Casa Holdings Limited. AnnualReport HEIGHTS GREATER SCALING

Transcription

1 Casa Holdings Limited AnnualReport HEIGHTS GREATER SCALING

2 Contents Corporate Profile Chairman s Statement Financial Highlights Board of Directors Key Management Corporate Structure Corporate Social Responsibility Corporate Information Corporate Governance Report And Financial Contents

3 Corporate Profile The Group had its beginnings in 1976 when Casa (S) Pte Ltd was set up to market and distribute Faber cooker hoods. Since then the Group has forged partnerships with some exclusive brand names for home appliances, consumer electronics and bathroom fixtures from Europe. Eventually they became synonymous with quality home appliances. Listed on 20 September 1995 on SGX Mainboard the Group has acquired the integrated ability to manufacture, assemble, market, distribute and provide after-sales services/technical supports. In Singapore, the Group has established a wide network of dealers including electrical retailers, interior designers, chain stores and property developers. The Group has a geographical footprint spanning Southeast Asia, South Asia, North Africa, Middle East and certain European countries to distribute its products. The Group has in recent years ventured into the China market and has one manufacturing plant there. Core activities include design, assembly, installation and provision of after-sales maintenance services for commercial air-conditioning and other mechanical ventilating systems and manufacture and sale of kitchen appliances and drying machines. Casa Holdings Limited Annual Report

4 Broader Perspective We see our business potential in a wider perspective, opportunities in a wider sense and we are ready to tap on to them. The possibility is limitless.

5 Chairman s Statement The Group registered a profit of $9.5 million for the year ended 30 September 2013, as compared to a profit of $9.4 million recorded in Despite the challenging and competitive environment, the Group s electrical appliances distribution businesses in Singapore and Malaysia have remained relatively stable. For the financial year, 37.0% (2012: 31.09%) of the Group s profits were contributed by our associated company, Fiamma Holdings Berhad ( Fiamma ), which is listed on Bursa Malaysia Securities Berhad whilst 37.3% (2012: 30.8%) of the Group s profits were due to a reversal of allowance for impairment loss of our investment in Fiamma which were made in prior years. The Group s earnings per share was 4.54 cents in 2013, as compared to 4.50 cents in For the year ended 30 September 2013, our net asset value per share rose to cents from cents in In view of our good results, the Board proposes a final tax exempt dividend of 1.0 cent per ordinary share (2012: 1.0 cent). Outlooks and Plans For the coming year, we intend to continue to explore emerging markets for our home appliances business with our venture into Morocco to expand our distribution channels. To further expand our operational capacity and to lower our operation and distribution costs, we have purchased a piece of land in Johor, Malaysia with the intention to build a warehouse for future capacity expansion. Whilst we expect the increase in government housing to be completed this year, the competition remains keen. In order to diversify our business, we propose to diversify into residential property development with the acquisition of land to be developed in 4 phases in the Iskandar region in Malaysia. The proposed diversification and acquisition of the land is subject to shareholders approval. Acknowledgement To our shareholders, customers, suppliers and business associates, I would like to express my appreciation for your continued support to the Group. I would also like to thank the fellow members of the Board, management team and all staff for your dedication and team work that has contributed to another successful year. Lim Soo Kong Chairman and CEO Casa Holdings Limited Annual Report

6 Clearer Strategies With our strength and expertise, passion and determination we craft our strategies towards the future. Clarity and Focus in executing them is the key to succeed.

7 Financial Highlights Turnover $ 000 Net Assets $ ,465 53,260 46,117 39,728 22,449 32,608 34,629 31,064 31,007 34, Profit attributable to shareholders $ 000 NTA per share cents 9,447 9,531 5,863 6, , Casa Holdings Limited Annual Report

8 Board of Directors Mr Lim Soo Kong Chairman / CEO Mr Lim Soo Kong, age 67, is the Chairman/CEO of Casa Holdings Limited. He is a founder member of the Company and was appointed to the Board on 2 September Mr Lim is a director in all the various subsidiaries in the Group. He is also a non-independent non-executive director of Fiamma Holdings Berhad, an associate corporation listed on the Mainboard of the Bursa Malaysia Securities Berhad. He graduated with a Diploma in Mechanical Engineering from the Singapore Polytechnic. Mr Hu Zhong Huai Non-Executive Director Mr Hu Zhong Huai, age 36, is a non-executive director and a major shareholder of Casa Holdings Limited. He was last re-elected as a director on 27 January Mr Hu is a director of a major subsidiary in the Group. Mr Hu is a businessman and an entrepreneur in home appliances business. He is currently the director of Arda (Zhejiang) Electrical Co., Ltd, China. He holds a Bachelor of International Business degree from the University of Victoria, Canada. Dr Low Seow Chay Independent Director Dr Low Seow Chay, age 64, has served as an independent director of Casa Holdings Limited since August He is the chairman of the Audit Committee. He was last re-elected as a Director on 31 January Dr Low was an associate professor with Nanyang Technological University. He is now an independent director of Hor Kew Corporation Ltd, Hai Leck Holdings Limited and LK Technology Holdings Ltd. Dr Low holds a PhD in mechanical engineering from Victoria University of Manchester, UK. Mr Lim Yian Poh Independent Director Mr Lim Yian Poh, age 67, joined the Board on 4 November 2008 as an independent director. He is the Chairman of the Remuneration and Nominating Committee. He was last re-elected as a Director on 31 January Mr Lim has extensive experience in the banking and finance industry and is currently the managing director of Yian Poh Associates, a financial consultancy and investment firm. He is also an independent director of TTJ Holdings Ltd and Zicom Group Ltd, a company listed on the Australian Stock Exchange. He is an Honorary Commercial Advisor to The Administrative Committee of JiaXing Economic Development Zone, China and a member of the Advisor Panel of the Singapore Food Manufacturers Association. He holds a Bachelor of Science degree from Nanyang University, Singapore and a Master of Science degree from the University of Hull, UK. Mr Lim Stefan Matthieu Shing Yuan Non-Executive Director Mr Lim Stefan Matthieu Shing Yuan, age 34, is a non-executive director of Casa Holdings Limited since 17 September He is the son of Mr Lim Soo Kong. He was last re-elected as a Director on 31 January Mr Lim is a general manager of Polybuildings (s) Pte Ltd. He holds a Master of Business Systems and Bachelor of Commerce (Accounting & Finance) Degree from Monash University, Australia. 6 Casa Holdings Limited Annual Report 2013

