Page 1

building on our core capabilities Annual Report 2007

Jurong Cement Limited


J urong C ement L imited Annual R epor t 2007

Contents Corporate Profile

3

Chairman’s Statement

4

Organisation Chart

6

Board of Directors

7

Financial Highlights

10

Financial Contents

11


3

Corporate Profile

Jurong Cement Limited Annua l Repo r t 2007

J

urong Cement Limited’s modest beginnings can be traced back to 1975 when it commenced cement production with an annual rated production capacity of approximately 500,000 metric tons. Subsequently, the Group embarked on the road to steady growth and within a short period,

became the first cement production company to be listed on the Singapore Stock Exchange in 1979.

The sturdy foundation laid in the early years has allowed the Group to expand and diversify. To capitalise on the rising local demand for ready-mixed concrete, the Group set up Jurong Readymix Concrete Pte Ltd (JRC) in 1982. To date, the high performance concrete produced by JRC has been used in countless construction projects both on the mainland and the surrounding islands of Singapore. Similarly, 1995 saw the establishment of Concrete Connections Pte Ltd (CCPL) to tap into the growing demand for dry mix mortar products. CCPL’s product range includes Masonry Mortars, Flooring Compounds & Screeds, Waterproofing and Protective Coatings under the JURCEM brand. It is also a licensed manufacturer of the LATICRETE brand of products for High Strength Shock and Weather Resistant Ceramic Tile and Stone Installation Systems. 1998 marked the incorporation of Jurong Cement Bulk Terminal Pte Ltd (JCBT) and the Group’s successful commission of its cement terminal at Pulau Damar Laut. The terminal is equipped with a total annual throughput capacity of 1 million metric tons to feed the domestic market’s diverse needs for Ordinary Portland Cement (OPC), Portland

Blast Furnace Cement (PBFC) and Special Blended Cement. Moreover, through its technologicallyadvanced distribution and storage facility, the terminal empowers the Company to better manage its operating costs and resources. In the following year, CCPL commissioned a Dry Mix Mortar Tower Plant to deliver high performance cement-related finishing products and productivity-enhanced services for the Singapore and regional markets. Such a venture has sharpened the Group’s competitive edge as a one-stop building material solutions provider. Jurong Cement has also left imprints beyond the Singapore shores. Over the past 10 years, the Group has relentlessly strengthened its foothold in China. Today, it counts as its pride 4 manufacturing plants in Beijing and Zhejiang with a potential capacity output that exceeds 3.5 million metric tons of cement a year. Having just celebrated its 30th anniversary in 2005, Jurong Cement Limited and its subsidiaries are all geared up to solidify their position as one of the leading producers and distributors of high quality cement and related products and services, both locally and in the region.


4 J urong C ement L i mited A nnual R epo r t 2007

Chairman’s Statement

The Group benefited from the improved environment in construction. With better market demand and selling prices, the Group registered an increase in revenue from $70.1 million to $79.3 million, up 13.2% for the year.

On behalf of the Board of Directors, I present to you the audited financial statements of the Company and the Group for the year ended 31st March 2007.

ECONOMY Singapore’s economic performance in 2006 was robust and registered a gross domestic product increase of 7.9%. The construction industry’s growth was also positive showing an increase of 2.7% for the same period. Construction gross domestic demand in 2006 was $6.88 billion compared to $6.70 billion the previous year, as reported by the Building and Construction Authority.


5 Jurong Cement Limited Annua l Repo r t 2007

FINANCIAL PERFORMANCE

TIME OF CHANGE

The Group benefited from the improved environment in construction. With better market demand and selling prices, the Group registered an increase in revenue from $70.1 million to $79.3 million, up 13.2% for the year.

In May 2007, the company became a subsidiary of Holcim Investments (Singapore) Pte Ltd which is part of the Holcim global cement group, following a Mandatory Unconditional Cash offer for the shares of the company. This exercise was completed on 11th June 2007.

The construction industry experienced a tight supply and rising cost of raw materials during the last quarter of the financial year. Prices of sand and granite escalated to an all time high in February 2007 owing to export restrictions on sand and granite from traditional supply sources. Nevertheless the Group managed to achieve an increase in trading margins for the year. The operating results of associated companies as a whole contributed to profitability during the year of $0.33 million compared to a loss reported the previous year of $1.50 million. This resulted mainly from improved market demand and better selling prices in China. During the year the Group’s subsidiary in Hong Kong carried out a professional revaluation of its property assets, and this led to an impairment in carrying value of $778,000 which has been provided for in the accounts. The audited results of the Group after taking the above into account is a loss after taxation, of $1.83 million compared to a loss the previous year of $4.12 million.

Along with this exercise new Directors and a Managing Director have been appointed to take charge of the Group.

DIVIDEND The Directors do not recommend a dividend for the financial year as the Group has continued to register a loss.

APPRECIATION On behalf of the Board I thank the previous Directors, who have since resigned, for their guidance and contribution to the success of the Company and of the Group as well as to express our gratitude to all our valuable customers, suppliers and shareholders for their continuous support, as well as to our dedicated employees for their commitment and efforts in meeting all the challenges faced during the year.

Paul Hugentobler Chair man


6 J urong C ement L i mited A nnual R epo r t 2007

Organisation Chart Jurong Cement Limited

Cement Production Division Jurong Cement Bulk Terminal Pte Ltd

Cement Bulk Terminal Pte Ltd*

Jurong Cement Manufacturing Pte Ltd

Jurong Cement Beijing Investment Pte Ltd

Beijing Eastern Jurong Cement Technical Development Pte Ltd

Sin Chang An Holdings Pte Ltd

China Singkong Investment Holdings Ltd

Sin Chang An Investments Pte Ltd

Beijing Cement Investments Ltd China Singkong Mentougou Cement Investment Ltd

Beijing Singkong Cement Co. Ltd

Beijing Singkong Dry Mortar Construction Material Co. Ltd

Zhejiang Jurong Cement Co. Ltd

Zhejiang Shanying Cement Co. Ltd

Changxing Lingying Building Material Co. Ltd

Construction Material Division Jurong Readymix Concrete Pte Ltd

Concrete Connections Pte Ltd

Jurong Premier Concrete Pte Ltd

Property Investment Division Jurong Cement Hong Kong Investment Pte Ltd

Jurong Cement Shanghai Investment Pte Ltd

Max Billion Finance Ltd

China Singkong Development Holdings Ltd China Singkong Ma Lu Development Ltd Shanghai Singkong Industrial Park Development Co. Ltd * This Company is under voluntary liquidation.


7

Board of Directors

Mr Paul Hugentobler, 58 Chairman Mr Paul Hugentobler was appointed Chairman of the Board on June 13, 2007. Mr Hugentobler joined Holcim Group Support Ltd in 1980 as a Project Manager and in 1994 was appointed Area Manager for Holcim. From 1999 till 2000, he also served as the Chief Executive Officer of Siam City Cement which was headquartered in Bangkok, Thailand. He has been a member of the Executive Committee of Holcim since January 1, 2002, with the responsibility for South Asia and ASEAN, excluding the Philippines. Mr Hugentobler has a degree in civil engineering from the EHT Zurich and a degree in economic science from the University of St. Gallen.

Mr Tay Joo Soon, 66 Deputy Chairman Since his first appointment as Chairman on September 23, 1998, Mr Tay Joo Soon has spearheaded Jurong Cement Group to greater heights. He was appointed as Deputy Chairman on June 13, 2007. Mr Tay also runs his own firm, Tay Joo Soon & Co., as a proprietor since it was founded in 1971. Currently a practising Certified Public Accountant, he has amassed in-depth knowledge from over 30 years of experience in the fields of accounting, auditing, taxation and company secretarial work in diverse industries like manufacturing and retailing. In addition, Mr Tay sits on the Board of New Toyo International Holdings Ltd and Shanghai Asia Holdings Limited and Tai Sin Electric Cables Manufacturer Limited, all of which are listed companies. Mr Tay is a Fellow of the Institute of Certified Public Accountants of Singapore, Fellow of The Institute of Chartered Accountants in Australia, Member of The Malaysian Institute of Certified Public Accountants and Member of CPA Australia.

Jurong Cement Limited Annua l Repo r t 2007


B o ard of D i re ctors

8 J urong C ement L i mited

Mr Gérard Letellier, 54

A nnual R epo r t 2007

Dr Joe Khor, 57 Chief Executive Officer Dr Joe Khor was appointed CEO of Jurong Cement Group on June 13, 2007. Dr Khor was the CEO of Holcim (Singapore) Pte Ltd in February 2005, in addition to being the Chief Executive Officer of Holcim Malaysia, a position he held since January 1999. He has since relinquished his position as a director and CEO of Holcim (Singapore) Pte Ltd on 10 May 2007. Dr Joe Khor has been in the cement and related business for more than 30 years. He started his career with Blue Circle Industries (now Lafarge) in England and subsequently in other major cement and cement engineering companies in Malaysia, Austria and Germany, prior to joining Holcim. He had also served in various capacities in the Federation of Malaysian Manufacturers, Cement & Concrete Association of Malaysia and Cement Association of Singapore. Dr Khor graduated from the University of Aston in Birmingham in 1974 with a 1st Class honours in Chemical, Process & Business Engineering. He obtained his PhD in Chemical Engineering in 1979.

Mr Gérard Letellier was appointed to the Board on May 30, 2007. Mr Letellier began his career in 1977 in the marketing unit at Holcim France, ultimately moving up to the position of senior management member responsible for cement sales. From 1998 to 2001, he was the Chief Executive Officer of Holcim Vietnam and from 2002, much of his work in his capacity as Deputy Area Manager of Holcim was devoted to the expansion of its presence in China. Effective 1 January 2005, Mr Letellier has been appointed Area Manager of Holcim. He is responsible for Vietnam, Malaysia, Singapore and Bangladesh. Mr Letellier is a graduate of the Business & Administration School of the University of Reims.

