentals payable under non-cancellable leases as of 31 December are as follows: The group 2010 2009 $000 $000 Within one year Between one year and five years After five years 1,056 3,649 13,305 18,010 570 1,749 2,800 5,119
93

24. COmmITmEnTS (b) Operating lease commitments (continued) As a lessor The Group owns certain investment properties, which are tenanted under non-cancellable lease arrangements. Future minimum rentals receivable under non-cancellable leases as of 31 December are as follows: The group 2010 2009 $000 $000 Within one year Between one year and five years More than five years 14,273 19,501 824 34,598 13,560 12,394 1,236 27,190
25. EmPlOYEE bEnEfITS The group 2010 2009 $000 $000 (a) Staff costs (including Executive Directors): salaries, bonuses and other costs employers contribution to Central Provident Fund and other defined contribution plans expensing of share options Key managements remuneration is disclosed in Note (22(c)). (b) The Company operates the Haw Par Corporation Group 2002 Share Option Scheme (2002 Scheme). The 2002 Scheme was approved by members of the Company on 22 May 2002. The 2002 Scheme grants non-transferable options to selected employees and includes the participation by the non-executive directors. The maximum life-span of exercising the options is 10 years (exercise period). The options are exercisable beginning on the first anniversary from the date when the options are granted or the second anniversary if the options are granted at a discount to the market price under the 2002 Scheme. Once the options are vested, they are exercisable for a period of four years. The options may be exercised in full or in part in respect of 1,000 shares or any multiple thereof, on the payment of the exercise price. The Group has no legal or constructive obligation to repurchase or settle the options in cash. The exercise price is equivalent to the average of the last dealt price for the share for five consecutive market days immediately before the offer date (market price) at the time of grant and can be set at discounts of up to 20% to the market price under the 2002 Scheme. During the financial year, options for 386,000 shares were granted to qualifying employees on 1 March 2010 (2010 Options), of which 8,000 had been subsequently cancelled. The fair value of the options granted using the Trinomial valuation model is approximately $508,000. The significant inputs into the model are exercise price of $5.86 at the grant date, standard deviation of expected share price returns of 33%, 5-year option life and annual risk-free interest rate of 0.25%. The volatility measured at the standard deviation of expected share price returns is based on statistical analysis of daily share prices over a historical period that matches the period to expiry of the options. The 2010 options are exercisable from 1 March 2011 and expire on 28 February 2015. 17,719 1,350 450 19,519 17,142 1,375 214 18,731
94
Annual Report 2010

25. EmPlOYEE bEnEfITS (continued) (c) Information with respect to share options granted under the 2002 Scheme is as follows: number of shares 2010 2009 under 2002 Scheme: Outstanding at beginning of the financial year Granted Cancelled Exercised Outstanding at end of the financial year Exercisable at end of the financial year Details of share options granted during the financial year: 2010 Expiry date Exercise price Aggregate proceeds if shares are issued ($000) 28.2.2015 $5.86 $2,262 2009 1.3.2014 $3.71 $1,258
1,086,000 899,000 386,000 339,000 (54,000) (152,000) (425,000) 993,000 1,086,000 615,000 778,000
Movement in the number of unissued ordinary shares under option and their exercise prices are as follows: number of shares covered by the options balance at beginning of financial balance year or date at end of of grant financial (if later) Cancelled Exercised year
Date of grant 2010
Exercise price
Exercise period
2.3.2006 2.3.2007 3.3.2008 2.3.2009 1.3.2010
130,000 264,000 290,000 308,000 386,000 1,472,000
20,000 26,000 8,000 54,000
58,000 273,000 425,000
72,000 244,000 264,000 35,000 378,000 993,000
$5.52 $7.54 $6.47 $3.71 $5.86
95
Annual Report 2010
19.5.2005
94,000
94,000
$5.11
19.5.2006 - 18.5.2010 2.3.2007 - 1.3.2011 2.3.2008 - 1.3.2012 3.3.2009 - 2.3.2013 2.3.2010 - 1.3.2014 1.3.2011 - 28.2.2015

25. EmPlOYEE bEnEfITS (continued) (c) (continued) number of shares covered by the options balance at beginning of financial balance year or date at end of of grant financial (if later) Cancelled Exercised year
Date of grant 2009 18.5.2004 19.5.2005 2.3.2006 2.3.2007 3.3.2008 2.3.2009
Exercise price
Exercise period
20,000 94,000 130,000 316,000 339,000 339,000 1,238,000
20,000 52,000 49,000 31,000 152,000
94,000 130,000 264,000 290,000 308,000 1,086,000
$4.80 $5.11 $5.52 $7.54 $6.47 $3.7
18.5.2005 - 17.5.2009 19.5.2006 -18.5.2010 2.3.2007 -1.3.2011 2.3.2008 -1.3.2012 3.3.2009 - 2.3.2013 2.3.2010 - 1.3.2014
26. fInAnCIAl RISk mAnAgEmEnT Financial risk factors The Groups activities expose it to market risk (including currency risk and price risk), credit risk and liquidity risk. The Groups overall risk management strategy seeks to minimise adverse effects from the unpredictability of financial markets on the Groups financial performance. The Board of Directors is responsible for setting the objectives and underlying principles of financial risk management for the Group. The Investment Committee then establishes the detailed policies, such as authority levels, oversight responsibilities, risk identification and measurement, exposure limits and hedging strategies, in accordance with the objectives and underlying principles approved by the Board of Directors. Regular reports are submitted to Investment Committee and Board of Directors respectively that contain the Groups exposure to each type of financial risks.
96
Annual Report 2010

26. fInAnCIAl RISk mAnAgEmEnT (continued) (a) Market risk The Group is exposed to market risk, including primarily changes in currency exchange rates and market prices of securities. (1) Foreign currency risk The Group operates in Asia and through agents/distributors in other parts of the world, with dominant operations in Singapore. Entities in the Group regularly transact in currencies other than their respective functional currencies (foreign currencies). Currency risk arises when transactions are denominated in foreign currencies such as United States Dollar (USD), Hong Kong Dollar (HKD) and Euro. In addition, the Group is also exposed to currency translation risks arising from its foreign currency denominated net financial assets, which are not significant. The Group manages its foreign currency exposures by a policy of matching, as far as possible, by receipts and payments in each individual currency. The surplus of convertible currencies are either further matched with future foreign currency requirements or exchanged for Singapore Dollar. The Group also has available forward contract facilities to hedge future foreign exchange exposure. The foreign currency exposure of the Groups net investment in overseas subsidiaries is managed under the guidance of the Investment Committee. The Groups currency exposure based on the information provided to key management is as follows: uSD $000 group At 31 December 2010 Cash and cash equivalents Trade and other receivables Trade and other payables Currency exposure on financial assets and liabilities hkD $000 Euro $000 Others $000 Total $000
6,996 5,918 (3,836)
895 (353)
1,154 931 (2,139)
1,411 587 (1,487)
10,456 7,436 (7,815)