9 Key Management Ms Margaret Chak Lee Hung Group Financial Controller Ms Margaret Chak Lee Hung, age 41, is the Group Financial Controller and Company Secretary and is responsible for all aspects of financial management, accounting and company secretarial functions of the Group. She joined the Group in October 2005 and has more than 18 years of experience in financial management and accounting. She is also a non-independent nonexecutive director of Fiamma Holdings Berhad, an associate corporation listed on the Mainboard of the Bursa Malaysia Securities Berhad. Ms Chak holds a Bachelor of Economics (major in Accountancy) degree from Macquarie University, Sydney and is a member of the Institute of Certified Public Accountants of Singapore. Mr Lim Ngee Meng Finance and Administration Manager Mr Lim Ngee Meng, age 63, is the Finance and Administration Manager responsible for the financial and general administration of the Group s Singapore-based subsidiaries. He joined the Group in 1987 and has more than 27 years of experience in financial accounting and administration. Mr Lim holds a Master of Applied Finance from University of Western Sydney, Australia, Bachelor in Business Administration degree, Thomas Valley University, UK, a Diploma in Management Accounting and Finance from National Productivity Board and Certificate in Banking from Institute of Banking & Finance. Mr Yuan Hee Peng General Manager Mr Yuan Hee Peng, age 57, is the General Manager and is responsible for the operations in Singapore. He joined the Group in Mr Yuan holds a Master of Business Administration from the University of Hull, UK and a Bachelor of Business degree from the Royal Melbourne Institute of Technology, Australia and a Diploma in Marketing from the Chartered Institute of Marketing, UK. He is also an ordinary member of the Management Development Institute of Singapore and the Singapore Institute of Management. Casa Holdings Limited Annual Report

10 Higher Aspirations Taking it to the next level, this is our aim. We endeavour to offer enhanced value to all our stakeholders and we set out to make it happen. Now more than ever, we are ready.

11 Corporate Structure Casa (S) Pte Ltd Casa Global Pte Ltd UNO Casa S.A.R.L* Casa International Pte Ltd Asteras Pte Ltd Changzhou Asteras Air Conditioning Manufacturer Co. Ltd Casa Property Holdings Pte Ltd Casa Property Development Sdn Bhd Casa Poly Builder Sdn Bhd Fiamma Holdings Berhad ** * Joint Venture Company ** Associated Company Casa Holdings Limited Annual Report

12 Corporate Social Responsibility Environment As a member of Singapore Green Building Council, Casa has constantly been informed of updates on the various Go Green initiatives or programs organised by the Council. With the updates, Casa plays a role in being environmental friendly by endeavouring to distribute more energy efficient and eco-friendly household appliances. We also continue to advocate the need for eco-friendly household appliances so as to achieve benefits in a sustainable way for the general public, our customers and stakeholders. Over the decades, Casa has cultivated an eco-friendly working environment to encourage our staff to reduce, reuse and recycle any materials to minimize pollution and other adverse impact to the environment. Community Casa has the belief of giving back to the community and promoting employee volunteerism with charitable activities to reach out the less fortunate and low income neglected elderly. We support and participate in numerous programs that promote the communities social wellbeing, particularly in the area of helping the elderly that s under Fei Yue Community Services and Lion Befriender s care. Our Group will continue to engage the community services and promote a culture of contribution in the workplace. 10 Casa Holdings Limited Annual Report 2013