Ms Renee Zecha, 48 Ms Renee Zecha was appointed to the Board on May 23, 2007. Ms Zecha is the founder of PT FirstAsia M&A. Ms Zecha served previously as the President Director and the joint venture partner of what is now PT UBS Warburg Indonesia and has approximately 20 years’ experience in the international capital markets with Hambros Bank (London, Sydney), Citibank (Geneva) and HSBC Investment Bank (Jakarta). Currently, she is a member of the Governing Council of ITB School of Business Management. Ms Zecha has served on the Board of Officers for the Association of Indonesian Underwriters (APEI), the Indonesian Financial Executives Association (IFEA) and the Listing Committee of the Jakarta Stock Exchange. She graduated from the London School of Economics and Political Science in 1981 with a B.Sc. (Economics) honours degree.


B oard of D ire ctors

9 Jurong Cement Limited

Dato’ Michael Yeoh Sock Siong, 45

Mr Joseph Grimberg, 74

Dato’ Michael Yeoh Sock Siong joined the Company on March 8, 2006 as a non-executive Director of the Company and was re-appointed on July 28, 2006. His key responsibilities lie with the YTL Group’s Manufacturing Division, which covers industries such as cement, ready mixed concrete, transportable cabins and other building materials. Dato’ Yeoh also sits on the boards of several reputable listed companies in Malaysia, including YTL Corporation Berhad, YTL Cement Berhad, YTL Power International Berhad, YTL Land & Development Berhad and YTL e-Solutions Berhad. D a t o ’ Ye o h g r a d u a t e d f ro m t h e B r a d f ord University, United Kingdom in 1983 with a Bachelor of Engineering (Hons) Civil & Structural Engineering degree.

Mr Joseph Grimberg was appointed on February 19, 1998 and was last re-appointed on July 28, 2006. He joined Drew & Napier in 1957 before he was made a partner in 1967. He was appointed a Judicial Commissioner of the Supreme Court of Singapore in 1987. He stepped down in 1989 and re-joined Drew & Napier as a Senior Consultant. Mr Grimberg is a Fellow of the Singapore Academy of Law, Member of the Singapore Academy of Law, Arbitrator of the ICC International Court of Arbitration, Paris, Member of the Permanent Court of Arbitration, The Hague, Member of the Chartered Institute of Arbitrators, Member of the Panel of Arbitrators, Singapore International Arbitrator Centre and Fellow of the Singapore Institute of Arbitrators. He is a Director of Hotel Properties Limited and F.J. Benjamin Holdings Ltd. Mr Grimberg holds a Bachelor of Arts degree in Law from Cambridge University and is a Barrister-at-law (England) and an Advocate and Solicitor (Singapore).

Mr Joseph Benjamin Seaton, 65 Mr Joseph Benjamin Seaton joined the Company on March 8, 2006 and was re-appointed on July 28, 2006 as a non-executive Director, bringing with him 34 years of management experience in the building and construction industry. His expertise lies in the production and marketing of cement, ready-mixed concrete and concreterelated products. Mr Seaton also sits on the board of YTL Cement Berhad which is listed on the Main Board of Bursa Malaysia Securities Berhad, the Stock Exchange of Malaysia. A graduate of the Royal Military College in 1962, he was commissioned as an Officer in the Malaysian Armed Forces. Armed with a Diploma in Communications, Advertising and Marketing, Mr Seaton also attended the Harvard Business School course in Business Administration.

Mr Justin Kendrick, 47 Mr Justin Kendrick was appointed to the Board on June 13, 2007. Mr Kendrick is a Portfolio Manager with Binjai Hill Asset Management. He has approximately 20 years experience in the international capital markets, holding various management positions including Head of Regional Sales with ABN-AMRO Asia Securities; Head of Singapore Equity Sales with HSBC Securities Asia and Managing Director with Crosby Securities / Crosby Capital Markets. Mr Justin Kendrick holds a Bachelor of Science, E conomics & Economic History and is a Fellow Member of the Chartered Association of Certified Accountants, UK. He is also an Investment Representative and holds a Dealers’ License with Monetary Authority of Singapore since 1993.

Annua l Repo r t 2007


10

Financial Highlight

J urong C ement L i mited

RESULTS OF OPERATIONS S$’000

2003

2004

2005

2006

2007

A nnual R epo r t 2007

Revenue

63,928

61,606

66,326

70,082

79,321

Year ended 31 March

Loss before income tax

(6,235)

(4,227)

(144)

(3,774)

(1,340)

Income tax expenses

1,105

(512)

(13)

(343)

(487)

Loss for the year

(5,130)

(4,739)

(157)

(4,117)

(1,827)

(5,130)

(2,864)

(755)

(4,046)

(1,624)

Attributable to: Equity holders of the Company Minority interests Loss per share (in cents)*

(1,875)

598

(71)

(203)

(5,130)

(4,739)

(157)

(4,117)

(1,827)

(11.57)

(6.46)

(1.70)

(9.13)

(3.66)

FINANCIAL POSITION S$’000

As at 31 March 2003

2004

2005

2006

2007

Property, plant and equipment

33,245

30,009

32,644

29,496

27,404

Investment property

28,313

21,981

22,842

22,572

20,228

Investment in associates

23,253

28,446

26,844

25,332

24,968

Investments in joint ventures Available-for sale investments Club membership Long term trade receivables Net current assets Finance leases

348

280

284

296

296

6,359

6,359

5,626

5,337

3,860

130

130

80

80

80

2,032

12,166

11,086

10,760

11,664

15,034

(39)

(87)

(5)

(12,467)

(12,947)

(12,657)

(4,374)

(1,387)

(3,964)

(3,766)

(3,365)

(837)

(1,009)

(951)

(1,047)

(1,262)

Net Assets

88,129

82,861

81,503

89,964

87,243

Share capital

44,322

44,322

44,322

45,314

45,314

Share premium

992

992

992

Capital reserves

517

517

490

490

490

Due to minority shareholders of a subsidiary co. Long term loans Deferred tax liabilities

4,748

4,594

3,854

4,548

4,503

Retained earnings

41,436

38,218

36,922

32,159

30,203

Equity attributable to equity holders of the Company Minority interest

92,015 (3,886)

88,643 (5,782)

86,580 (5,077)

82,511 7,453

80,510 6,733

Total Equity

88,129

82,861

81,503

89,964

87,243

2.08

2.00

1.95

1.86

1.82

Other reserves

Net tangible assets per share (dollars) RATIOS

Year ended 31 March 2003

2004

2005

2006

2007

Loss before tax%

(9.75)

(6.86)

(0.22)

(5.39)

(1.69)

Loss after tax%

(8.02)

(7.69)

(0.24)

(5.87)

(2.30)

As at 31 March

Current ratio

2003

2004

2005

2006

2007

1.76

1.81

1.76

1.78

1.82

*Note: Loss per share is calculated based on loss after tax and minority interest.


11

Financial Contents

Report of the Directors

12

Statement of Directors

16

Independent Auditors’ Report

17

Balance Sheets

19

Consolidated Profit and Loss Statement

20

Statement of Changes in Equity

21

Consolidated Cash Flow Statement

24

Notes to the Financial Statements

26

Corporate Governance Report

65

Statistics of Shareholdings

73

Substantial Shareholders

74

Notice of Annual General Meeting

75

Notice of Nomination

77

Proxy Form

Jurong Cement Limited Annu al Repo r t 2007


F i nan c ia l C o ntents

Report of the Directors 12 J urong C ement L imited A nnu al R epo r t 2007

The directors present their report together with the audited consolidated financial statements of the Group and the balance sheet and statement of changes in equity of the Company for the financial year ended March 31, 2007.

1

DIRECTORS

The directors of the Company in office at the date of this report are: Paul Hugentobler

(Appointed on May 30, 2007) (Chairman)

Tay Joo Soon

(Deputy Chairman)

Dr Khor Jaw Huei

(Appointed on May 30, 2007) (Chief Executive Officer)

GĂŠrard Letellier

(Appointed on May 30, 2007)

Renee Vanessa Wardhana Zecha

(Appointed on May 23, 2007)

Dato’ Michael Yeah Sock Siong Joseph Benjamin Seaton Joseph Grimberg Justin Murray Guy Kendrick

2

(Appointed on June 13, 2007)

ARRANGEMENTS TO ENABLE DIRECTORS TO ACQUIRE BENEFITS BY MEANS OF THE ACQUISITION OF SHARES AND DEBENTURES Neither at the end of the financial year nor at any time during the financial year did there subsist any arrangement whose object is to enable the directors of the Company to acquire benefits by means of the acquisition of shares or debentures in the Company or any other body corporate.


Finan cia l Contents

Report of the Directors 13 3

DIRECTORS’ INTERESTS IN SHARES AND DEBENTURES The directors of the Company holding office at the end of the financial year had no interests in the share capital and debentures of the Company and related corporations as recorded in the register of directors’ shareholdings kept by the Company under Section 164 of the Singapore Companies Act except as follows: Name of Directors and Company in which interests are held

Shareholdings registered in the name of Directors At beginning At end of of year year

Shareholdings in which Directors are deemed to have an interest At beginning of year

At end of year

The Company (Ordinary shares) Tay Joo Soon

30,000

30,000

Tan Eng Sim (Resigned on May 30, 2007)

212,750

212,750

1,448,000

1,448,000

Whang Shang Ying (Resigned on May 30, 2007)

304,500

304,500

833,750

833,750

Tan Sek Yin (Resigned on May 30, 2007)

60,250

60,250

497,500

165,012

The directors’ interests in the shares of the Company at April 21, 2007 were the same as those at the end of the financial year.

4

DIRECTORS’ RECEIPT AND ENTITLEMENT TO CONTRACTUAL BENEFITS

Since the beginning of the financial year, no director has received or become entitled to receive a benefit which is required to be disclosed under Section 201(8) of the Singapore Companies Act, by reason of a contract made by the Company or a related corporation with the director or with a firm of which he is a member, or with a Company in which he has a substantial financial interest except for salaries, bonuses and other benefits as disclosed in the financial statements.

Jurong Cement Limited Annu al Repo r t 2007


F i nan c ia l C o ntents

Report of the Directors 14 J urong C ement L imited

5

A nnu al R epo r t 2007

The Company has the Jurong Cement Share Option Scheme 2001 (“Scheme�) which was approved by shareholders at the Extraordinary General Meeting on August 28, 2001.