Annual Report 2010
9,078
542
(54)
511
10,077
97

26. fInAnCIAl RISk mAnAgEmEnT (continued) (a) Market risk (continued) (1) Foreign currency risk (continued) uSD $000 group (continued) At 31 December 2009 Cash and cash equivalents Trade and other receivables Trade and other payables Currency exposure on financial assets and liabilities hkD $000 Euro $000 Others $000 Total $000
9,925 5,526 (3,389)
(865)
1,752 279 (1,773)
1,056 789 (1,413)
12,733 6,594 (7,440)
12,062
(865)
258
432
11,887
The Company does not have material foreign currency exposure as at 31 December 2010 and 2009 except for certain amounts due to a subsidiary denominated in Hong Kong Dollar of $19,432,000 (2009: $20,811,000). A 10% (2009: 10%) weakening of Singapore Dollar against the following currencies at reporting date would increase/(decrease) profit or loss by the amounts shown below, with all other variables including tax rate being held constant: uSD $000 group At 31 December 2010 Profit or loss
Annual Report 2010
hkD $000
Euro $000
Others $000
Total $000
908
54
(5)
51
1,008
At 31 December 2009 Profit or loss 1,206 (87) 26 43 1,188
A 10% (2009: 10%) strengthening of Singapore Dollar against the above currencies would have had the equal but opposite effect on the above currencies to the amounts shown above, on the basis that all other variables remain constant.
98

26. fInAnCIAl RISk mAnAgEmEnT (continued) (a) Market risk (continued) (2) Market price risk The Group has substantial investments carried at fair value of $1,574.9 million (2009: $1,597.4 million) held in various forms of securities as of 31 December 2010 and have been accounted for in accordance with the accounting policy stated in Note 2(i). These securities are mainly listed in Singapore. The Group is not exposed to material commodity price risk. The fair value of financial instruments traded in active markets (such as available-for-sale securities) is based on quoted market prices at the statement of financial position date. The quoted market price used for financial assets held by the Group is the current bid price. These instruments are categorised as Level 1 under the fair value hierarchy under the relevant accounting standard. The market price risk associated with these investments is the potential loss in fair value resulting from the decrease in market prices of securities. If prices for equity and debt securities listed in Singapore and elsewhere change by 10% (2009: 10%) with all other variables including tax rate being held constant, the equity will be: 2010 $000 Group Listed in Singapore increased by decreased by Listed elsewhere increased by decreased by 2009 $000
151,793 (151,793)
153,728 (153,728)
31 (31)
32 (32)
The Groups investments are managed under the guidance of the Investment Committee. (b) Liquidity risk As at 31 December 2010, the Group has available cash and short term bank deposits totalling $109.8 million (2009: $85.5 million). The cash and deposits, together with the available credit facilities are expected to be sufficient to meet the funding requirements of the Groups operations. The Group does not have any material financial liabilities maturing more than 12 months from 31 December 2010.
99
Annual Report 2010

26. fInAnCIAl RISk mAnAgEmEnT (continued) (c) Credit risk Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Group. The Groups maximum exposure to credit risk in the event that the counterparties fail to perform their obligations as of 31 December 2010 in relation to each class of recognised financial assets is the carrying amount of those assets as indicated in the statements of financial position, except as follows: 2010 $000 Corporate guarantees provided to banks on subsidiaries obligations 2009 $000
68
68
The Groups and Companys major classes of financial assets that are subject to credit risk are short-term bank deposits, investments in debt securities and trade receivables. It is the Groups policy to transact with creditworthy counterparties. In addition, the granting of material credit limits to counterparties is reviewed and approved by senior management. The Group does not expect to incur material credit losses on its financial assets or other financial instruments. (i) Financial assets that are neither past due nor impaired Short-term bank deposits that are neither past due nor impaired are mainly deposits with banks with high credit-ratings assigned by international credit rating agencies. Trade receivables that are neither past due nor impaired are substantially companies with a good collection track record with the Group. Debt securities are issued by companies with high credit-ratings assigned by international credit rating agencies. (ii) Financial assets that are past due and/or impaired There is no other class of financial assets that is past due and/or impaired except for trade receivables.
100
Annual Report 2010

26. fInAnCIAl RISk mAnAgEmEnT (continued) (c) Credit risk (continued) (ii) Financial assets that are past due and/or impaired (continued) The age analysis of trade receivables past due but not impaired is as follows: The group 2010 2009 $000 $000 Past due within 1 month Past due 1 to 3 months Past due 4 to 6 months Past due over 6 months 1,231 33 1 33 1,298 1,005 29 76 26 1,136
The carrying amount of trade receivables individually determined to be impaired is $70,000 (2009: $68,000) and the movement of the related allowance for impairment are as follows: 2010 $000 Beginning of financial year Exchange adjustments End of financial year (d) Capital risk The Groups objectives when managing capital are to safeguard the Groups ability to continue as a going concern and to maintain an optimal capital structure so as to maximise shareholder value. In order to maintain or achieve an optimal capital structure, the Group may adjust the amount of dividend payment, return capital to shareholders, buy back issued shares or obtain new borrowings. Management monitors capital based on ability of the Group to generate sustainable profits and availability of retained profits for dividend payments to shareholders. The Groups overall strategy remains unchanged from 2009. The Group and the Company are in compliance with all externally imposed capital requirements for the financial years ended 31 December 2009 and 2010.
Annual Report 2010
2009 $000 69 (1) 68
68 2 70
101

26. fInAnCIAl RISk mAnAgEmEnT (continued) (e) Financial instruments by category The financial instruments of the Group and of the Company include the following: note The group 2010 2009 $000 $000 The Company 2010 2009 $000 $000
financial Assets Available-for-sale financial assets Trade and other receivables Cash and cash equivalents
14 17 18
1,574,861 18,597 109,837 1,703,295
1,597,423 18,538 85,458 1,701,419
455 107,442 72,102 179,999
431 138,204 49,321 187,956
financial liabilities Trade and other payables
19
(31,831) (31,831) 1,671,464
(32,172) (32,172) 1,669,247
(150,587) (150,587) 29,412
(151,964) (151,964) 35,992
27. SEgmEnTAl REPORTIng At 31 December 2010, the Group is organised into the following main business segments: Manufacturing, marketing and trading of healthcare products; Provision of leisure-related services; Property rental; and Investments in securities.
Healthcare division principally manufactures and distributes topical analgesic products under the Tiger Balm and Kwan Loong brand. These products are sold in more than 80 countries around the world. Leisure division provides family and tourist oriented leisure alternatives mainly in the form of oceanariums.
Annual Report 2010
Property division owns and leases out several investment properties in the Asia region. Investment division engages in investing activities, mainly in quoted and unquoted securities in Asia region. Inter-segment transactions are determined on an arms length basis. Unallocated costs represent corporate expenses. Segment assets consist primarily of available-for-sale financial assets, investment properties, property, plant and equipment, intangible assets, inventories, receivables, bank deposits and cash and bank balances. Segment liabilities comprise operating liabilities and exclude tax assets and tax liabilities. Capital expenditure on non-current assets comprises additions to investment properties, property, plant and equipment, intangible assets and investment in associated companies.
102