13 Corporate Information Board of Directors Lim Soo Kong (Chairman / CEO) Hu Zhong Huai (Non-Executive Director) Dr Low Seow Chay (Independent Director) Lim Yian Poh (Independent Director) Lim Stefan Matthieu Shing Yuan (Non-Exeutive Director) Company Secretaries Margaret Chak Lee Hung Lotus Isabella Lim Mei Hua Audit Committee Dr Low Seow Chay (Chairman) Lim Yian Poh Lim Stefan Matthieu Shing Yuan Nominating Committee Lim Yian Poh (Chairman) Dr Low Seow Chay Lim Soo Kong Remuneration Committee Share Registrar Tricor Barbinder Share Registration Services (a business division of Tricor Singapore Pte Ltd) 80 Robinson Road #02-00 Singapore Auditors Nexia TS Public Accounting Corporation 100 Beach Road Shaw Tower #30-00 Singapore Director-In-Charge Loh Ji Kin (Appointed since financial year ended 30 September 2011) Registered Office Casa Holdings Limited (Incorporated in Singapore. Registration Number: Z) Website: 15 Kian Teck Crescent Singapore Tel: Fax: Lim Yian Poh (Chairman) Dr Low Seow Chay Casa Holdings Limited Annual Report

14 CORPORATE GOVERNANCE REPORT AND FINANCIAL CONTENTS Corporate Governance Report Directors Report Statement By Directors Independent Auditor s Report Consolidated Statement Of Comprehensive Income Balance Sheets Consolidated Statement Of Changes In Equity Consolidated Statement Of Cash Flow Notes To The Shareholdings Statistics Notice Of Annual General Meeting Proxy Form 12 Casa Holdings Limited Annual Report 2013

15 Corporate Governance Report The Board of Directors of Casa Holdings Limited (the Company ), are committed to high standards of corporate governance and adopting the corporate governance practices contained in the Code of Corporate Governance 2005 ( Code ) so as to ensure greater transparency and protection of shareholders interests. This statement outlines the main corporate governance practices that were in place throughout the financial year. The revised Code of Corporate Governance 2012 (the Revised Code ) would be applicable to the Company for the fi nancial year commencing 1 October The Board confirms that the Group has complied with the best practices of the Code throughout the financial year ended 30 September Board Matters 1.1 The Board s Conduct of its Affairs The Board has the responsibility for the overall management of the Group. It establishes the corporate strategies of the Group, sets direction and goals for the executive management. It supervises the executive management and monitors performance of these goals to enhance shareholders value. The Board is responsible for the overall corporate governance of the Group. 1.2 Board Composition The Board of Directors comprises 5 directors, 2 of whom are independent directors. The Directors of the Company as at the date of this statement are : (i) (ii) (iii) (iv) (v) Mr Lim Soo Kong (Chairman/Chief Executive Officer) Mr Hu Zhong Huai (Non-Executive & Non-Independent Director) Dr Low Seow Chay (Independent Director) Mr Lim Yian Poh (Independent Director) Mr Lim Stefan Matthieu Shing Yuan (Non-Executive & Non-Independent Director) The Board examines its size to satisfy that it is an appropriate size for effective decision making, taking into account the nature and scope of the Company s operations. Key information regarding the Directors is provided on page Independent Directors The Board of Directors has two directors who are independent members. The criteria for independence is determined based on the definition as provided in the Code. The Board considers an independent director as one who has no relationship with the Company, its related companies or its officers that could interfere, or be reasonably perceived to interfere, with the exercise of the directors independent judgement of the Group s affairs. 1.4 Chairman and CEO Mr Lim Soo Kong is the Chairman and Chief Executive Officer ( CEO ) of the Company. The Board is of the opinion that the present Group structure and business scope does not warrant a meaningful split of the role. The Board is of the view that there are sufficient safeguards and checks to ensure that the process of decision making by the Board is independent and based on collective decisions without any individual exercising any considerable concentration of power or influence. The Chairman bears responsibility for the conduct of the Board. The CEO bears executive responsibility for the Company s business. Casa Holdings Limited Annual Report

16 Corporate Governance Report The Chairman ensures that the board meetings are held when necessary and sets the board meeting agenda in consultation with other directors. The Chairman reviews the board papers, prior to presenting them to the Board. The Chairman ensures that Board members are provided with complete, adequate and timely information on a regular basis to enable them to be fully cognisant of the affairs of the Group. 1.5 Board Processes To assist in the execution of its responsibilities, the Board has established an Audit Committee, Nominating Committee and Remuneration Committee. These committees function within clearly defined terms of references and operating procedures, which are reviewed on a regular basis. The effectiveness of each committee is also constantly reviewed by the Board. The full Board meets on a regular basis and as when necessary to address any specific significant matters that may arise. The number of Board and Board Committee meetings held during the Financial Year 2013 and the attendance of each director where relevant are as follows: Board Committee Audit Committee Nominating Committee Remuneration Committee No. of meetings No. of meetings attended by respective directors Lim Soo Kong 2 N.A. 1 N.A. Hu Zhong Huai 2 N.A. N.A. N.A. Low Seow Chay Lim Yian Poh Lim Stefan Matthieu Shing Yuan 2 2 N.A. N.A. All directors (except for Hu Zhong Huai) attended the AGM on 31 January Matters Requiring Board Approval The Board has identified a number of areas for which the Board has direct responsibility for decision making. Interested Person Transactions and the Group s internal control procedures are also reviewed by the Board. Major investments and funding decisions are approved by the Board. The Board also meets to consider the following corporate matters:- Approval of half yearly and year end result announcements; Approval of the Annual Reports and Accounts; Convening of Shareholder s Meetings; Approval of Corporate Strategies; and Material Acquisitions and Disposal of assets. 14 Casa Holdings Limited Annual Report 2013