An option may be exercised, in whole or in part, (provided that each partial exercise shall be for shares in multiples of 1,000) by a participant completing and signing a notice of exercise of option which must be accompanied by a remittance for the aggregate subscription cost, at any time after the first anniversary of the date of grant and before the fifth anniversary of the date of grant.

The persons to whom the options have been granted do not have the right to participate, by virtue of the option, in any share issue of any other Company in the Group.

There were no participants to the above share option scheme who are controlling shareholders of the Company and their associates. No participants to the above share options schemes received options which represents 5% or more of the total number of shares available under the above schemes and no shares were issued at a discount to the market price.

The above Scheme is administered by the Remuneration Committee whose members are:

Joseph Grimberg

Tay Joo Soon

Gerard Letellier

During the financial year, no options were granted under the Scheme and there are no outstanding options as at year end.

There were no unissued shares of the subsidiary companies under option as at the end of the financial year.

SHARE OPTIONS (a)

(b)

(Chairman)

Option exercised During the financial year, there were no shares of the Company or any corporation in the Group issued by virtue of the exercise of an option to take up unissued shares.

(c)

Option to take up unissued shares

Unissued shares under option At the end of the financial year, there were no unissued shares of the Company or any corporation in the Group under option, except for the share option scheme disclosed above.


Finan cia l Contents

Report of the Directors 15 6

AUDIT COMMITTEE

At the date of this report, the Audit Committee comprises four non-executive Directors, of whom three, including the Chairman, are independent. Tay Joo Soon

(Chairman)

Joseph Grimberg Justin Murray Guy Kendrick Renee Vanessa Wardhana Zecha

The Audit Committee has met four times since the last Annual General Meeting (“AGM”) and has reviewed the following, where relevant, with the executive directors and external and internal auditors of the Company: a)

the audit plans and results of the internal auditors’ examination and evaluation of the Group’s systems of internal accounting controls;

b)

the Group’s financial and operating results and accounting policies;

c)

the financial statements of the Company and the consolidated financial statements of the Group before their submission to the directors of the Company and external auditors’ report on those financial statements;

d)

the half-yearly and annual announcements as well as the related press releases on the results and financial position of the Company and the Group;

e)

the co-operation and assistance given by the management to the Group’s external auditors; and

f)

the appointment of the external auditors of the Group.

The Audit Committee has full access to and has the co-operation of the management and has been given the resources required for it to discharge its function properly. It also has full discretion to invite any director and executive officer to attend its meetings. The external and internal auditors have unrestricted access to the Audit Committee.

Following Holcim Investments (Singapore) Pte Ltd’s (“Holcim”) acquisition of a majority holding in the Company, Holcim has submitted a Notice of Nomination of Auditor nominating Messrs Ernst & Young in place of the retiring auditors, Messrs Deloitte & Touche at the forthcoming Annual General Meeting of the Company.

The Audit Committee has recommended the nomination of Messrs Ernst & Young as external auditors for the ensuing year.

ON BEHALF OF THE DIRECTORS

Khor Jaw Huei

Gérard Letellier July 5, 2007

Jurong Cement Limited Annu al Repo r t 2007


F i nan c ia l C o ntents

16

Statement of Directors

J urong C ement L imited A nnu al R epo r t 2007

In the opinion of the directors, the consolidated financial statements of the Group and the balance sheet and statement of changes in equity of the Company set out on pages 19 to 64 are drawn up so as to give a true and fair view of the state of affairs of the Group and of the Company as at March 31, 2007 and of the results, changes in equity and cash flows of the Group and the changes in equity of the Company for the financial year then ended and at the date of this statement there are reasonable grounds to believe that the Company will be able to pay its debts when they fall due.

ON BEHALF OF THE DIRECTORS

Khor Jaw Huei

GĂŠrard Letellier

July 5, 2007


Finan cia l Contents

Independent Auditors’ Report to the Members of Jurong Cement Limited

17 Jurong Cement Limited Annu al Repo r t 2007

We have audited the accompanying financial statements of Jurong Cement Limited (the Company) and its subsidiaries (the Group) which comprise the balance sheets of the Group and the Company as at March 31, 2007, the profit and loss statement, statement of changes in equity and cash flow statement of the Group and the statement of changes in equity of the Company for the year then ended, and a summary of significant accounting policies and other explanatory notes, as set out on pages 19 to 64. Directors’ Responsibility The Company’s directors are responsible for the preparation and fair presentation of these financial statements in accordance with Singapore Financial Reporting Standards and the Singapore Companies Act, Cap. 50 (the “Act”). This responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances. Auditors’ Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Singapore Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by directors, 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.


F i nan c ia l C o ntents

Independent Auditors’ Report 18

to the Members of Jurong Cement Limited

J urong C ement L imited A nnu al R epo r t 2007

Opinion In our opinion, (a)

the consolidated financial statements of the Group and the balance sheet and statement of changes in equity of the Company are properly drawn up in accordance with the provisions of the Act and Singapore Financial Reporting Standards so as to give a true and fair view of the state of affairs of the Group and of the Company as at March 31, 2007 and of the results, changes in equity and cash flows of the Group and changes in equity of the Company for the year ended on that date; and

(b)

the accounting and other records required by the Act to be kept by the Company and by those subsidiaries incorporated in Singapore of which we are the auditors have been properly kept in accordance with the provisions of the Act.

Deloitte & Touche Certified Public Accountants Singapore

Philip Yuen Ewe Jin Partner Appointed on July 28, 2004

July 5, 2007


Finan cia l Contents

Balance Sheets

19

March 31, 2007

Jurong Cement Limited

Group Note

Assets Current assets Cash and bank balances Trade receivables Other receivables, deposits and prepayments Due from subsidiaries Due from associates Inventories Total current assets Non-current assets Property, plant and equipment Investment property Subsidiaries Associates Joint venture Available-for-sale investments Club membership Total non-current assets

Company

2007

2006

2007

2006

$

$

$

$

6 7

2,895,014 23,359,193

4,725,740 16,267,877

2,024,826 –

1,283,877 528

8

788,688

868,008

197,236

268,101

13 14 10

– 717,415 5,660,293 33,420,603

– 757,406 4,064,550 26,683,581

15,419,427 15,675 – 17,657,164

15,241,848 9,120 – 16,803,474

11 12 13 14 15 16 17

27,404,029 20,228,000 – 24,967,766 295,902 3,860,367 80,000 76,836,064

29,495,528 22,572,000 – 25,332,157 295,902 5,337,298 80,000 83,112,885

3,383,967 – 49,916,842 13,608,000 250,000 3,860,367 – 71,019,176

3,590,601 – 49,916,842 13,608,000 250,000 5,337,298 – 72,702,741

110,256,667

109,796,466

88,676,340

89,506,215

Total assets LIABILITIES AND EQUITY Current liabilities Bank overdrafts and loans Trade payables Other payables Finance leases Income tax payable Total current liabilities

18 19 20 21

1,501,009 13,647,750 3,238,422 – – 18,387,181

150,480 11,936,492 2,777,654 10,050 144,472 15,019,148

– 546 672,304 – – 672,850

– 8,248 1,156,105 – 144,472 1,308,825

Non-current liabilities Bank loans Deferred tax Total non-current liabilities

18 23

3,364,850 1,261,662 4,626,512

3,766,180 1,047,306 4,813,486

– – –

– – –

24

45,313,510 35,196,890

45,313,510 37,197,113

45,313,510 42,689,980

45,313,510 42,883,880

80,510,400

82,510,623

88,003,490

88,197,390

6,732,574 87,242,974

7,453,209 89,963,832

– 88,003,490

– 88,197,390

110,256,667

109,796,466

88,676,340

89,506,215

Capital and reserves Share capital Reserves Equity attributable to equity holders of the Company Minority interest Total equity Total liabilities and equity

See accompanying notes to financial statements.

Annu al Repo r t 2007


F i nan c ia l C o ntents

20 J urong C ement L imited

Consolidated Profit and Loss Statement Year ended March 31, 2007 Group

A nnu al R epo r t 2007

Note

2007

2006

$

$

79,320,920

70,082,372

(74,429,555)

(66,801,384)

4,891,365

3,280,988

324,783

905,478

Administrative expenses

(5,278,273)

(5,324,865)

Other operating expenses

(1,404,472)

(934,905)

Revenue

25

Cost of sales Gross profit Other operating income

26

Share of results of joint ventures

15

–

(13,804)

Share of results of associates

14

326,516

(1,504,065)

Finance costs

27

(199,811)

(182,595)

(1,339,892)

(3,773,768)

Loss before income tax Income tax expense

28

(487,208)

(343,007)

Loss for the year

29

(1,827,100)

(4,116,775)

(1,623,553)

(4,045,515)

(203,547)

(71,260)

(1,827,100)

(4,116,775)

(3.66)

(9.13)

Attributable to:

Equity holders of the Company

Minority interests

Loss per share (cents) – basic and diluted See accompanying notes to financial statements.