27. SEgmEnTAl REPORTIng (continued) The Group evaluates performance on the basis of profit or loss from operations before tax expenses and management fees charged internally and exclude non-recurring gains and losses. The Group accounts for inter-segment sales and transfers as if the sales or transfers were to third parties, ie. at current market prices. The Groups reportable segments are strategic and distinct business units reporting to key group management. They are managed separately because each business targets different customers and carry different business risk. (a) Reportable segments
leisure products healthcare and products services $000 $000 Property rental Investments Eliminations Consolidated $000 $000 $000 $000
2010
Sales to external customers Inter-segment sales Interest income Other income Inter-segment other income
79,072 40 322 79,434 1,002
34,971 283 35,254 4,071
15,718 722 1,069 17,509 10
958 48,192 23,679 72,829 76
(762) (23,679) (24,441)
129,761 958 49,866 180,585 5,159
Depreciation Reportable segment profit Unallocated expenses Profit from operations Share of results of associated companies/Gain on dilution of investment in associated company (net) Fair value gains on investment properties Taxation Non-controlling interests Earnings for the financial year
16,157
12,585
12,336
71,090
(22,097)
90,071 (5,265) 84,806

Annual Report 2010
23,521
23,521
15,436
15,436 (10,993) (263) 112,507
103

27. SEgmEnTAl REPORTIng (continued) (a) Reportable segments (continued)

leisure products healthcare and products services $000 $000
Property rental Investments Eliminations Consolidated $000 $000 $000 $000
2010 (continued) Reportable segment assets Tax recoverable Total assets per statement of financial position Expenditures for reportable segment non-current assets - Additions to property, plant and equipment - Investment properties improvements Reportable segment liabilities Taxation Deferred income taxation Total liabilities per statement of financial position
53,587
55,986
178,481
1,977,896
(223,550)
2,042,400 4
2,042,404
2,830
1,112
136
4,079
2,830
1,112
1,025 1,026
136
1,025 5,104
20,194
4,806
5,086
1,745
31,831 7,388 53,536
Annual Report 2010
92,755
104


2009 Sales to external customers Inter-segment sales Interest income Gain on liquidation of a subsidiary Other income Inter-segment other income
74,105 22 736 74,863
32,802 417 33,219
17,084 723 1,030 18,837
1,500 442 43,867 29,095 74,904
(745) (29,095) (29,840)
123,991 1,500 442 46,050 171,983
Allowance for impairment in value of available-for-sale financial assets Depreciation Reportable segment profit Unallocated expenses Profit from operations Share of results of associated companies Fair value losses on investment properties Taxation Non-controlling interests Earnings for the
943
2,363
11
476 94
476 3,411
15,508
13,526
13,911
72,948
(27,625)
88,268 (4,783) 83,485
7,590
7,590
Annual Report 2010
(32,866)
(32,866) (1,044) (129)
financial year
57,036
105


2009 (continued) Reportable segment assets Tax recoverable Total assets per statement of financial position Expenditures for reportable segment non-current assets - Additions to property, plant and equipment - Investment properties improvements - Investment in an associated company
49,923
56,641
162,270
2,021,977
(287,613)
2,003,198 124
2,003,322
2,076
11,853
13
13,949
347
347
2,076
11,853
354
9,095 9,108
9,095 23,391
Reportable segment liabilities 19,332 Taxation Deferred income taxation Total liabilities per statement of financial position
Annual Report 2010
5,922
5,346
1,572
32,172 6,924 54,279
93,375
106

27. SEgmEnTAl REPORTIng (continued) (b) Geographical Information non-current Revenues (i) assets (ii) $000 $000 2010 Singapore Other Asian countries Other countries Total 2009 Singapore Other Asian countries Other countries Total (i) (ii) (c)
50,248 42,785 36,728 129,761
1,424,409 143,678 1,568,087
51,650 39,164 33,177 123,991
1,389,181 122,725 1,511,906
Revenues are attributable to countries in which the customer is located. Non-current assets are shown by the geographical area where the assets are located.
Major customers Revenues of approximately $14,925,000 (2009: $16,353,000) are derived from a single group of external customers. These revenues are attributable to the sale of Healthcare products in Singapore and other Asian countries.
28. nEW ACCOunTIng STAnDARDS AnD fRS InTERPRETATIOnS AnD AmEnDmEnTS Below are the mandatory standards, amendments and interpretations to existing standards that have been published, and are relevant for the Groups accounting periods beginning on or after 1 January 2011 or later periods and which the Group has not early adopted: Amendments to FRS 24 Related party disclosures (effective for annual periods beginning on or after 1 January 2011) Amendments to FRS 32 Financial instruments: Presentation classification of rights issues (effective for annual periods beginning on or after 1 February 2010) Amendments to INT FRS 114 Prepayments of a minimum funding requirement (effective for annual periods commencing on or after 1 January 2011) INT FRS 119 Extinguishing financial liabilities with equity instruments (effective for annual periods commencing on or after 1 July 2010)
107
The management anticipates that the adoption of the above FRSs, INT FRSs and amendments to FRS in the future periods will not have a material impact on the financial statements of the Group and of the Company in the period of their initial adoption, except for the amendments to FRS 24 Related party disclosures that may entail further disclosures.
Annual Report 2010

29. SIgnIfICAnT SubSIDIARIES AnD ASSOCIATED COmPAnIES Effective equity interest held by group 2010 2009 % %
name of Company
Country of incorporation
Principal activities
leisure products and services Haw Par Leisure Pte Ltd Singapore Investment holding 100.0 100.0
Chengdu Haw Par Oceanarium Co., Ltd ++
The People's Republic of China
Owning and operating oceanariums Investment holding Owning and operating oceanariums Investment holding
100.0
100.0
* *
Sports Services Ltd Underwater World Singapore Pte Ltd
Singapore Singapore
100.0 100.0
100.0 100.0
Underwater World Attractions Pte Ltd * Underwater World Pattaya Ltd + healthcare products Haw Par Healthcare Limited
Singapore
100.0
100.0
Thailand
Owning and operating oceanariums
46.6
46.6
Singapore
Manufacturing, marketing and distributing healthcare products under licence Manufacturing, marketing and distributing pharmaceutical products Marketing and distributing pharmaceutical products
100.0
100.0
Annual Report 2010
Tiger Balm (Malaysia) Sdn. Bhd. +
Malaysia
100.0
100.0
108
Haw Par Tiger Balm (Thailand) Limited +
Thailand
49.0
49.0