17 Corporate Governance Report 1.7 Access to Information The Board has separate and independent access to senior management and the company secretary at all times. Requests for information from the Board are dealt with promptly by management. The Board is informed of all material events and transactions as and when they occur. The management provides the Board with half yearly reports of the Company s performance. The management also consults with Board members regularly whenever necessary and appropriate. The Board is issued with board papers timely and prior to Board meetings. The company secretaries attend all board meetings. The company secretaries administer, attend and prepare minutes of Board meetings, and assist the Chairman in ensuring that Board procedures are followed and reviewed so that the Board functions effectively and the Company s Memorandum and Articles of Association and the relevant rules and regulations applicable to the Company are complied with. The Board in fulfilling its responsibilities, can as a group or individually, when deemed fit, direct the Company to appoint professional adviser to render professional advice. 2. Board Committees 2.1 Audit Committee All members of the Audit Committee ( AC ) are non-executive, a majority of whom are independent directors. At the date of this report, the Audit Committee comprises the following members: Dr Low Seow Chay Chairman and Independent Director Mr Lim Yian Poh Independent Director Mr Lim Stefan Matthieu Shing Yuan Non-Executive Director The functions of the AC are as follows: (a) (b) (c) (d) (e) review with the internal and external auditors of the Company, their audit plan, evaluation of the internal accounting controls, audit report and ensures co-operation is given by the Company s management to the internal and external auditors; review the annual financial statements and the Independent Auditor s report on the Company s annual financial statements before they are presented to the Board; review with the management, external and internal auditors the adequacy and effectiveness of the Company s internal controls, business and service systems and practices; review related and interested party transactions; and consider the appointment and re-appointment of the external auditors. The AC has the power to conduct or authorise investigations into any matters within the AC s scope of responsibility. The AC is authorised to obtain independent professional advice if it deems necessary in the discharge of its responsibilities. Such expenses are to be borne by the Company. The AC has full access to and co-operation of the Company s management and has full discretion to invite any director or executive officer to attend the meetings, and has been given reasonable resources to enable it to discharge its functions. During the year, the AC met with the external auditors once without the presence of the management. The Company has complied with Rules 712 and 715 of the Listing Manual issued by SGX in relation to its auditors. Casa Holdings Limited Annual Report

18 Corporate Governance Report The AC, having reviewed the range and value of non-audit services performed by the external auditors, Nexia TS Public Accounting Corporation, and being satisfied that the nature and extent of such services will not prejudice the independence and objectivity of the external auditors, are pleased to confirm their re-nomination. Non-audit service fees paid or payable for the financial year ended 30 September 2013 amount to $13, Internal Audit The Company outsources its internal audit function to an external professional firm, who reports directly to the Chairman of AC and administratively to the CEO. The objective of the internal audit function is to determine whether the Group s risk management, control and governance processes, as designed by the Company, is adequate and functioning in the required manner. The AC reviews the adequacy of the internal audit function annually and ensures that the internal audit function is adequately resourced and has appropriate standing within the Company Internal Controls Based on work performed by the internal and external auditors and reviews conducted by Management, the Board opines, with the concurrence of the AC, that there were adequate controls in place within the Group addressing material financial, operational and compliance risks to meet the needs of the Group in its current business environment as at 30 September It is the opinion of the Board that, the system of internal controls maintained by management and that was in place throughout the financial year and up to the date of this report provides reasonable assurance against material financial misstatements or losses, and includes the safeguarding of assets, the maintenance of proper accounting records, the reliability of financial information, effectiveness and efficiency of operation, compliance with appropriate legislation, regulations and best practices, and the identification and containment of financial, operational and compliance risks. 2.2 Nominating Committee The Nominating Committee ( NC ) comprises 3 directors, a majority of whom are independent. The members of the NC are: Mr Lim Yian Poh Chairman and Independent Director Dr Low Seow Chay Independent Director Mr Lim Soo Kong CEO The NC s principal functions are as follows: (a) (b) (c) (d) recommend to the Board on all board appointments and re-appointments; determine independence of the Directors annually; determine whether or not a Director is able to and has been adequately carrying out his duties as Director of the Company; and evaluate the performance and effectiveness of the Board as a whole. The Articles of Association of the Company require that one-third of the Board retire from office at each Annual General Meeting ( AGM ). Accordingly, the Directors submit themselves for re-nomination and re-election at regular intervals of at least once every 3 years. 16 Casa Holdings Limited Annual Report 2013