30


Dividend paid Dividend proposed Transfer from share premium account Balance at March 31, 2006

Total recognised income and expense for the year Funding from minority shareholders Transfer of reserves from retained earnings

Net (expense) income recognised directly in equity Net loss for the year

Balance at April 1, 2005 Loss on availablefor-sale investments Foreign currency translation differences

Group

(991,510)

991,510

45,313,510

24

991,510

$

$

44,322,000

Share premium

Share capital

31

22

Note

490,257

490,257

$

Capital reserve

2,231,660

47,820

(4,737)

(4,737)

(4,737)

2,188,577

$

Reserve fund (Note i)

354,576

354,576

(354,576)

354,576

$

Dividend reserve

1,935,161

624,679

624,679

624,679

1,310,482

$

Foreign currency translation reserve

26,392

(288,887)

(288,887)

(288,887)

315,279

$

Revaluation reserve

32,159,067

(354,576)

(47,820)

(4,045,515)

(4,045,515)

36,606,978

$

Retained earnings

82,510,623

(354,576)

(3,714,460)

(4,045,515)

331,055

619,942

(288,887)

86,579,659

$

Attributable to equity holders of the Company

7,453,209

12,540,492

(11,260)

(71,260)

60,000

60,000

(5,076,023)

$

Minority interest

89,963,832

(354,576)

12,540,492

(3,725,720)

(4,116,775)

391,055

679,942

(288,887)

81,503,636

$

Total

Finan cia l Contents

Statements of Changes in Equity

Year ended March 31, 2007 21

Jurong Cement Limited Annu al Repo r t 2007


Dividend paid

Note(i):

490,257

490,257

$

2,510,885

331,915

(52,690)

(52,690)

(52,690)

2,231,660

$

Reserve fund (Note i)

(354,576)

354,576

$

Dividend reserve

518,143

(1,417,018)

(1,417,018)

(1,417,018)

1,935,161

$

1,474,006

1,447,614

1,447,614

1,447,614

26,392

$

Revaluation reserve

30,203,599

(331,915)

(1,623,553)

(1,623,553)

32,159,067

$

Retained earnings

80,510,400

(354,576)

(1,645,647)

(1,623,553)

(22,094)

(1,469,708)

1,447,614

82,510,623

$

6,732,574

(720,635)

(203,547)

(517,088)

(517,088)

7,453,209

$

Minority interest

87,242,974

(354,576)

(2,366,282)

(1,827,100)

(539,182)

(1,986,796)

1,447,614

89,963,832

$

Total

Reserve fund is set up by the subsidiaries of the associates, established in the People’s Republic of China (“PRC”), to provide funds for staff welfare and future expansion. The utilisation of the fund is subject to government approval.

45,313,510

Transfer of reserves from retained earnings

Balance at March 31, 2007

Total recognised income and expense for the year

45,313,510

$

$

Net income (expense) recognised directly in equity Net loss for the year

31

Note

Capital reserve

A nnu al R epo r t 2007

Balance at April 1, 2006 Gain on availablefor-sale investments Foreign currency translation differences

Group

Share premium

Share capital

J urong C ement L imited

Attributable to equity holders of the Company

22

Foreign currency translation reserve

F i nan c ia l C o ntents

Statements of Changes in Equity

Year ended March 31, 2007


– –

31 24

Dividend paid

Dividend proposed

Transfer from share premium account

– – –

Net loss for the year

Total recognised income and expenses for the year

Dividend paid

See accompanying notes to financial statements.

45,313,510

Net income recognised directly in equity

Balance at March 31, 2007

45,313,510

Gain on available-for-sale investments

31

Total recognised income and expenses for the year

Balance at April 1, 2006

Net loss for the year

991,510

Net expense recognised directly in equity

(991,510)

991,510

$

$ 44,322,000

Share premium

Share capital

Note

Loss on available-for-sale investments

Balance at April 1, 2005

The Company

158,248

158,248

158,248

$

Capital reserve

1,474,006

1,447,614

1,447,614

1,447,614

26,392

(288,887)

(288,887)

(288,887)

315,279

$

Revaluation reserve

(354,576)

354,576

354,576

(354,576)

354,576

$

Dividend reserve

41,057,726

(1,286,938)

(1,286,938)

42,344,664

(354,576)

(1,497,316)

(1,497,316)

44,196,556

$

Retained earnings

88,003,490

(354,576)

160,676

(1,286,938)

1,447,614

1,447,614

88,197,390

(354,576)

(1,786,203)

(1,497,316)

(288,887)

(288,887)

90,338,169

$

Total

Finan cia l Contents

Statements of Changes in Equity

Year ended March 31, 2007

23

Jurong Cement Limited Annu al Repo r t 2007


F i nan c ia l C o ntents

24

Consolidated Cash Flow Statement Year ended March 31, 2007

J urong C ement L imited

Group

A nnu al R epo r t 2007

2007

2006

$

$

(1,339,892)

(3,773,768)

3,168,594

3,513,696

(326,516)

1,504,065

13,804

778,000

(36,940)

12,750

(7,482)

(13,175)

52,379

51,264

Dividend received from available-for-sale investments

(75,536)

(33,499)

Interest expense

199,811

182,595

Interest income

(235,756)

(202,722)

2,220,659

1,211,013

Inventories

(1,595,743)

(2,712,842)

Trade and other receivables

(7,011,996)

630,489

2,161,705

1,020,867

(6,555)

(9,120)

(143,848)

(4,231,930)

(3,441)

235,756

202,722

Interest paid

(199,811)

(182,595)

Income taxes (paid) received

(407,003)

509,032

(4,602,988)

525,718

Operating activities: Loss before income tax Adjustments for: Depreciation of property, plant and equipment Share of (profit) loss of associates Share of loss of joint ventures Provision for impairment in value of investment property Gain on disposal of joint venture Loss (Gain) on disposal of property, plant and equipment Gain on disposal of quoted bonds Property, plant and equipment written off

Operating cash flows before movements in working capital

Trade and other payables Due from an associate Due to a joint venture company Cash used in operations Interest received

Net cash (used in) from operating activities


Finan cia l Contents

Consolidated Cash Flow Statement Year ended March 31, 2007

25 Jurong Cement Limited

Group Note

2007

2006

$

$

(1,178,230)

(586,423)

18,675

36,000

177,101

2,937,720

75,536

33,499

1,871,026

(357,148)

(354,576)

(354,576)

33,440

(140,040)

(150,480)

(10,050)

(68,654)

(504,666)

(540,270)

44,933

10,927

(3,191,695)

(360,773)

Cash and cash equivalents at beginning of year

4,725,740

5,086,513

Cash and cash equivalents at end of year

1,534,045

4,725,740

6

2,895,014

4,725,740

18

(1,360,969)

1,534,045

4,725,740

Investing activities Purchase of property, plant and equipment Proceeds from disposal of a joint venture Proceeds from disposal of property, plant and equipment Proceeds from disposal of quoted bonds Dividends received from available-for-sale investments Net cash from (used in) investing activities Financing activities Dividends paid to shareholders of the Company Due to minority shareholders of a subsidiary company Repayment of bank borrowings Repayment of finance lease obligations Net cash used in financing activities Effect of foreign exchange rate changes Decrease in cash and cash equivalents

Cash and cash equivalents consist of: Cash and bank balances Bank overdraft

See accompanying notes to financial statements.

Annu al Repo r t 2007


F i nan c ia l C o ntents

26 J urong C ement L imited A nnu al R epo r t 2007

Notes to Financial Statements March 31, 2007 1

GENERAL

The Company (Registration No. 197300737Z) is incorporated in the Republic of Singapore with its principal place of business and registered office at 120 Pulau Damar Laut, Singapore 618312. The Company is listed on the Singapore Exchange Securities Trading Limited. The financial statements are expressed in Singapore dollars.

The principal activities of the Company are those of investment holding.

The principal activities of its subsidiaries, associates and joint venture are described in Notes 13, 14 and 15 to the financial statements respectively.

The consolidated financial statements of the Group and the balance sheet and statement of changes in equity of the Company for the financial year ended March 31, 2007 were authorised for issue by the Board of Directors on July 5, 2007.

2

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BASIS OF ACCOUNTING – The financial statements are prepared in accordance with the historical cost convention, except as disclosed in the accounting policies below, and are drawn up in accordance with the provisions of the Singapore Companies Act and Singapore Financial Reporting Standards (“FRS”).

In the current financial year, the Group has adopted all the new and revised FRSs and Interpretations of FRS (“INT FRS”) issued by the Council on Corporate Disclosure and Governance that are relevant to its operations and effective for annual periods beginning on or after January 1, 2006. The adoption of these new/revised FRSs and INT FRSs does not result in changes to the Group’s and Company’s accounting policies and has no material effect on the amounts reported for the current or prior years.

At the date of authorisation of these financial statements, the following FRSs, INT FRSs and amendments to FRS that are relevant to the Group and Company were issued but not effective:

FRS 40

Investment Property

INT FRS 107

Financial Instruments : Disclosure

INT FRS 110

Interim Financial Reporting and Impairment

Amendments to FRS 1 Presentation of Financial Statements on Capital Disclosures.

Consequential amendments were also made to various standards as a result of these new/ revised standards.

FRS 40 will be effective for annual periods beginning January 1, 2007. The Group presently uses the revaluation model under FRS 25. Under the revaluation model, increases in carrying amounts above a cost-based measure are recognised as a revaluation surplus in a revaluation reserve. The initial adoption of FRS 40, from the financial year starting January 1, 2007, will result in a change in the Group’s accounting policies for the investment properties, whereby under the fair value model, all changes in fair value are recognised in the profit and loss statement.

Had the Company early adopted FRS 40 in the current financial year, the short term leasehold land sublet to subsidiaries, which are currently recorded as property, plant and equipment (Note 11) would have been recorded as investment property under fair value model and there would have been no material effect on the financial statements of the Company.


Finan cia l Contents

Notes to Financial Statements March 31, 2007

27 Jurong Cement Limited

2

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)

Had the Group early adopted FRS 40 in the current financial year, there would have been no material effect on the consolidated financial statements.

As it is not possible to reasonably estimate the fair values of the investment properties for future periods, the directors are therefore unable to determine if the initial adoption of FRS 40 will have a material impact on the consolidated financial statements for the financial year ending March 31, 2008.

The application of FRS 107 and the consequential amendments to other FRS will not affect any of the amounts recognised in the financial statements, but will change the disclosures presently made in relation to the Company and Group’s financial instruments and the objectives, policies and processes for managing capital.

The directors anticipate that the adoption of the above FRSs, INT FRSs and amendments to FRSs in future periods will have no material impact on the financial statements of the Company and of the Group in the period of their initial adoption.

BASIS OF CONSOLIDATION – The consolidated financial statements incorporate the financial statements of the Company and enterprises controlled by the Company (its subsidiaries) made up to March 31 each year. Control is achieved when the Company has the power to govern the financial and operating policies of an investee enterprise so as to obtain benefits from its activities.

The results of subsidiaries acquired or disposed of during the year are included in the consolidated profit and loss statement from the effective date of acquisition or to the effective date of disposal, as appropriate.

Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used in line with those used by other members of the Group.

All significant intercompany transactions, balances, income and expenses are eliminated on consolidation.