29. SIgnIfICAnT SubSIDIARIES AnD ASSOCIATED COmPAnIES (continued) Effective equity interest held by group 2010 2009 % %
name of Company
healthcare products (continued) * Haw Par Tiger Balm (Philippines), Inc. ++ Philippines Marketing and distributing pharmaceutical products Import, export and distribution of pharmaceutical, health and consumer products Marketing and distributing pharmaceutical products Manufacturing, marketing and distributing pharmaceutical products Manufacturing, marketing and distributing pharmaceutical products Marketing and distributing pharmaceutical products 100.0 100.0
PT. Haw Par Healthcare ++
Indonesia
100.0
100.0
Tiger Medicals (Taiwan) Limited ++
Taiwan
100.0
100.0
Xiamen Tiger Medicals Co., Ltd. ++
The Peoples Republic of China
100.0
100.0
Haw Par Healthcare (Xiamen) Co., Ltd ++
The Peoples Republic of China
100.0
100.0
Haw Par India Private Limited +
India
100.0
100.0
109
Annual Report 2010

name of Company
Property Haw Par Properties (Singapore) Private Limited Haw Par Centre Private Ltd Singapore Property development 100.0 and owning and letting properties Property development 100.0 and owning and letting properties Property development 100.0 and owning and letting properties Owning and leasing of properties Investment in properties and letting out of office space 100.0 100.0
Singapore
100.0
Setron Limited
Singapore
100.0
Sovereign Sports Limited +
Hong Kong of properties Malaysia
100.0
Haw Par Land (Malaysia) Sdn. Bhd. +
100.0
100.0
Investments Haw Par Capital Pte Ltd Haw Par Equities Pte Ltd Singapore Singapore Investment holding Investment holding and dealing in securities Investment holding 100.0 100.0 100.0 100.0
Annual Report 2010
Haw Par Investment Holdings Private Limited Haw Par Pharmaceutical Holdings Pte. Ltd Haw Par Securities (Private) Limited
Singapore
100.0
100.0
Singapore
Investment holding
100.0
100.0
110
Singapore
Investment holding and dealing in securities
100.0
100.0

name of Company
Investments (continued) Haw Par Trading Pte Ltd Singapore Investment holding and dealing in securities Investment holding and dealing in securities Investment holding 100.0 100.0
M & G Maritime Services Pte Ltd
Singapore
100.0
100.0
Pickwick Securities Private Limited Straits Maritime Leasing Private Limited
Singapore
100.0
100.0
Singapore
Investment holding and dealing in securities Investment holding and dealing in securities Investment holding and licensing of Kwan Loong trademark Investment holding
100.0
100.0
Tiger Balm (Hong Kong) Limited +
Hong Kong
100.0
100.0
Haw Par Brothers International (H.K.) Limited +
Hong Kong
100.0
100.0
Haw Par Hong Kong Limited + Haw Par Management Services Pte Ltd
Hong Kong
100.0
100.0
111
Annual Report 2010
Singapore
Provision of management support services
100.0
100.0

29. SIgnIfICAnT SubSIDIARIES AnD ASSOCIATED COmPAnIES (continued) Effective equity interest held by group 2010 2009 % % 40.0 17.14 40.0 20.93
name of Company
UIC Technologies Pte Ltd *
Singapore
Investment holding Investment holding
Hua Han Bio-Pharmaceutical Cayman Islands Holdings Limited #
Notes (i) (ii) (iii) Companies indicated with a (*) are indirectly held by Haw Par Corporation Limited. Companies indicated with a (+) are audited by firms of PricewaterhouseCoopers outside Singapore. Companies indicated with a (++) are audited by other firms. These foreign- incorporated companies are not considered as significant foreign-incorporated subsidiaries under the Singapore Exchange Listing Manual. Accordingly, Rule 716 of the Listing Manual has been complied with. Company indicated with a (#) is listed on an overseas exchange and audited by other firm of auditors. Its financial year end is 30 June. The Group has equity accounted for the profit of its associated company from 1 January 2010 based on its audited accounts for the financial year ended 30 June 2010, and unaudited six months results to 31 December 2010 as announced on the overseas stock exchange. Accounting year end for Haw Par India Private Limited (HPI) is 31 March as required by the laws of its country of incorporation. The consolidated financial statements incorporated the unaudited results of HPI from 1 January to 31 December. All the above subsidiaries and associated companies operate in their respective countries of incorporation except Hua Han Bio-Pharmaceutical Holdings Limited which operates mainly in the Peoples Republic of China.
(iv)
(v)
(vi)
112
Annual Report 2010