19 Corporate Governance Report 2.3 Remuneration Committee All members of the Remuneration Committee ( RC ) are non-executive and independent directors. The members of the RC are: Mr Lim Yian Poh Chairman and Independent Director Dr Low Seow Chay Independent Director The functions of the RC are to review and recommend the remuneration packages of the Executive Directors, CEO and key executives of the Company, oversee and review the administration and management of the Employees Share Options ( ESOS ), if any, and to review the appropriateness of compensation for Non- Executive Directors including but not limited to Directors fees, allowances and share options, if any. The executive director(s) have service contracts which include a profit share element which is Group performance related. Non-executive Directors have no service contracts. The payment of fees to Non- Executive Directors is subject to approval at the annual general meeting of the Company. No director is involved in deciding his own remuneration Remuneration Matters A breakdown showing the level and mix of each individual director s remuneration payable for FY2013 is as follows: $500,000 to below $750, $250,000 to below $500,000 Below $250, Total 5 5 Name Remuneration Band S$ Salary % Profit Sharing % Fringe Benefits % Directors Fees %# Total Lim Soo Kong $500,000 to below $750,000 Hu Zhong Huai Below $250,000 Low Seow Chay Below $250, Lim Yian Poh Below $250, Lim Stefan Matthieu Shing Yuan Below $250, # Directors fees are subject to Shareholders approval at the forthcoming annual general meeting. Remuneration of the top 3 key executives Below $250, The Company does not have any employee who is an immediate family member of a Director or CEO. Casa Holdings Limited Annual Report

20 Corporate Governance Report 3. Communication with Shareholders The Company does not practise selective disclosure. In line with continuous obligations of the Company pursuant to the Singapore Exchange s Listing Rules, the Board s policy is that all shareholders should be equally informed of all major developments impacting the Group. Information is disseminated to shareholders on a timely basis through: SGXNET announcements and news release Annual Report prepared and issued to all shareholders At the Company s annual general meetings, shareholders are given the opportunity to voice their views and ask directors or management questions regarding the Company. The Chairman of the Audit, Remuneration and Nominating Committees will be present at annual general meetings to answer any questions relating to the work of these committees. 4. Risk Management The Company regularly reviews and improves its business and operational activities to identify areas of significant business risks as well as take appropriate measures to control and mitigate these risks. The Company reviews all significant control policies and procedures and highlights all significant matters to the AC and Board. The risk issues are highlighted on page Dealing in Securities In line with Listing Rule 1207 (19) of the Listing Manual, the Company has in place a policy prohibiting dealings in the shares of the Company by Directors and Officers of the Company for the period of one month prior to the announcement of the Company s half yearly and yearly results as the case may be, and ending on the date of the announcement of the relevant results. Directors and Officers are discouraged from trading the Company s securities on short-term considerations and are expected to observe the insider trading laws at all times even when dealing in securities within permitted trading period. 6. Material Contracts Save as disclosed in the Interested Person Transactions Section, there were no material contracts entered into by the Company or any of its subsidiaries involving the interest of the CEO, any Director, or Controlling Shareholder. 18 Casa Holdings Limited Annual Report 2013

21 Corporate Governance Report 7. Interested Person Transactions The Company has established procedures to ensure that all transactions with interested persons are reported in a timely manner to the AC and that transactions are conducted on an arm s length basis and are not prejudicial to the interests of the shareholders. There were no interested person transactions (with value more than $100,000) for the financial year ended 30 September 2013 except as follows: Name of interested person Nature Aggregate value of all interested person transactions during the financial year under review (excluding transactions less than $100,000 and transactions conducted under shareholders mandate pursuant to Rule 920) Multicable Manufacturing (S) Pte Ltd Rental income received $383,298 Arda (Zhejiang) Electrical Co.,Ltd Sale and purchase of goods $945,335 Casa Holdings Limited Annual Report

22 Directors Report The directors present their report to the members together with the audited fi nancial statements of the Group for the fi nancial year ended 30 September 2013 and the balance sheet of the Company as at 30 September Directors The directors of the Company in offi ce at the date of this report are as follows: Lim Soo Kong Hu Zhong Huai Low Seow Chay Lim Yian Poh Lim Stefan Matthieu Shing Yuan Arrangements to enable directors to acquire shares and debentures Neither at the end of nor at any time during the fi nancial year was the Company a party to any arrangement whose object is to enable the directors of the Company to acquire benefi ts by means of the acquisition of shares in, or debentures of, the Company or any other body corporate. Directors interests in shares or debentures According to the register of directors shareholdings, none of the directors holding offi ce at the end of the fi nancial year had any interest in the shares or debentures of the Company or its related corporations, except as follows: Holdings registered in name of director or nominee At At Holdings in which director is deemed to have an interest At At The Company (No. of ordinary shares) Lim Soo Kong 17,139,670 17,139, ,011, ,011,330 Hu Zhong Huai 17,380,110 17,380, ,011, ,011,330 Ultimate Holding Company - Azzuri Holdings Pte Ltd (No. of ordinary shares) Lim Soo Kong 2,000,000 2,000,000 Hu Zhong Huai 2,030,000 2,030,000 The directors interests in the ordinary shares of the Company and of the ultimate holding company as at 21 October 2013 were the same as those as at 30 September Directors contractual benefits Since the end of the previous fi nancial year, no director has received or become entitled to receive a benefi t by reason of a contract made by the Company or a related corporation with the director or with a fi rm of which he is a member or with a company in which he has a substantial fi nancial interest, except as disclosed in the accompanying fi nancial statements and in this report. 20 Casa Holdings Limited Annual Report 2013