Minority interests in the net assets of the consolidated subsidiaries are identified separately from the Group’s equity therein. Minority interests consist of the amount of those interests at the date of the original business combination (see below) and the minority’s share of changes in equity since the date of combination. Losses applicable to the minority in excess of the minority’s interest in the subsidiary’s equity are allocated against the interests of the Group except to the extent that the minority has a binding obligation and is able to make an additional investment to cover its share of those losses.

In the Company’s financial statements, investments in subsidiaries, associates and joint ventures are carried at cost less any impairment in net recoverable value that has been recognised in the profit and loss statement.

BUSINESS COMBINATIONS – The acquisition of subsidiaries is accounted for using the purchase method. The cost of the acquisition is measured at the aggregate of the fair values, at the date of exchange, of assets given, liabilities incurred or assumed, and equity instruments issued by the Group in exchange for control of the acquiree, plus any costs directly attributable to the business combination. The acquiree’s identifiable assets, liabilities and contingent liabilities that meet the conditions for recognition under FRS 103 are recognised at their fair values at the acquisition date, except for non-current assets (or disposal groups) that are classified as held for sale in accordance with FRS 105 Non-Current Assets Held for Sale and Discontinued Operations, which are recognised and measured at fair value less costs to sell.

Annu al Repo r t 2007


F i nan c ia l C o ntents

Notes to Financial Statements 28 J urong C ement L imited A nnu al R epo r t 2007

March 31, 2007

2

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)

Goodwill arising on acquisition is recognised as an asset and initially measured at cost, being the excess of the cost of the business combination over the Group’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities recognised. If, after reassessment, the Group’s interest in the net fair value of the acquiree’s identifiable assets, liabilities and contingent liabilities exceeds the cost of the business combination, the excess is recognised immediately in the consolidated profit and loss statement.

The interest of minority shareholders in the acquiree is initially measured at the minority’s proportion of the net fair value of the assets, liabilities and contingent liabilities recognised.

FINANCIAL INSTRUMENTS – Financial assets and financial liabilities are recognised on the Group’s balance sheet when the Group becomes a party to the contractual provisions of the instrument. Financial assets

Investments are recognised and de-recognised on a trade date where the purchase or sale of an investment is under a contract whose terms require delivery of the investment within the timeframe established by the market concerned, and are initially measured at fair value, net of transaction costs except for those financial assets classified as at fair value through profit or loss which are initially measured at fair value.

Other financial assets are classified into the following specified categories: “available-for-sale” financial assets and “loans and receivables”. The classification depends on the nature and purpose of financial assets and is determined at the time of initial recognition.

Available-for-sale financial assets

Certain shares held by the Group are classified as being available for sale and are stated at fair value. Gains and losses arising from changes in fair value are recognised directly in the revaluation reserve with the exception of impairment losses, interest calculated using the effective interest method and foreign exchange gains and losses on monetary assets which are recognised directly in profit or loss. Where the investment is disposed of or is determined to be impaired, the cumulative gain or loss previously recognised in the revaluation reserve is included in profit or loss for the period. Dividends on available-for-sale equity instruments are recognised in profit or loss when the Group’s right to receive payments is established. The fair value of available-for-sale monetary assets denominated in a foreign currency is determined in that foreign currency and translated at the spot rate at reporting date. The change in fair value attributable to translation differences that result from a change in amortised cost of the asset is recognised in profit or loss, and other changes are recognised in equity.

Loans and receivables

Trade receivables, loans and other receivables that have fixed or determinable payments that are not quoted in an active market are classified as “loans and receivables”. Loans and receivables are measured at amortised cost using the effective interest method less impairment. Interest is recognised by applying the effective interest rate method, except for short-term receivables when the recognition of interest would be immaterial.

Effective interest method

The effective interest method is a method of calculating the amortised cost of a financial instrument and of allocating interest income or expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts or payments through the expected life of the financial instrument, or where appropriate, a shorter period.


Finan cia l Contents

Notes to Financial Statements March 31, 2007

2

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)

Cash and cash equivalents

Cash and cash equivalents comprise cash on hand, demand deposits and bank overdrafts and are subject to an insignificant risk of changes in value.

Impairment of financial assets

Financial assets, other than those at fair value through profit or loss, are assessed for indicators of impairment at each balance sheet date. Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows of the investment have been impacted. For financial assets carried at amortised cost, the amount of the impairment is the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the original effective interest rate.

The carrying amount of the financial asset is reduced by the impairment loss directly for all financial assets with the exception of trade receivables where the carrying amount is reduced through the use of an allowance account. When a trade receivable is uncollectible, it is written off against the allowance account. Subsequent recoveries of amounts previously written off are credited to profit or loss. Changes in the carrying amount of the allowance account are recognised in profit or loss.

With the exception of available-for-sale equity instruments, if, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment loss was recognised, the previously recognised impairment loss is reversed through profit or loss to the extent the carrying amount of the investment at the date the impairment is reversed does not exceed what the amortised cost would have been had the impairment not been recognised.

In respect of available-for-sale equity instruments, any subsequent increase in fair value after an impairment loss, is recognised directly in equity. Financial liabilities and equity instruments

Classification as debt or equity

Financial liabilities and equity instruments issued by the Group are classified according to the substance of the contractual arrangements entered into and the definitions of a financial liability and an equity instrument.

Equity instruments

An equity instrument is any contract that evidences a residual interest in the assets of the Group after deducting all of its liabilities. Equity instruments are recorded at the proceeds received, net of direct issue costs.

Financial liabilities

Financial liabilities are classified as either financial liabilities “at fair value through profit or loss” or other financial liabilities.

Other financial liabilities

Trade and other payables are initially measured at fair value, net of transaction costs, and are subsequently measured at amortised cost, using the effective interest rate method, with interest expense recognised on an effective yield basis.

29 Jurong Cement Limited Annu al Repo r t 2007


F i nan c ia l C o ntents

Notes to Financial Statements 30 J urong C ement L imited A nnu al R epo r t 2007

March 31, 2007

2

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)

Interest-bearing bank loans are initially measured at fair value, and are subsequently measured at amortised cost, using the effective interest rate method. Any difference between the proceeds (net of transaction costs) and the settlement or redemption of borrowings is recognised over the term of the borrowings in accordance with the Group’s accounting policy for borrowing costs.

The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments through the expected life of the financial liability, or, where appropriate, a shorter period.

Financial guarantee contract liabilities are measured initially at their fair values and subsequently at the higher of the amount recognised as a provision and the amount initially recognised less cumulative amortisation in accordance with the revenue recognition policies described below.

Derivative financial instruments

The Group enters into derivative financial instruments (primarily foreign currency forward contracts) to manage its risks associated with foreign currency fluctuations relating to certain firm commitments and forecasted transactions. The Group does not use derivative financial instruments for speculative purposes. There is no outstanding forward foreign exchange contract as at March 31, 2007 (Note 9).

Derivative financial instruments are initially recognised at fair value on the date a derivative contract is entered into, and are subsequently remeasured to their fair value at each balance sheet date.

Changes in the fair value of derivative financial instruments that do not qualify for hedge accounting are recognised in profit or loss as they arise.

LEASES – Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.

The Group as lessor

Rental income from operating leases is recognised in profit and loss statement on a straight-line basis over the term of the relevant lease unless another systematic basis is more representative of the time pattern in which use benefit derived from the leased asset is diminished. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight-line basis over the lease term.

The Group as lessee

Assets held under finance leases are recognised as assets of the Group at their fair value at the inception of the lease or, if lower, at the present value of the minimum lease payments. The corresponding liability to the lessor is included in the balance sheet as a finance lease obligation. Lease payments are apportioned between finance charges and reduction of the lease obligation so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are charged directly to profit or loss. Contingent rentals are recognised as an expense in the period in which they are incurred.

Rentals payable under operating leases are charged to profit or loss on a straight-line basis over the term of the relevant lease unless another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed. Contingent rentals arising under operating leases are recognised as an expense in the period in which they are incurred.


Finan cia l Contents

Notes to Financial Statements March 31, 2007

31

2

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)

In the event that lease incentives are received to enter into operating leases, such incentives are recognised as a liability. The aggregate benefit of incentives is recognised as a reduction of rental expense on a straight-line basis, except where another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.

INVENTORIES – Inventories are stated at lower of cost and net realisable value. Cost comprises direct materials and where applicable, direct labour costs and those overheads that have been incurred in bringing the inventories to their present location and condition. Cost is calculated using the first-in first-out method. Net realisable value represents the estimated selling price less all estimated costs to completion and costs to be incurred in marketing, selling and distribution.

PROPERTY, PLANT AND EQUIPMENT – Property, plant and equipment are stated at cost less accumulated depreciation and any accumulated impairment losses.

Depreciation is charged so as to write off the cost or valuation of assets, over their estimated useful lives, using the straight-line method, on the following bases:

Leasehold buildings and land improvements

5% to 10%

Plant and machinery

5% to 10%

Motor vehicles

20% to 33%

Furniture, fixtures, fittings, equipment and tools

5% to 20%

The estimated useful lives and depreciation method are reviewed at each year end, with the effect of any changes in estimate accounted for on a prospective basis.

Fully depreciated assets still in use are retained in the financial statements.

Assets held under finance lease arrangements are depreciated over their expected useful lives on the same basis as owned assets or, if there is no certainty that the lessee will obtain ownership by the end of the lease term, the asset shall be fully depreciated over the shorter of the lease term and its useful life.

The gain or loss arising on the disposal or retirement of an asset is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognised in the profit and loss statement.

INVESTMENT PROPERTY – Investment property held to earn rentals and for capital appreciation is stated at periodic valuation on an open market value for existing use basis. Professional valuations are obtained on an annual basis. Any revaluation surplus arising from the revaluation of investment properties is credited to the asset revaluation reserve, except to the extent that it reverses a revaluation deficit for the same asset previously recognised as an expense, in which case the surplus is credited to the profit and loss statement to the extent of the deficit previously charged. A deficit in carrying amount arising on the revaluation of investment properties is charged as an expense to the extent that it exceeds the balance, if any, held in the asset revaluation reserve relating to a previous revaluation of that asset. The asset revaluation reserve is released to the profit and loss statement as and when the related revalued property is sold.