30. COmPARATIVE fIguRES Comparatives figures have been reclassified to conform to the current years presentation as follows: The group As previously Restated stated 2009 2009 $'000 $'000 Cost of sales Gross profit Sales and marketing expenses General and administrative expenses 31. AuThORISATIOn Of fInAnCIAl STATEmEnTS These financial statements are authorised for issue in accordance with a resolution of the Board of Directors of Haw Par Corporation Limited on 23 February 2011. (52,874) 71,117 (24,648) (10,434) (51,771) 72,220 (23,517) (12,668)
113
Annual Report 2010
fInAnCIAl CAlEnDAR
Date 13 May 2010 5 August 2010 9 September 2010 4 November 2010 23 February 2011 25 March 2011 6 April 2011 20 April 2011 20 May 2011 1 June 2011
Event Announcement of 2010 1st quarter results Announcement of 2010 2nd quarter results Payment of 2010 first and interim dividend Announcement of 2010 3rd quarter results Announcement of 2010 full-year audited results Announcement of Notice of Annual General Meeting/ Despatch of 2010 Summary Financial Report Despatch of 2010 Annual Report 42nd Annual General Meeting Proposed books closure date for dividend entitlement Proposed payment of 2010 second and final dividend
114
Annual Report 2010
gROuP OffICES
CORPORATE OffICE haw Par Corporation limited 401 Commonwealth Drive #03-03 Haw Par Technocentre Singapore 149598 Tel : 6337 9102 Fax : 6336 9232 Website : www.hawpar.com
hEAlThCARE haw Par healthcare limited 401 Commonwealth Drive #03-03 Haw Par Technocentre Singapore 149598 Tel : 6337 9102 Fax : 6262 3436 Website : www.tigerbalm.com Tiger balm (malaysia) Sdn. bhd. PLO 95 No.6 Jalan Firma 1/1 Tebrau Industrial Estate 81100 Johor Bahru Malaysia Tel : 07 354 9616 Fax : 07 354 9630 xiamen Tiger medicals Co., ltd 2/F No 17 Building, Yi Bin Road, Taiwan Industrial Estate, Huli District, Zipcode 361006, Xiamen The Peoples Republic of China Tel : 86 592 562 0201 Fax : 86 592 562 0202 haw Par healthcare (xiamen) Co., ltd Blk 289 #02-08 Wengjiao Road Xinyang Industrial Area Haicang, Xiamen The Peoples Republic of China PT. haw Par healthcare Jl. Tebet Timur Dalam Raya No. 135 Jakarta 12820 Indonesia haw Par Tiger balm (Thailand) limited 280 Charoenkrung Kwaeng Samphanthawong Khet Samphanthawong Bangkok 10100 Thailand haw Par Tiger balm (Philippines), Inc. Towers Virtual Office and Business Center 11/F Unit MN CyberOne Building Cyberpark Eastwood Libis, Quezon City Philippines 1110 haw Par (India) Private limited 204-B, Crystal Plaza New Link Road Andheri (w) Mumbai 400053 India Tiger medicals (Taiwan) limited 5F, No. 410 Sec 5 Zhong Xiao E. Road Taipei City 11061 Taiwan ROC
115
Annual Report 2010
gROuP OffICES
lEISuRE haw Par leisure Pte ltd 401 Commonwealth Drive #03-03 Haw Par Technocentre Singapore 149598 Tel : 6337 9102 Fax : 6336 9232 underwater World Singapore Pte ltd 80 Siloso Road, Sentosa Singapore 098969 Tel : 6275 0030 Fax : 6275 0036 Email : uwspl@underwaterworld. com.sg Website : www.underwaterworld. com.sg underwater World Pattaya ltd 22/22 Moo 11, Sukhumvit Road, Nongprue, Banglamung, Chonburi 20260 Thailand Tel : 66 3875 6879 Fax : 66 3875 6977 Website : www.underwaterworldpattaya. com Chengdu haw Par Oceanarium Co., ltd No.8 YouLeYuan BinHe Street, Chengdu, Sichuan Province The Peoples Republic of China Website : www.cdoceanpark.cn
PROPERTY & InVESTmEnTS haw Par Properties (Singapore) Private limited 401 Commonwealth Drive #03-03 Haw Par Technocentre Singapore 149598 Tel : 6337 9102 Fax : 6336 9232 haw Par Securities (Private) limited 401 Commonwealth Drive #03-03 Haw Par Technocentre Singapore 149598 Tel : 6337 9102 Fax : 6336 9232 haw Par land (malaysia) Sdn. bhd. 9th Floor, Menara Haw Par Jalan Sultan Ismail 50250, Kuala Lumpur Malaysia Tel : 03 2070 1855 Fax : 03 2070 6078 Tiger balm (hong kong) limited Units 1607-1614 16F Cosco Tower 183 Queens Road Central Hong Kong Tel : 852 2910 8863 Fax : 852 2868 6701
116
Annual Report 2010
mAnAgEmEnT lISTIng
CORPORATE OffICE Wee Ee lim President & Chief Executive Officer Chng hwee hong Executive Director han Ah kuan Executive Director Zann lim Group Financial Controller & Group Company Secretary Teo Thin Yien Group Internal Audit Manager Tarn Sien hao General Manager (Corporate Development and Property Division) justina Yip Group Finance Manager Desmond Wong Group Human Resource Manager lee Tang ling Corporate Communications Manager lawrence Oei Legal Counsel Tan quee kim Corporate Secretarial Manager
PROPERTY Tarn Sien hao Director, Haw Par Properties (Singapore) Private Limited Derrick low Property Manager, Haw Par Land (Malaysia) Sdn. Bhd.
hEAlThCARE han Ah kuan Director & General Manager, Haw Par Healthcare Limited goh bee leong Director & General Manager (Manufacturing), Haw Par Healthcare Limited jasmin hong Deputy General Manager (Marketing), Haw Par Healthcare Limited Song Teng Soo Group Finance Manager, Haw Par Healthcare Limited kow mui lick Senior Manager (QC & QA), Haw Par Healthcare Limited Tey Chee Tiong Regional Manager, Haw Par Healthcare Limited fion Pang Regional Manager, Haw Par Healthcare Limited Choong jun Ee Regional Manager, Haw Par Healthcare Limited felicia low Marketing Manager, Haw Par Healthcare Limited
117
Annual Report 2010
mAnAgEmEnT lISTIng
hEAlThCARE (COnTInuED) Yap Yee Sah Brand Manager, Haw Par Healthcare Limited Aninthaya Soonsatham Country Manager (Thailand & Indochina), Haw Par Tiger Balm (Thailand) Limited Randive uday Country Manager (India), Haw Par Healthcare Limited Tai Voon San Director & Plant Manager, Tiger Balm (Malaysia) Sdn. Bhd. lin Shu Cong Deputy Plant Manager, Xiamen Tiger Medicals Co., Ltd
lEISuRE Chng hwee hong Director, Haw Par Leisure Pte Ltd kwek meng Tiam Regional General Manager, Underwater World Singapore Pte Ltd/Haw Par Leisure Pte Ltd Peter Chew Deputy General Manager, Underwater World Singapore Pte Ltd Anthony Chang Curator, Underwater World Singapore Pte Ltd betty khoo Senior Finance & Administration Manager, Underwater World Singapore Pte Ltd bernard Wong General Manager, Underwater World Pattaya Ltd Thanakorn johnsamer Finance & Administration Manager, Underwater World Pattaya Ltd Darong Yingchon Curator, Underwater World Pattaya Ltd kelvin Whang Marketing Manager, Underwater World Pattaya Ltd john ng General Manager, Chengdu Haw Par Oceanarium Co., Ltd Tommy Peng Finance Manager, Chengdu Haw Par Oceanarium Co., Ltd leo lai Marketing Manager, Chengdu Haw Par Oceanarium Co., Ltd
118
Annual Report 2010
mAjOR PRODuCTS & SERVICES
hEAlThCARE PRODuCTS Tiger brand Products Tiger Balm Ointment, Tiger Balm Soft, Tiger Balm Plaster, Tiger Indomethacin Plaster, Tiger Balm Muscle Rub, Tiger Balm Liniment, Tiger Balm Oil, Tiger Balm Mosquito Repellent Spray, Tiger Balm Mosquito Repellent Patch, Tiger Balm Arthritis Rub, Tiger Balm Joint Rub, Tiger Balm Neck & Shoulder Rub, Tiger Balm Neck & Shoulder Rub Boost, Tiger Balm Back Pain Patch, Tiger Balm Ultra Thin Patch kwan loong brand Products Kwan Loong Medicated Oil, Kwan Loong Refresher
lEISuRE fACIlITIES Oceanariums underwater World Singapore* Dolphin Pool 80 Siloso Road, Sentosa Singapore 098969 Aquarium building easehold L Remaining Lease: 7 years underwater World Pattaya* 22/22 Moo 11, Sukhumvit Road, Nongprue, Banglamung, Chonburi 20260 Thailand quarium building A Leasehold Remaining Lease: 11 years Chengdu haw Par Oceanarium* No.8 YouLeYuan, BinHe Street, Chengdu, Sichuan Province The Peoples Republic of China Aquarium building Leasehold Remaining Lease: 26 years
119
Annual Report 2010
mAjOR PRODuCTS & SERVICES
PROPERTIES haw Par Centre 180 Clemenceau Avenue Singapore 239922 Six-storey commercial building Leasehold Remaining Lease: 41 years haw Par glass Tower 178 Clemenceau Avenue Singapore 239926 Eight-storey commercial building easehold L Remaining Lease: 59 years haw Par Technocentre 401 Commonwealth Drive Singapore 149598 Seven-storey industrial building Leasehold Remaining Lease: 52 years haw Par Tiger balm building* 2 Chia Ping Road Singapore 619968 ine-storey industrial building N Leasehold Remaining Lease: 19 years Westlands Centre Unit 1405-1407 Westlands Centre 20 Westlands Road Quarry Bay, Hong Kong ffice & industrial units O 99-year lease 9 menara haw Par Lot 242, Jalan Sultan Ismail 50250 Kuala Lumpur, Malaysia hirty-two storey T commercial building reehold F
Annual Report 2010
* Properties used by operations are included in Property, Plant and Equipment
120
STATISTICS Of ShAREhOlDIngS
As at 2 March 2011
DISTRIbuTIOn Of ShAREhOlDIngS Number of shares issued : 197,935,654 Class of shares : Ordinary Voting rights : One vote per share
Size of holdings 1 - 999 1,000 - 10,000 10,001 - 1,000,000 1,000,001 and above Total
no. of Shareholders 16,084 4,665 626 12 21,387
% 75.20 21.81 2.93 0.06 100.00
no. of Shares 1,921,548 13,330,329 27,169,013 155,514,764 197,935,654
% 0.97 6.73 13.73 78.57 100.00
TWEnTY lARgEST ShAREhOlDERS no. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 name Wee Investments Private Limited Citibank Nominees Singapore Pte Ltd DBS Nominees Pte Ltd Tye Hua Nominees (Pte) Ltd UOB Kay Hian Pte Ltd United Overseas Insurance Limited - SHF Wah Hin & Co Pte Ltd HSBC (Singapore) Nominees Pte Ltd United Overseas Bank Nominees Pte Ltd DBSN Services Pte Ltd C Y Wee & Co Pte Ltd Ho Sim Guan Wee Cho Yaw Lee Boon Leong How Kok Kooi Ho Han Leong Calvin Tan Proprietary (Pte) Ltd UOB Nominees (2006) Pte Ltd Chua Wee Keng Wee Ee Lim Total no. of Shares 47,969,542 39,541,641 21,819,067 15,850,486 13,790,815 3,886,000 3,320,596 2,371,961 2,320,995 1,679,230 1,493,771 1,470,000 972,583 609,287 550,000 500,401 430,000 423,094 400,128 397,448 159,797,045 % 24.23 19.98 11.02 8.01 6.97 1.96 1.68 1.20 1.17 0.85 0.75 0.74 0.49 0.31 0.28 0.25 0.22 0.21 0.20 0.20 80.73
fREE flOAT
Based on the information available to the Company as at 2 March 2011, approximately 35% of the issued ordinary shares of the Company is held by the public and therefore, the Company has complied with Rule 723 of the SGX-ST Listing Manual which requires at least 10% of equity securities (excluding preference shares and convertible equity securities) in a class that is listed at all times held by the public.
121
Annual Report 2010
STATISTICS Of ShAREhOlDIngS
As at 2 March 2011
SubSTAnTIAl ShAREhOlDERS AS AT 2 mARCh 2011 Direct Wee Cho Yaw Wee Ee Cheong Wee Ee Lim Wee Ee Chao Wee Investments Private Limited United Overseas Bank Limited MacKenzie Financial Corporation First Eagle Investment Management LLC Supreme Island Corporation (1) 993,067 117,143 397,448 12,570 47,969,542 10,986,910 no. of Shares held Deemed Total 63,149,001 60,488,074 58,963,443 59,084,305 19,735,034 15,171,200 28,237,080 64,142,068 60,605,217 59,360,891 59,096,875 47,969,542 19,735,034 15,171,200 28,237,080 10,986,910 % 32.41 30.62 29.99 29.86 24.23 9.97 7.66 14.27 5.55
(1), (2), (3) (1), (2), (4) (1) (1), (5)
(7) (8), (9)
(10)
Messrs Wee Cho Yaw, Wee Ee Cheong, Wee Ee Lim and Wee Ee Chao are deemed to be interested in the shares held by Wee Investments Private Limited, Supreme Island Corporation and Kheng Leong Co Pte Ltd. Messrs Wee Cho Yaw and Wee Ee Cheong are deemed to have an interest in the shares held by C.Y. Wee & Co Pte Ltd. Mr Wee Cho Yaw is deemed to have an interest in the shares held by UOL Group Limited. Mr Wee Ee Cheong is deemed to have an interest in the shares held by E.C. Wee Pte Ltd. Mr Wee Ee Chao is deemed to have an interest in the shares held by Protheus Investment Holdings Pte Ltd and KIP Investment Holdings Pte Ltd. Kheng Leong Co Pte Ltd, C.Y. Wee & Co Pte Ltd, UOL Group Limited, E.C. Wee Pte Ltd, Protheus Investment Holdings Pte Ltd and KIP Investment Holdings Pte Ltd are not substantial shareholders of the Company. United Overseas Bank Limited is deemed to have an interest in the 15,849,034 shares held by Tye Hua Nominees (Pte) Limited and 3,886,000 shares held by United Overseas Insurance Limited - SHF. Mackenzie Financial Corporation (MFC) holds the shares in its capacity as investment manager on behalf of its advisory accounts. One of the accounts, Mackenzie Cundill Value Fund holds 13,369,000 shares, amounting to a shareholding of 6.75%. Certain upstream shareholders of MFC are deemed to have interest in the shares of the Company as follows: (a) Each of Mackenzie Inc. (MI) and IGM Financial Inc (IGM) is a substantial shareholder of the Company by virtue of its deemed interest in the shares managed by its subsidiaries as fund managers. Each of MI and IGM is deemed to have an interest in 15,171,200 shares of which 15,171,200 shares are held through MFC. Each of Power Financial Corporation, 171263 Canada Inc., Power Corporation of Canada (PCC), Gelco Enterprises Ltd., Nordex Inc. and Pansolo Holding Inc. is a substantial shareholder of the Company by virtue of its deemed interest in the shares managed by its subsidiaries as fund managers. Each of these entities is deemed to have an interest in 15,176,454 shares of which 15,171,200 shares are held through MFC. Mr. Paul Desmarais is a substantial shareholder of the Company by virtue of his indirect controlling interest in, amongst others, PCC, which in turn has a deemed interest in the shares managed by PCCs subsidiaries as fund managers. He is deemed to have an interest in 15,176,454 shares of which 15,171,200 shares are held through MFC.
(2) (3) (4) (5) (6)
(7) (8)
(9)
Annual Report 2010
(b)
(c)
122
(10) First Eagle Investment Management LLC is an U.S. investment adviser, holding the shares on behalf of its clients. One of its mutual funds, First Eagle Overseas Fund holds 23,192,830 shares amounting to a shareholding of 11.71%.
nOTICE Of AnnuAl gEnERAl mEETIng