23 Directors Report Share options No options have been granted to subscribe for unissued shares of the Company or its subsidiaries during the fi nancial year. No shares have been issued by virtue of the exercise of options to take up unissued shares of the Company or its subsidiaries during the fi nancial year. There were no unissued shares of the Company under option at the end of the fi nancial year. Audit Committee The members of the Audit Committee ( AC ) at the end of the fi nancial year were as follows: Low Seow Chay Lim Yian Poh Lim Stefan Mattieu Shing Yuan (Chairman and Independent Director) (Independent Director) (Non-executive Director) The AC met 2 times in the fi nancial year under review and carried out its functions in accordance with Section 201B(5) of the Singapore Companies Act. In performing those functions, the Committee: reviewed with the independent auditor, the audit plan, their evaluation of the Group s system of internal accounting controls, their audit report, management letter and the management s response; and also to review the assistance given by the Company s offi cers to the independent auditor; reviewed the scope and results of audit and its cost effectiveness and the independence and objectivity of the independent auditor, and where the independent auditor also supply a substantial volume of non-audit services to the Company, reviewed the nature and extent of such services to maintain the balance of objectivity and value for money; reviewed the half-year and full-year fi nancial results of the Company and the consolidated fi nancial statements of the Group before submission to the Board of Directors ( the Board ) for approval; reviewed annually the effectiveness of the Company s material internal controls including fi nancial, operational and compliance control and risk management; reviewed the independence of the independent auditor annually; considered and made recommendations to the Board on the appointment, re-appointment and removal of independent auditor, their remuneration and terms of engagement; ensured that the internal audit function is adequately resourced and has appropriate standing within the Company and to review the adequacy of the function annually; reviewed the scope and results of the internal audit procedures; met with the independent and internal auditors without the presence of the management annually; reviewed interested persons transactions to comply with the rules of the Listing Manual of SGX-ST and other relevant statutory requirements and any potential confl icts of interest; and commissioned and reviewed the fi ndings of internal investigations into matters where there is any suspected fraud or irregularity, or failure of internal controls or infringement of any Singapore law, rules or regulations which has or is likely to have a material impact on the operating results and fi nancial position of the Group. The Audit Committee has recommended to the Board that the independent auditor, Nexia TS Public Accounting Corporation, be nominated for re-appointment at the forthcoming Annual General Meeting of the Company. Casa Holdings Limited Annual Report

24 Directors Report Independent Auditor The independent auditor, Nexia TS Public Accounting Corporation, has expressed its willingness to accept reappointment. On behalf of the directors Lim Soo Kong Director Hu Zhong Huai Director 24 December Casa Holdings Limited Annual Report 2013

25 Statement By Directors In the opinion of the directors, (a) (b) the balance sheet of the Company and the consolidated fi nancial statements of the Group as set out on pages 26 to 70 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 30 September 2013 and of the results of the business, changes in equity and cash fl ows of the Group for the fi nancial year then ended; and at the date of this statement, there are reasonable grounds to believe that the Company will be able to pay its debts as and when they fall due. On behalf of the directors Lim Soo Kong Director Hu Zhong Huai Director 24 December 2013 Casa Holdings Limited Annual Report

26 Independent Auditor s Report To the Members of Casa Holdings Limited For the Financial Report on the We have audited the accompanying financial statements of Casa Holdings Limited (the Company ) and its subsidiaries (the Group ) set out on pages 26 to 70, which comprise the consolidated balance sheet of the Group and the balance sheet of the Company as at 30 September 2013, the consolidated statement of comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash fl ows of the Group for the fi nancial year then ended, and a summary of signifi cant accounting policies and other explanatory information. Management s Responsibility for the Management is responsible for the preparation of fi nancial statements that give a true and fair view in accordance with the provisions of the Singapore Companies Act (the Act ) and Singapore Financial Reporting Standards, and for devising and maintaining a system of internal accounting controls suffi cient to provide a reasonable assurance that assets are safeguarded against loss from unauthorised use or disposition, that transactions are properly authorised and that they are recorded as necessary to permit the preparation of true and fair profi t and loss accounts and balance sheets and to maintain accountability of assets. Auditor s Responsibility Our responsibility is to express an opinion on these fi nancial statements based on our audit. We conducted our audit in accordance with Singapore Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the fi nancial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the fi nancial statements. The procedures selected depend on the auditor s judgement, including the assessment of the risks of material misstatement of the fi nancial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal controls relevant to the entity s preparation and fair presentation of the fi nancial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the management, as well as evaluating the overall presentation of the fi nancial statements. We believe that the audit evidence we have obtained is suffi cient and appropriate to provide a basis for our qualifi ed audit opinion. Basis for Qualifi ed Opinion The Company s investment in Fiamma Holdings Berhad ( Fiamma ), an associated company, is accounted for using the equity method, and is carried at $28.9 million (2012: $24.9 million) in the consolidated balance sheet as at 30 September The Group s share of Fiamma s results of $3.5 million (2012: $2.9 million) and other comprehensive loss of $0.1 million (2012: $0.1 million) and reversal of allowance for impairment of $3.6 million (2012: $2.8 million) are included in the consolidated statement of comprehensive income for the year then ended. Fiamma is a listed company on the Main Market of Bursa Malaysia. The component auditor cited Listing Rules of Bursa Malaysia as a factor in not being able to allow us access to themselves or their audit working papers. The component auditor was not agreeable to discuss the fi nancial affairs and the audit of Fiamma. We were not allowed access to their audit working papers and we were also not able to perform any other satisfactory alternative procedures for us to fulfi ll the requirements of Singapore Standard on Auditing 600, Special Considerations Audit of Group (including the Work of Component Auditors). Therefore, we were unable to obtain suffi cient appropriate evidence to ascertain the carrying amount of the Group s investment in Fiamma as at 30 September 2013 the Group s share of Fiamma s results and other comprehensive income and the reversal of allowance for impairment for the year then ended, and were unable to determine whether adjustments, if any, to these amounts were necessary. 24 Casa Holdings Limited Annual Report 2013