IMPAIRMENT OF ASSETS – At each balance sheet date, the Company and the Group review the carrying amounts of their tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). When it is not possible to estimate the recoverable amount of an individual asset, the Company and the Group estimate the recoverable amount of the cash-generating unit to which the asset belongs.

Jurong Cement Limited Annu al Repo r t 2007


F i nan c ia l C o ntents

Notes to Financial Statements 32 J urong C ement L imited A nnu al R epo r t 2007

March 31, 2007

2

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.

If the recoverable amount of an asset is estimated to be less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount. An impairment loss is recognised immediately in the profit and loss statement, unless the relevant asset is at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

When an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset in prior years. A reversal of an impairment loss is recognised as income immediately in the profit and loss statement, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

ASSOCIATES – An associate is an entity over which the Group has significant influence and that is neither a subsidiary nor an interest in a joint venture. Significant influence is the power to participate in the financial and operating policy decisions of the investee but is not control or joint control over those policies.

The results and assets and liabilities of associates are incorporated in these financial statements using the equity method of accounting. Under the equity method, investments in associates are carried in the consolidated balance sheet at cost as adjusted for post-acquisition changes in the Group’s share of the net assets of the associate, less any impairment in the value of individual investments. Losses of an associate in excess of the Group’s interest in that associate (which includes any long-term interests that, in substance, form part of the Group’s net investment in the associate) are not recognised, unless the Group has incurred legal or constructive obligations or made payments on behalf of the associates.

The operations of the associates are mainly carried out in People’s Republic of China (“PRC”). The financial statements of these associates are made up to December 31 each year, which is the local statutory financial year end of these associates. For the purpose of applying the equity method of accounting, the financial statements of the associates for the year ended December 31 have been used, and adjustments have been made for the effects of significant transactions or events that occur between the associates’ year end at December 31 and the investors’ year end at March 31.

Where the accounting policies of associates do not conform with those of the Group, adjustments are made where the amounts involved are considered significant to the Group.

Where a Group entity transacts with an associate of the Group, profits and losses are eliminated to the extent of the Group’s interest in the relevant associate.

INTERESTS IN JOINT VENTURES – A joint venture is a contractual arrangement whereby the Group and other parties undertake an economic activity that is subject to joint control, that is when the strategic financial and operating policy decisions relating to the activities require the unanimous consent of the parties sharing control. The equity method is used.

Where the Group transacts with its jointly controlled entities, unrealised profits and losses are eliminated to the extent of the Group’s interest in the joint venture.


Finan cia l Contents

Notes to Financial Statements March 31, 2007

33

2

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)

Jurong Cement Limited

PROVISIONS – Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that the Group will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation.

Annu al Repo r t 2007

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the balance sheet date, taking into account the risks and uncertainties surrounding the obligation. Where a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows.

When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, the receivable is recognised as an asset if it is virtually certain that reimbursement will be received and the amount of the receivable can be measured reliably.

REVENUE RECOGNITION – Revenue is measured at the fair value of the consideration received or receivable. Revenue is reduced for estimated customer returns, rebates and other similar allowances.

Sale of goods

Revenue from the sale of goods is recognised when all the following conditions are satisfied: • the Group has transferred to the buyer the significant risks and rewards of ownership of the goods; • the Group retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold; • the amount of revenue can be measured reliably; • it is probable that the economic benefits associated with the transaction will flow to the entity; and • the costs incurred or to be incurred in respect of the transaction can be measured reliably.

Rendering of services

Revenue from technical services is recognised when services are rendered.

Interest income

Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that asset’s net carrying amount.

Dividend income

Dividend income from investments is recognised when the shareholders’ rights to receive payment have been established.

RETIREMENT BENEFIT COSTS – Payments to defined contribution retirement benefit plans are charged as an expense as they fall due. Payments made to state-managed retirement benefit schemes, such as the Singapore Central Provident Fund, are dealt with as payments to defined contribution plans where the Group’s obligations under the plans are equivalent to those arising in a defined contribution retirement benefit plan.

EMPLOYEE LEAVE ENTITLEMENT – Employee entitlements to annual leave are recognised when they accrue to employees. A provision is made for the estimated liability for annual leave as a result of services rendered by employees up to the balance sheet date.

INCOME TAX – Income tax expense represents the sum of the tax currently payable and deferred tax.


F i nan c ia l C o ntents

Notes to Financial Statements 34 J urong C ement L imited A nnu al R epo r t 2007

March 31, 2007

2

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)

The tax currently payable is based on taxable profit for the year. Taxable profit differs from profit as reported in the profit and loss statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are not taxable or tax deductible. The Group’s liability for current tax is calculated using tax rates (and tax laws) that have been enacted or substantively enacted in countries where the Company and its subsidiaries operate by the balance sheet date.

Deferred tax is recognised on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.

Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries and associates, and interests in joint ventures, except where the Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future.

The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.

Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset realised based on the tax rates (and tax laws) that have been enacted or substantively enacted by the balance sheet date. Deferred tax is charged or credited to profit or loss, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Group intends to settle its current tax assets and liabilities on a net basis.

Current and deferred tax are recognised as an expense or income in profit or loss, except when they relate to items credited or debited directly to equity, in which case the tax is also recognised directly in equity.

FOREIGN CURRENCY TRANSACTIONS AND TRANSLATION – The individual financial statements of each Group entity are measured and presented in the currency of the primary economic environment in which the entity operates (its functional currency). The consolidated financial statements of the Group and the balance sheet of the Company are presented in Singapore dollars, which is the functional currency of the Company, and the presentation currency for the consolidated financial statements.

In preparing the financial statements of the individual entities, transactions in currencies other than the entity’s functional currency are recorded at the rates of exchange prevailing on the date of the transaction. At each balance sheet date, monetary items denominated in foreign currencies are retranslated at the rates prevailing on the balance sheet date. Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rates prevailing on the date when the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated.


Finan cia l Contents

Notes to Financial Statements March 31, 2007

2

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)

Exchange differences arising on the settlement of monetary items, and on retranslation of monetary items are included in profit or loss for the period. Exchange differences arising on the retranslation of non-monetary items carried at fair value are included in profit or loss for the period except for differences arising on the retranslation of non-monetary items in respect of which gains and losses are recognised directly in equity. For such non-monetary items, any exchange component of that gain or loss is also recognised directly in equity.

For the purpose of presenting consolidated financial statements, the assets and liabilities of the Group’s foreign operations (including comparatives) are expressed in Singapore dollars using exchange rates prevailing on the balance sheet date. Income and expense items (including comparatives) are translated at the average exchange rates for the period, unless exchange rates fluctuated significantly during that period, in which case the exchange rates at the dates of the transactions are used. Exchange differences arising, if any, are classified as equity and transferred to the Group’s translation reserve. Such translation differences are recognised in profit or loss in the period in which the foreign operation is disposed of.

On consolidation, exchange differences arising from the translation of the net investment in foreign entities (including monetary items that, in substance, form part of the net investment in foreign entities), are taken to the foreign currency translation reserve.

3

CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY Critical judgements in applying the entity’s accounting policies

In the application of the Group’s accounting policies, which are described in Note 2, management is required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

Management is of the opinion that there are no critical judgements involved that have a significant effect on the amounts recognised in the financial statements apart from those involving estimates, which are dealt with below. Key sources of estimation uncertainty

The key assumptions concerning the future, and other key sources of estimation uncertainty at the balance sheet date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are discussed below.

Impairment of property, plant and equipment

Determining whether the property, plant and equipment (Note 11) are impaired requires an estimation of value in use of the property, plant and equipment. The value in use calculation requires the management to estimate the future cash flows and an appropriate discount rate in order to calculate the present value of future cash flows. The management has evaluated such estimates and is confident that no allowance for impairment is necessary.

35 Jurong Cement Limited Annu al Repo r t 2007


F i nan c ia l C o ntents

Notes to Financial Statements 36

March 31, 2007

J urong C ement L imited

3

CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY (cont’d)

A nnu al R epo r t 2007

Impairment of investment property

The management reviews the recoverable amount of its investment property. During the year, management considered the recoverability and market value of its investment property (Note 12). Based on a market valuation carried out by an independent professional valuer, management impaired the carrying amount of investment property by $778,000 (2006 : S$Nil). This situation will be closely monitored, and adjustments made in future periods, if market activity indicates that such adjustments are appropriate.

Provision for onerous contract

An onerous contract is considered to exist where the Group has a contract under which the unavoidable costs of meeting the obligations under the contract exceed the economic benefits expected to be received under it.

Management uses fixed contract prices and total estimated costs to be incurred on these fixed price contracts to estimate the level of provision required for the onerous contracts.

After taking into account fixed contract prices and total estimated costs to be incurred, management is satisfied that no provision for onerous contract is required (Note 19) for the current financial year.

Depreciation of property, plant and equipment

The management exercises its judgement in estimating the useful lives of the depreciable assets. Depreciation is provided to write off the cost of property, plant and equipment (Note 11) over the estimated useful lives, using the straight-line method.

Allowance for doubtful receivables

The policy for allowance for doubtful receivables of the company is based on the evaluation of collectibility and on management’s judgement. A considerable amount of judgement is required in assessing the ultimate realisation of these receivables, including the current creditworthiness, the past collection history of each customer and ongoing dealings with these parties. If the financial conditions of the counterparties with which the company were to deteriorate, resulting in an impairment of their ability to make payments, additional allowance (Note 7) may be required.

4

FINANCIAL RISKS AND MANAGEMENT

The Group and the Company are exposed to financial risks arising in the normal course of business. i)

Foreign currency risk

The Group incurs foreign currency risk on transactions and balances that are denominated in currencies other than Singapore dollars. The currencies giving rise to this risk are primarily Chinese renminbi, United States dollars, Hong Kong dollars, Malaysian ringgit and Australian dollars.

The Group primarily utilises forward exchange contracts with maturity of less than twelve months to manage such foreign currency denominated commitments.


Finan cia l Contents

Notes to Financial Statements March 31, 2007

4

FINANCIAL RISKS AND MANAGEMENT (cont’d) ii)

Interest rate risk

The Group’s exposure to changes in interest rate relates primarily to interest-earning financial assets and interest-bearing financial liabilities with financial institutions.