hAW PAR CORPORATIOn lImITED (Incorporated in the Republic of Singapore) Company Registration Number: 196900437M
NOTICE IS HEREBY GIVEN that the Forty-Second Annual General Meeting of the Company will be held at 80 Raffles Place, 61st Storey, UOB Plaza 1, Singapore 048624 on Wednesday, 20 April 2011 at 3.00 p.m. to transact the following business: AS ORDInARY buSInESS Resolution 1 Resolution 2 To receive and adopt the Directors Report and Audited Financial Statements for the financial year ended 31 December 2010 together with the Auditors Report thereon. To declare a Second & Final Tax-Exempt Dividend of 14 cents per share for the financial year ended 31 December 2010.
To re-appoint the following Directors, who are retiring pursuant to Section 153(6) of the Companies Act, Cap. 50, to hold office until the next Annual General Meeting of the Company: Resolution 3 Mr Wee Cho Yaw
Mr Wee Cho Yaw will, upon re-appointment, continue as chairman of the Board and Investment Committee and a member of the Nominating Committee and Remuneration Committee of the Company. Resolution 4 Dr Lee Suan Yew
Dr Lee Suan Yew will, upon re-appointment, continue as a member of the Audit Committee and Nominating Committee of the Company. Dr Lee is considered as an independent Director. Resolution 5 Mr Hwang Soo Jin
Mr Hwang Soo Jin will, upon re-appointment, continue as a member of the Audit Committee and Remuneration Committee of the Company. Mr Hwang is considered as an independent Director. Resolution 6 Mr Reggie Thein
Mr Reggie Thein will, upon re-appointment, continue as Chairman of the Audit Committee of the Company. Mr Thein is considered as an independent Director.
Annual Report 2010
To re-elect the following Directors, who are retiring by rotation pursuant to Article 98 of the Companys Articles of Association: Resolution 7 Mr Wee Ee Lim
Mr Wee Ee Lim will, upon re-election, continue as a member of the Investment Committee.
123
Resolution 8
Mr Sat Pal Khattar
Mr Sat Pal Khattar will, upon re-election, continue as Chairman of the Nominating Committee and Remuneration Committee of the Company. Mr Khattar is considered as an independent Director. Resolution 9 Resolution 10 To approve Directors fees of $310,000 for the financial year ended 31 December 2010 (2009: $257,000). To re-appoint Messrs PricewaterhouseCoopers LLP as Auditor of the Company to hold office until the conclusion of the next Annual General Meeting and to authorise the Directors to fix their remuneration.
AS SPECIAl buSInESS To consider and, if thought fit, pass the following ordinary resolutions: Resolution 11 That approval be and is hereby given to the Directors to offer and grant options to employees (including executive Directors) and non-executive Directors of the Company and/or its subsidiaries who are eligible to participate in the Haw Par Corporation Group 2002 Share Option Scheme (2002 Scheme) in accordance with the rules of the 2002 Scheme, and pursuant to Section 161 of the Companies Act, Cap. 50, to allot and issue from time to time such number of shares in the Company as may be required to be issued pursuant to the exercise of options under the 2002 Scheme, provided that the aggregate number of shares to be issued pursuant to this resolution shall not exceed five per cent (5%) of the total number of issued shares of the Company from time to time. That approval be and is hereby given, pursuant to Rule 14.1 of the rules of the 2002 Scheme, for the extension of the duration of the 2002 Scheme for a further period of five (5) years from 6 June 2012 to 5 June 2017; and the Directors of the Company be and are hereby severally authorised to complete and do all such acts and things as they may consider necessary, expedient, incidental or in the interests of the Company to give effect to the transactions contemplated and/or authorised by this Resolution. That subject to and contingent upon the passing of Resolution 12 set out above, approval be and is hereby given for Options (as defined in the rules of the 2002 Scheme) to be granted under the 2002 Scheme with Exercise Prices (as defined in the rules of the 2002 Scheme) which may be set at a discount to the Market Prices (as defined in the rules of the 2002 Scheme) for the ordinary shares in the share capital of the Company, Provided that the maximum discount which may be given in respect of any Option shall not exceed 20% of the relevant Market Price in respect of that Option.
Resolution 12
Resolution 13
124
Annual Report 2010
Resolution 14
That pursuant to Section 161 of the Companies Act, Cap. 50, the Articles of Association of the Company and the listing rules of the Singapore Exchange Securities Trading Limited, approval be and is hereby given to the Directors to issue shares in the Company (whether by way of rights, bonus or otherwise) 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 provided that the aggregate number of shares to be issued pursuant to this resolution shall not exceed fifty per cent (50%) of the Companys total number of issued shares, of which the aggregate number of shares to be issued other than on a pro-rata basis to members of the Company shall not exceed fifteen per cent (15%) of the total number of issued shares of the Company, and for the purposes of this resolution, the percentage of issued shares shall be based on the total number of issued shares in the capital of the Company at the time this resolution is passed after adjusting for new shares arising from the conversion of share options on issue at the time this resolution is passed, and any subsequent consolidation or subdivision of the Companys shares.
nOTICE Of ClOSuRE Of bOOkS NOTICE IS HEREBY GIVEN that the Share Transfer Books and Register of Members of the Company will be closed on 20 May 2011. Duly completed transfers received in respect of the shares of the Company by the Companys Share Registrar, Boardroom Corporate & Advisory Services Pte Ltd at 50 Raffles Place, #32-01, Singapore Land Tower, Singapore 048623 up to 5.00 p.m. on 19 May 2011 will be registered to determine members entitlement to the proposed Second & Final dividend. Members whose securities accounts with The Central Depository (Pte) Ltd which are credited with shares of the Company as at 5.00 p.m. on 19 May 2011 will be entitled to such proposed dividend. The proposed Second & Final dividend, if approved by members, will be payable on 1 June 2011.
By Order of the Board
Singapore 25 March 2011
125
Annual Report 2010
Zann lim Company Secretary
nOTES TO RESOluTIOnS 2, 3 TO 8, 11,12, 13 AnD 14 Resolution 2 Together with the interim tax-exempt dividend of 6 cents per share paid on 9 September 2010 and subject to shareholders approval on the second & final tax-exempt dividend of 14 cents per share, the total tax-exempt dividend for the financial year ended 31 December 2010 would be 20 cents per share. (2009: 20 cents tax-exempt). Further information on the Directors can be found in the Board of Directors section of this Annual Report. is to empower the Directors to allot and issue shares pursuant to the 2002 Scheme which was approved at the Extraordinary General Meeting of the Company on 22 May 2002. A copy of the Rules of the 2002 Scheme is available for inspection by members during normal business hours at the registered office of the Company at 401 Commonwealth Drive, #03-03 Haw Par Technocentre, Singapore 149598. this resolution if passed, will extend the duration of the 2002 Scheme for a further period of five (5) years from 6 June 2012 to 5 June 2017. Please refer to the Letter to Shareholders dated 25 March 2011. is to empower the Directors to grant options at a discount to the Market Price (as defined in the rules of the 2002 Scheme), up to a maximum of 20% of the relevant Market Price, in accordance with the 2002 Scheme. Pursuant to Rule 859 of the Listing Manual of the Singapore Exchange Securities Trading Limited, shareholders who are eligible to participate in the Scheme shall abstain from voting in respect of Resolution 11 to 13. is to empower the Directors to issue shares in the Company, subject to the limits contained in the resolution. Unless revoked or varied by the Company in general meetings, such authority shall remain in force until the conclusion of the next Annual General Meeting of the Company or the date by which the next Annual General Meeting of the Company is required by law to be held, whichever is the earlier. The Directors would only issue shares under this resolution where they consider it appropriate and in the interest of the Company to do so.
Resolutions 3 to 8 Resolution 11
Resolution 12
Resolution 13
Resolutions 11 to 13 Resolution 14
notes
Annual Report 2010
(1) A member entitled to attend and vote at the meeting is entitled to appoint one or two proxy/proxies to attend and vote in his/her stead. A proxy need not be a member of the Company. (2) To be effective, the Proxy Form must be deposited at the registered office of the Company at 401 Commonwealth Drive, #03-03 Haw Par Technocentre, Singapore 149598, not less than 48 hours before the time set for holding the meeting.
126
PROxY fORm
hAW PAR CORPORATIOn lImITED (Incorporated in the Republic of Singapore) Company Registration Number: 196900437M fORTY-SECOnD AnnuAl gEnERAl mEETIng
(Before completing this form, please read the notes behind.)
ImPORTAnT: 1. For investors who have used their CPF monies to buy shares of Haw Par Corporation Limited, this annual report is forwarded to them at the request of their CPF Approved Nominees and is sent solely FOR INFORMATION ONLY. This Proxy Form is not valid for use by CPFIS investors and shall be ineffective for all intents and purposes if used or purported to be used by them. CPFIS Investors who wish to vote should contact their CPF Approved Nominees.
2.
3.
number of shares held: Scrip-based Scripless
I/We, of being a member/members of the Company, hereby appoint:

nAmE ADDRESS nRIC/ PASSPORT nO.
(Name) (Address)
PROPORTIOn Of ShAREhOlDIngS (%)
(a) And/or (delete as appropriate) (b) as my/our proxy/proxies to attend and vote for me/us and on my/our behalf at the Forty-Second Annual General Meeting of the Company to be held on Wednesday , 20 April 2011 at 3.00 p.m. and at any adjournment thereof. (Please indicate with a x in the spaces provided whether you wish your votes to be cast for or against the Ordinary Resolutions as set out in the notice of Annual general meeting. In the absence of specific directions, your proxy/proxies may vote or abstain as he/she may think fit.
nO. RESOluTIOn fOR AgAInST
Ordinary business 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Adoption of Financial Statements and Reports of the Directors and Auditors Declaration of Second & Final Dividend Re-appointment of Mr Wee Cho Yaw Re-appointment of Dr Lee Suan Yew Re-appointment of Mr Hwang Soo Jin Re-appointment of Mr Reggie Thein Re-election of Mr Wee Ee Lim Re-election of Mr Sat Pal Khattar Approval of Directors fees Re-appointment of PricewaterhouseCoopers LLP as Auditors Authority to issue shares (Share Options) Approval to extend Haw Par Corporation Group 2002 Share Option Scheme Approval for granting discount to exercise price of Share Option Authority to issue shares (General)
Special business
Dated this ________ day of _________ 2011
Signature(s) or Common Seal of Member(s)
notes: 1. Please insert at the top right hand corner of this Proxy Form the number of scrip-based shares in the Company registered in your name in the Register of Members and the number of scripless shares in the Company entered against your name in the Depository Register maintained by The Central Depository (Pte) Limited (CDP) in respect of the shares in your securities account with CDP. If no number is inserted, this Proxy Form shall be deemed to relate to all the shares held by you. A member entitled to attend and vote at the meeting is entitled to appoint one or two proxy/proxies to attend and vote in his/her stead. A proxy need not be a member of the Company. A member is not entitled to appoint more than two proxies to attend and vote on his/her behalf. Where a member appoints two proxies, the appointments shall be invalid unless he/she specifies the proportion of his/her shareholding (expressed as a percentage of the whole) to be represented by each proxy. The sending of a Proxy Form by a shareholder does not preclude him/her from attending and voting in person at the Annual General Meeting if he/she finds that he/she is able to do so. In such event, the relevant Proxy Form will be deemed to be revoked. To be effective, this Proxy Form must be deposited at the registered office of the Company at 401 Commonwealth Drive, #03-03 Haw Par Technocentre, Singapore 149598, not less than 48 hours before the time set for holding the meeting. This Proxy Form must be signed by the appointor or by his/her attorney. In the case of a corporation, this form must be executed under its common seal or signed by its duly authorised attorney or officer. In the case of joint holders, all holders must sign this form. Any alteration made in this Proxy Form should be initialled by the person who signs it. The Company shall be entitled to reject this Proxy Form if it is incomplete, improperly completed or illegible or where the true intentions of the appointor is not ascertainable from the instructions of the appointor specified in the form. In the case of members whose shares are entered against their names in the Depository Register, the Company may reject any proxy form lodged if such members are not shown to have the corresponding number of shares in the Company entered against their names in the Depository Register as at 48 hours before the time set for holding the meeting or the adjourned meeting, as appropriate. Agent banks acting on the requests of the CPFIS investors who wish to attend the Annual General Meeting as observers are requested to submit in writing, a list with details of the investors names, NRIC/Passport numbers, addresses and number of shares held. The list, signed by an authorised signatory of the Agent Bank, should reach the Companys Registrar, Boardroom Corporate & Advisory Services Pte Ltd at 50 Raffles Place, #32-01 Singapore Land Tower, Singapore 048623, not less than 48 hours before the time set for holding the meeting.
2. 3.
4.
5.
6.
7. 8.
9.
HAw PAR CORPORATION LIMITED (Incorporated in the Republic of Singapore) Company Registration Number: 196900437M 401 Commonwealth Drive #03-03 Haw Par Technocentre Singapore 149598 Tel: 6337 9102 Fax: 6336 9232 www.hawpar.com