27 Independent Auditor s Report To the Members of Casa Holdings Limited For the Financial Qualifi ed Opinion In our opinion, except for the possible effects of the matter described in the Basis for Qualifi ed Opinion paragraphs, the consolidated fi nancial statements of the Group and the balance sheet 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 30 September 2013, and the results, changes in equity and cash fl ows of the Group for the fi nancial 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. Nexia TS Public Accounting Corporation Public Accountants and Chartered Accountants Director in-charge: Loh Ji Kin Appointed since financial year ended: 30 September 2011 Singapore 24 December 2013 Casa Holdings Limited Annual Report

28 Consolidated Statement of Comprehensive Income Group Note Continuing operations Sales 4(a) 31,007 31,064 Cost of sales (19,141) (19,280) Gross profi t 11,866 11,784 Other income 4(b) 1,359 1,280 Other gains net 4(c) 3,801 3,879 Expenses - Selling and distribution (2,976) (2,871) - Administrative (7,255) (6,549) - Finance 7 (135) (145) Share of results of joint venture 17 (24) (104) Share of results of associated company 16 3,530 2,937 Profit before income tax 10,166 10,211 Income tax expense 8(a) (676) (490) Profit from continuing operations 9,490 9,721 Discontinued operations Loss from discontinued operations 9 (249) Total profit 9,490 9,472 Other comprehensive (loss)/income: Items that may be reclassifi ed subsequently to profi t or loss: Currency translation differences arising from consolidation - Losses (789) (190) - Reclassifi cation (266) Reclassifi cation of currency translation reserves on disposal of a joint venture Share of other comprehensive losses of associated company (132) (79) Other comprehensive loss, net of tax (1,187) (231) Total comprehensive income 8,303 9,241 Profit/(loss) attributable to: Equity holders of the Company 9,531 9,447 Non-controlling interests (41) 25 9,490 9,472 Total comprehensive income/(loss) attributable to: Equity holders of the Company 8,334 9,232 Non-controlling interests (31) 9 8,303 9,241 Earnings / (loss) per share for profit from continuing and discontinued operations attributable to equity holders of the Company- basic and diluted (cents per share) From continuing operations From discontinued operations 10 (0.12) The accompanying notes form an integral part of these fi nancial statements. 26 Casa Holdings Limited Annual Report 2013

29 Balance Sheets As at 30 September 2013 Group Company Note ASSETS Current assets Cash and cash equivalents 11 10,295 10,937 4, Financial assets, at fair value through profi t or loss , ,006 Trade and other receivables 13 14,358 7,467 3, Inventories 14 7,695 7,248 32,430 26,658 8,131 1,956 Non current assets Club membership Investment in an associated company 16 28,929 24,867 14,452 14,452 Investment in joint venture 17 2,271 1,395 Investments in subsidiaries 18 18,644 15,837 Property, plant and equipment 19 11,445 8, Land use rights Deferred income tax assets ,571 35,530 33,489 30,443 Total assets 76,001 62,188 41,620 32,399 LIABILITIES Current liabilities Trade and other payables 22 13,198 6,129 6, Provision for warranty Borrowings 24 2,274 1,943 Current income tax liabilities 8(b) Total liabilities 16,536 8,928 6, NET ASSETS 59,465 53,260 34,929 32,249 EQUITY Capital and reserves attributable to equity holders of the Company Share capital 25 32,315 32,315 32,315 32,315 Currency translation reserves (4,705) (3,640) Revaluation reserves 2,396 2,528 Retained profi ts / (accumulated losses) 29,304 21,871 2,614 (66) 59,310 53,074 34,929 32,249 Non controlling interests Total equity 59,465 53,260 34,929 32,249 The accompanying notes form an integral part of these fi nancial statements. Casa Holdings Limited Annual Report

30 Consolidated Statement of Changes in Equity Note Attributable to equity holders of the Company Currency Share capital translation Revaluation reserves (a) reserves (a) Retained profits (b) Total Non- controlling interests Total equity $ Beginning of fi nancial year 32,315 (3,640) 2,528 21,871 53, ,260 Total comprehensive (loss)/ income for the year (1,065) (132) 9,531 8,334 (31) 8,303 Dividend relating to 2012 paid 26 (2,098) (2,098) (2,098) End of fi nancial year 32,315 (4,705) 2,396 29,304 59, , Beginning of fi nancial year 32,315 (3,504) 2,607 14,522 45, ,117 Total comprehensive (loss)/ income for the year (136) (79) 9,447 9, ,241 Dividend relating to 2011 paid 26 (2,098) (2,098) (2,098) End of fi nancial year 32,315 (3,640) 2,528 21,871 53, ,260 (a) (b) Currency translation reserves and revaluation reserves are non-distributable. Retained profi ts of the Group are distributable except for accumulated retained profi ts of associated company amounting to $20,175,000 (2012: $16,645,000). The accompanying notes form an integral part of these fi nancial statements. 28 Casa Holdings Limited Annual Report 2013