Information relating to the Group’s interest rate exposure and contractual maturity and repricing dates of financial assets and liabilities are disclosed in the respective notes to the financial statements.

iii)

Credit risk

The Group places its bank balances with credit worthy institutions. The Group performs ongoing credit evaluation of its customers’ financial condition and generally does not require collateral. This evaluation includes assessing and valuing customers’ credit reliability and periodic review of their financial status to determine credit limits to be granted.

The Group has no significant concentration of credit risk. Its credit risk exposure is spread over a large number of counterparties and customers.

The maximum exposure to credit risk in the event that the counterparties fail to perform their obligations as at the end of the financial year in relation to each class of recognised financial assets is the carrying amount of these assets stated in the balance sheet.

iv)

Liquidity risk

The Group and the Company monitor their cash flows actively and ensure that credit facilities are in place to meet their obligations as and when they fall due.

v)

Fair value of financial assets and financial liabilities

The carrying amounts of cash and cash equivalents, trade and other current receivable and payables and other liabilities and amounts payable approximate their respective fair values due to the relatively short-term maturity of these financial instruments. The fair values of other classes of financial assets and liabilities are disclosed in the respective notes to financial statements.

37 Jurong Cement Limited Annu al Repo r t 2007


F i nan c ia l C o ntents

Notes to Financial Statements 38 J urong C ement L imited A nnu al R epo r t 2007

March 31, 2007

5

RELATED PARTY TRANSACTIONS

Related parties are entities with common direct or indirect shareholders and/or directors. Parties are considered to be related if one party has the ability to control the other party or exercise significant influence over the other party in making financial and operating decisions.

Some of the transactions and arrangements are with related parties and the effect of these on the basis determined between the parties are reflected in these financial statements. The intercompany balances are unsecured, interest-free and repayable on demand.

Significant transactions with related parties were as follows: 2007 $

2006 $

Retirement benefit to a former managing director

630,000

Sale of motor vehicle to a former managing director

113,700

Advisory and signatory fee to a former managing director

50,000

Ex-gratia gratuity paid to a former executive director

262,091

Ex-gratia gratuity paid to a former key management personnel

195,443

Compensation of directors and key management personnel The remuneration of directors and other members of key management during the year was as follows: GROUP 2007 $

2006 $

630,000

Gratuity benefits

457,534

Short-term benefits

959,821

947,615

35,695

36,905

Retirement benefits

Post-employment benefits

The remuneration of directors and key management is determined by the remuneration committee having regard to the performance of individuals and market trends.

6

CASH AND BANK BALANCES GROUP

Cash and bank balances Fixed deposits Total

COMPANY

2007 $

2006 $

2007 $

2006 $

2,701,131

2,399,206

1,830,943

80,395

193,883

2,326,534

193,883

1,203,482

2,895,014

4,725,740

2,024,826

1,283,877


Finan cia l Contents

Notes to Financial Statements March 31, 2007

39

6

CASH AND BANK BALANCES (Cont’d)

Jurong Cement Limited

Bank balances and cash comprise cash held by the Group and short-term bank deposits with an original maturity of three months or less. The carrying amounts of these assets approximate their fair values.

Annu al Repo r t 2007

Fixed deposit with a bank mature within 4 (2006 : 1) months from the financial year end. This fixed deposit would be drawn down without having to incur significant cost. Interest rates vary from 5.25% to 5.9375% (2006 : 1.615% to 5.3063%) per annum which are also the effective interest rates. The Group and Company’s cash and bank balances that are not denominated in the functional currencies of the respective entities are as follows: GROUP 2007 $

2006 $

2007 $

2006 $

1,218,281

95,229

Australian dollars

193,883

173,756

193,883

173,756

Malaysian ringgit

23,531

43,981

14,134

40,058

Chinese renminbi

43,584

5,505

38,513

United States dollars

7

COMPANY

TRADE RECEIVABLES GROUP

COMPANY

2007 $

2006 $

2007 $

2006 $

Outside parties

27,312,107

20,343,173

18,502

19,030

Allowance for doubtful debts

(3,952,914)

(4,075,296)

(18,502)

(18,502)

Total

23,359,193

16,267,877

528

The average credit period on sales of goods is 91 days (2006 : 86 days).

The allowance has been determined by reference to payment history of specific debtors.

The Group’s trade receivables that are not denominated in the functional currencies of the respective entities are as follows: GROUP

United States dollars

2007 $

2006 $

67,015

54,564


F i nan c ia l C o ntents

Notes to Financial Statements 40 J urong C ement L imited

March 31, 2007

8

OTHER RECEIVABLES, DEPOSITS AND PREPAYMENTS

A nnu al R epo r t 2007

GROUP 2007 $

2006 $

2007 $

2006 $

81,552

267,299

65,988

162,107

Deposits

255,318

200,859

Prepayments

363,293

310,958

48,668

44,560

88,525

88,892

82,580

61,434

788,688

868,008

197,236

268,101

Staff loans

Other receivables Total

9

COMPANY

DERIVATIVE FINANCIAL INSTRUMENTS The Group utilises forward foreign exchange contracts to manage its foreign currency exposure. The instruments purchased are primarily denominated in United States dollars. At the balance sheet date, the total notional amount of outstanding forward foreign exchange contracts to which the Group is committed are as follows: GROUP AND COMPANY 2007

2006

Buy

USD 6,181,692

Sell

SGD 10,115,645

These arrangements are designed to address significant exchange exposures and are renewed on a revolving basis as required.

At March 31, 2006, the fair value of the Group’s currency derivatives had not been accounted for as the values were not significant. The values were determined based on quoted market prices for equivalent instruments at the balance sheet date.

10

INVENTORIES GROUP 2007 $

2006 $

509,746

341,234

Raw materials

5,150,547

3,723,316

Total

5,660,293

4,064,550

Finished goods


11

Additions

Disposals/Write-offs

Exchange difference

At March 31, 2006

Additions

Disposals/Write-offs

Exchange difference

At March 31, 2007

Depreciation for the year

Disposals/Write-offs

At March 31, 2006

Depreciation for the year

Disposals/Write-offs

At March 31, 2007

17,953,549 19,178,181

At March 31, 2006

14,472,490

1,985,043

12,487,447

(1,806,431)

2,153,516

12,140,362

32,426,039

760,411

31,665,628

(1,813,057)

285,380

9,398,220

8,573,349

6,572,336

(29,250)

880,691

5,720,895

(19,751)

879,823

4,860,823

15,145,685

(78,000)

104,570

15,119,115

(61,525)

92,019

15,088,621

$

$

33,193,305

Plant and machinery

Leasehold buildings and land improvements

At March 31, 2007

Carrying amount:

At April 1, 2005

Accumulated depreciation:

At April 1, 2005

Cost:

GROUP

PROPERTY, PLANT AND EQUIPMENT

196,214

342,987

7,716,577

78,520

7,638,057

(572,370)

230,101

7,980,326

8,059,564

225,293

7,834,271

(715,003)

13,936

8,535,338

$

Motor vehicles

722,913

534,144

2,601,694

(210,446)

224,340

2,587,800

(138,306)

250,256

2,475,850

3,135,838

(6)

(262,825)

87,956

3,310,713

15

(168,156)

195,088

3,283,766

$

Furniture fixtures, fittings, equipment and tools

29,495,528

27,404,029

31,363,097

(239,696)

3,168,594

28,434,199

(2,536,858)

3,513,696

27,457,361

58,767,126

(6)

(340,825)

1,178,230

57,929,727

15

(2,757,741)

586,423

60,101,030

$

Total

Finan cia l Contents

Notes to Financial Statements

March 31, 2007

41

Jurong Cement Limited Annu al Repo r t 2007


Additions

Disposals/Write-offs

At March 31, 2006

Additions

Disposals/Write-offs

At March 31, 2007

Depreciation for the year

Disposals/Write-offs

At March 31, 2006

Depreciation for the year

Disposals/Write-offs

At March 31, 2007

At March 31, 2007

At March 31, 2006

Carrying amount:

At April 1, 2005

Accumulated depreciation:

At April 1, 2005

3,295,424

3,118,809

412,104

176,615

235,489

176,617

58,872

3,530,913

3,530,913

3,530,913

90,406

6,458

6,458

(30,255)

8,644

21,611

96,864

96,864

(172,888)

172,888

$

$

295,177

174,752

1,035,571

(203,142)

106,953

1,131,760

(8,113)

111,584

1,028,289

1,210,323

(250,279)

33,665

1,426,937

(12,258)

113,018

1,326,177

$

Furniture fixtures, fittings, equipment and tools $

Total

3,590,601

3,383,967

1,454,133

(203,142)

290,026

1,367,249

(38,368)

296,845

1,108,772

4,838,100

(250,279)

130,529

4,957,850

(185,146)

113,018

5,029,978

A nnu al R epo r t 2007

Cost:

Motor vehicles

Leasehold buildings and land improvements

J urong C ement L imited

COMPANY

PROPERTY, PLANT AND EQUIPMENT (Cont’d)

42

11

F i nan c ia l C o ntents

Notes to Financial Statements

March 31, 2007


Finan cia l Contents

Notes to Financial Statements March 31, 2007

43 Jurong Cement Limited

11

PROPERTY, PLANT AND EQUIPMENT (Cont’d)

The property, plant and equipment of the Group have been pledged for banking facilities granted to the Group (Note 18).

In 2006, net book value of motor vehicles for the Group amounting to $84,718 were acquired under finance leases (Note 21).

The properties held by the Group are as follows:

12

Approximate site area

Property

Location

Tenure

Short-term leasehold land – owner occupied

State Foreshore Mukim No. 6 Peng Kang Pulau Damar Laut

20 years and 9 months lease from May 1, 1993

Short-term leasehold land – sublet to subsidiaries

17A Pandan Road Singapore 609268

20 years lease from 6,956 sq. m. March 1, 2004

6,186 sq. m.