Haw Par Annual Report 2010

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Haw Par Corporation Limited annual report 2010

Focus. Resilience. Sustainability.

Haw Par Corporation Limited

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H Haw Par Corporation Limited Corporation Limited rp ratio Limited

Wee Cho Yaw Chairman

Haw Par Corporation Limited

Annual Report 2010

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Annual Report 2010

Haw Par Corporation Limited

Annual Report 2010

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Haw Par Corporation Limited

Annual Report 2010

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KEY & SENIOR EXECUTIVES

Haw Par Corporation Limited

Annual Report 2010

KEY & SENIOR EXECUTIVES

Haw Par Corporation Limited

Annual Report 2010

GROUP FINANCIAL HIGHLIGHTS

28,106 30,924 33,055 31,906 123,991

7.1 11.6 (4.2) 5.0 4.7

10,012 44,821 23,876 (20,500) 58,209

(10.3) 10.9 32.6 262.9 112.6

9,048 42,846 22,076 (16,934) 57,036

(19.5) 11.1 35.5 263.5 97.3

56.9 20.0 2.8 9.76

28.9 20.0 1.4 9.58

96.9 100.0 1.9

Haw Par Corporation Limited

471 276 230

473 262 193

(0.4) 5.3 19.2

Exclude the fair value changes on investment properties

GROUP FINANCIAL HIGHLIGHTS

Healthcare Leisure Property

60.9 27.0 12.1

Healthcare Leisure Property

59.8 26.5 13.7

PROFIT CONTRIBUTION (%)

Healthcare Leisure Property Investments

14.2 11.1 10.9 63.8

Healthcare Leisure Property Investments

16.2 14.1 14.5 55.2

ASSETS EMPLOYED (%)

Haw Par Corporation Limited

Healthcare Leisure Property Investments

4.1 4.1 7.9 83.9

Healthcare Leisure Property Investments

4.8 4.9 9.9 80.4

FIVE YEAR FINANCIAL SUMMARY

56.9 20.0 2.8

28.9 20.0 1.4

39.6 20.0 2.0

77.8 25.0* 3.1

51.6 20.0 2.6

5.8 9.76 21,454