31 Consolidated Statement of Cash Flow The accompanying notes form an integral part of these fi nancial statements. Note Cash flows from operating activities Total profi t 9,490 9,472 Adjustments for: - Income tax expense Amortisation and depreciation charge Interest income 4(b) (66) (52) - Interest expense Dividend income 4(b) (59) (20) - Share of results of joint venture Share of results of associated company 16 (3,530) (2,937) - Reversal of impairment loss for associated company 16 (3,555) (2,750) - Fair value gain on fi nancial assets at fair value through profi t or loss 4(c) (10) (177) - Gain on disposal of fi nancial assets, at fair value through profi t or loss 4(c) (151) - Gain on disposal of property, plant and equipment 5 (27) (1) - Gain on disposal of a joint venture 4(c) (717) - Unrealised currency translation loss ,559 4,456 Change in working capital - Inventories (408) (472) - Trade and other receivables (1,319) (769) - Trade and other payables 1,220 (942) Cash generated from operations 3,052 2,273 Income taxes paid 8(b) (474) (730) Net cash provided by operating activities 2,578 1,543 Cash flows from investing activities Purchase of property, plant and equipment 19 (3,507) (408) Deposits for land held for property development business (5,561) Proceeds from disposal of property, plant and equipment Proceeds from disposal of fi nancial assets, at fair value through profi t or loss 1,085 Acquisition of shares of an associated company (833) Acquisition of shares of a joint venture 17 (8) Advances to a joint venture 17 (898) (1,489) Disposal of a joint venture, net of cash disposed of 1,656 Dividends received from an associated company 16 1, Dividends received from other investments 4(b) Interest received Net cash used in investing activities (7,337) (18) Cash flows from financing activities Movement in bills payable 2,022 (234) Repayment of bank borrowings (1,943) (2,127) Proceeds from bank borrowings 2,274 1,943 Proceeds from related parties borrowings 3,850 Dividends paid to shareholders (2,098) (2,098) Interest paid (135) (145) Decrease in bank deposits pledged Decrease in short term bank deposits with more than 90 days maturity 2,505 1,195 Net cash provided by / (used in) financing activities 6,623 (1,265) Net increase in cash and cash equivalents 1, Cash and cash equivalents at beginning of the financial year 8,110 7,994 Effects of currency translation on cash and cash equivalents 147 (144) Cash and cash equivalents at end of the financial year 11 10,121 8,110 Casa Holdings Limited Annual Report

32 These notes form an integral part of and should be read in conjunction with the accompanying fi nancial statements. 1 General Casa Holdings Limited (the Company ) is listed on the Singapore Exchange and incorporated and domiciled in Singapore. The address of its registered offi ce is 15 Kian Teck Crescent, Singapore The principal activity of the Company is that of an investment holding company. The principal activities of the subsidiaries are set out in Note 18 to the fi nancial statements. 2 Significant accounting policies 2.1 Basis of preparation The fi nancial statements have been prepared in accordance with Singapore Financial Reporting Standards ( FRS ). The fi nancial statements have been prepared under the historical cost convention, except as disclosed in the accounting policies below. The preparation of fi nancial statements in conformity with FRS requires management to exercise its judgement in the process of applying the Group s accounting policies. It also requires the use of certain critical accounting estimates and assumptions. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are signifi cant to the fi nancial statements are disclosed in Note 3. Interpretation and amendments to published standards effective in 2012 On 1 October 2012, the Group adopted the new or amended FRS and Interpretations to FRS ( INT FRS ) that are mandatory for application from that date. Changes to the Group s accounting policies have been made as required, in accordance with the transitional provisional in the respective FRS and INT FRS. The adoption of these new or amended FRS and INT FRS did not result in substantial changes to the Group s and Company s accounting policies and had no material effect on the amounts reported for the current or prior fi nancial years. 2.2 Revenue recognition Sales comprise the fair value of the consideration received or receivable for the sale of goods and rendering of services in the ordinary course of the Group s activities. Sales are presented net of value-added tax, rebates and discounts, and after eliminating sales within the Group. The Group recognises revenue when the amount of revenue and related cost can be reliably measured, it is probable that the collectability of the related receivables is reasonably assured and when the specifi c criteria for each of the Group s activities are met as follows: (i) Sale of goods Revenue from these sales is recognised when signifi cant risks and rewards of ownership of the goods are transferred to the buyer, and it is probable that the goods will not be returned. (ii) Rendering of service Revenue from rendering of services is recognised upon services rendered. (iii) Interest income Interest income is recognised using the effective interest method. 30 Casa Holdings Limited Annual Report 2013