INVESTMENT PROPERTY GROUP 2007 $

2006 $

22,572,000

22,842,000

(778,000)

Foreign currency translation difference

(1,566,000)

(270,000)

Balance at end of year

20,228,000

22,572,000

At valuation: Balance at beginning of year Provision for impairment in value of investment property

The Group’s investment property was valued at March 31, 2007 by a firm of independent professional valuers, Debenham Tie Leung Limited, on an open market value basis.

The investment property held by a subsidiary has been pledged as security for a bank loan granted to the subsidiary (Note 18).

The property rental income earned by the Group from its investment property, which is leased out under operating lease, amounted to $315,238 (2006 : $113,438). Direct operating expenses arising on the investment property in the year amounted to $46,727 (2006 : $116,494). Approximate site area

Property

Location

Tenure

Short-term leasehold property

Units 1-10 8th floor Island Place Tower North Point Hong Kong

52 years lease from 1,866.4 sq. m. June 22, 1995

Annu al Repo r t 2007


F i nan c ia l C o ntents

Notes to Financial Statements 44 J urong C ement L imited

March 31, 2007

13

SUBSIDIARIES

A nnu al R epo r t 2007

Company

2007 $

2006 $

Unquoted equity shares, at cost

26,171,436

26,171,436

Impairment loss

(9,734,027)

(9,734,027)

Carrying amount

16,437,409

16,437,409

Loans to subsidiaries

41,979,433

41,979,433

Provision for non-recoverability of loan

(8,500,000)

(8,500,000)

33,479,433

33,479,433

Interests in subsidiaries

49,916,842

49,916,842

Due from subsidiaries (current)

15,419,427

15,241,848

Details of the Company’s subsidiaries at March 31, 2007 are as follows:

Name of Company

Country of Proportion Proportion incorporation of ownership of votiong and operation interest power held

Principal activities

2007 2006 2007 2006 % % % % Held by the COMPANY Jurong Readymix Concrete Pte Ltd

Singapore

100

100

100

100

Dealers in ready mix concrete

Jurong Cement Beijing Investment Pte Ltd

Singapore

100

100

100

100

Investment holding company

Jurong Cement Bulk Terminal Pte Ltd

Singapore

100

100

100

100

Business of owners and operators of transportation and distribution facilities, warehouses, storage terminal facilities and sellers of cement

Jurong Cement Manufacturing Pte Ltd

Singapore

100

100

100

100

Dormant

Jurong Cement Hongkong Singapore Investment Pte Ltd

100

100

100

100

Investment holding company

Jurong Cement Shanghai Investment Pte Ltd

Singapore

100

100

100

100

Investment holding company

Concrete Connections Pte Ltd

Singapore

100

100

100

100

Beijing Eastern Jurong Cement Technical Development Pte Ltd (2)

The People’s Republic of China

100

100

100

100

Manufacturers and dealers in dry mix mortar products Cement production, process, design and modification, technical operations and training advisory services

Max Billion Finance Limited (1)

Hong Kong

60

60

60

60

Property investment holding

Jurong Premier Concrete Pte Ltd

Singapore

100

100

100

100

Dealers in pre-mixed concrete

Held by subsidiaries


Finan cia l Contents

Notes to Financial Statements March 31, 2007

45

13

SUBSIDIARIES (Cont’d)

All the companies are audited by Deloitte & Touche, Singapore except for the subsidiaries that are indicated as follows: Audited by Deloitte & Touche, Hong Kong.

(1)

(2)

Audited by another firm of auditors, Beijing Xinghua Certified Public Accountants, PRC.

The loans to and amount due from subsidiaries are non-trade in nature, unsecured and interest-free.

The loans to subsidiaries amounting to $33,479,433 in 2007 and 2006 are, in substance, a part of the Company’s net investment in subsidiaries. The balance is stated at cost less accumulated impairment. The settlement of the amount is neither planned nor likely to occur in the foreseeable future.

14

ASSOCIATES

Unquoted equity shares, at cost

GROUP

COMPANY

2007 $

2006 $

2007 $

2006 $

13,608,079

13,608,079

13,608,000

13,608,000

1,924,241

1,929,640

4,017,499

3,972,582

19,549,819

19,510,301

5,417,947

5,821,856

24,967,766

25,332,157

13,608,000

13,608,000

717,415

757,406

15,675

9,120

Share of post acquisition

accumulated profits

Share of associates

foreign currency translation and other reserves

Due from associates Net Due from associates (current)

13,608,000 –

13,608,000 –

The current and non-current amounts due from associates are non-trade in nature, unsecured and interest-free.

The non-current amounts due from associates amounting to $5,417,947 (2006 : $5,821,856) is, in substance, a part of the net investment in an associate and is stated at cost. The settlement of the amount is neither planned nor likely to occur in the foreseeable future.

Jurong Cement Limited Annu al Repo r t 2007


F i nan c ia l C o ntents

Notes to Financial Statements 46 J urong C ement L imited A nnu al R epo r t 2007

March 31, 2007

14

ASSOCIATES (Cont’d)

Details of the Group’s associates at March 31, 2007 are as follows:

Name of Company

Country of Incorporation and Operation

Proportion of ownership interest

Proportion of voting power held

Principal Activities

2007 %

2006 %

2007 %

2006 %

40

40

40

40 Investment holding

Held by the COMPANY Sin Chang An Holdings Pte Ltd (1)

Singapore

Held by subsidiaries China Singkong Investment Holdings Ltd (2)

The British Virgin Islands

31.58

31.58

31.58

31.58 Investment holding

China Singkong Development Holdings Ltd (2)

The British Virgin Islands

23.16

23.16

23.16

23.16 Investment holding

China Singkong The British Ma Lu Virgin Islands Development Ltd (2)

23.16

23.16

23.16

23.16 Investment holding

Shanghai Singkong The British Industrial Park Virgin Islands Development Co Ltd (2)

23.16

23.16

23.16

23.16 Investment holding

Beijing Cement Investment Ltd (2)

The British Virgin Islands

31.58

31.58

31.58

31.58 Investment holding

China Singkong Mentougou Cement Investment Ltd (2)

The British Virgin Islands

31.58

31.58

31.58

31.58 Investment holding

Beijing Singkong Cement Co., Ltd (4)

The People’s Republic of China

22.11

22.11

22.11

22.11 Production and sales of cement and related products

Beijing Singkong Dry Motar Materials Co. Ltd (4)

The People’s Republic of China

23.05

23.05

23.05

23.05 Manufacturers and dealers in dry mixed mortar products

Sin Chang An Holdings Pte Ltd (1)

Singapore

40

40

40

40 Investment holding

Sin Chang An Investment Pte Ltd (1)

Singapore

40

40

40

40 Investment holding

Held by Associates


Finan cia l Contents

Notes to Financial Statements March 31, 2007

14

47 Jurong Cement Limited

ASSOCIATES (Cont’d)

Name of Company

Country of Incorporation and Operation

Proportion of ownership interest

Proportion of voting power held

2007 %

2006 %

2007 %

Principal Activities

2006 %

Held by Associates Zhejiang Shanying Cement Co., Ltd (3)

The People’s Republic of China

24

24

24

24 Production and sales of cement and related products

Zhejiang Jurong Cement Co., Ltd (3)

The People’s Republic of China

24

24

24

24 Production and sales of cement and related products

Changxing The People’s Republic Lingying Building Materials Co. Ltd (3) of China

23.76

23.76

23.76

23.76 Production and sales of cement and related products

Notes on auditors Audited by another firm of auditors, BDO Raffles, Singapore.

(1)

Audited by another firm of auditors, Pang Hon & Partner, Hong Kong.

(2)

Audited by another firm of auditors, Shanghai Zhonghua, Certified Public Accountants, PRC, a member of BDO International.

(3)

Audited by another firm of auditors, Beijing Hengweixing Certified Accountants, PRC.

(4)

Summarised financial information in respect of the Group’s associates is set out below: 2007 $ Total assets

2006 $

160,290,298

163,712,135

(110,250,927)

(114,116,835)

Net assets

50,039,371

49,595,300

Group’s share of associates’ net assets

19,549,819

19,510,301

106,221,209

84,605,059

Profit (Loss) for the year

840,228

(3,992,183)

Group’s share of associates’ profit (loss) for the year

326,516

(1,504,065)

Total liabilities and minority interests

Revenue

Annu al Repo r t 2007


F i nan c ia l C o ntents

Notes to Financial Statements 48 J urong C ement L imited

March 31, 2007

15

JOINT VENTURE

A nnu al R epo r t 2007

Unquoted equity shares, at cost Group’s share of post acquisition accumulated profits

GROUP

COMPANY

2007 $

2006 $

2007 $

2006 $

250,000

250,000

250,000

250,000

45,902

45,902

295,902

295,902

250,000

250,000

Details of the Group’s joint venture at March 31, 2007 are as follows:

Name of Company

Country of Incorporation and Operation

Proportion of ownership interest

Proportion of voting power held

2007 %

2006 %

2007 %

50

50

50

Principal Activities

2006 %

Held by the COMPANY Cement Singapore Bulk Terminal Pte Ltd *

50 Provision of transportation and distribution facilities, warehousing and storage terminal facilities

* Cement Bulk Terminal Pte Ltd was in the process of liquidation since the previous financial year. On June 18, 2007, the liquidation is completed.

The Group’s share of the results and assets and liabilities of the joint venture are as follows: 2007 $

2006 $

Current assets

605,222

605,222

Current liabilities

(13,418)

(13,418)

Non-current liabilities

591,804

591,804

Group’s share of joint ventures’ net assets

295,902

295,902

Revenue

472,315

Loss after taxation

(27,608)

Group’s share of joint venture’s loss for the year

(13,804)

Non-current assets


Finan cia l Contents

Notes to Financial Statements March 31, 2007

16

49 Jurong Cement Limited

AVAILABLE-FOR-SALE INVESTMENTS GROUP AND COMPANY 2007 $

2006 $

Quoted equity shares, at fair value Quoted bonds, at fair value

3,860,367 _

2,442,616 2,894,682

Total available-for-sale investments

3,860,367

5,337,298

The investments in quoted equity shares at fair value include an impairment loss of $6,600,000 (2006 : $6,600,000).

The investments in quoted bonds had an effective interest rate of 5% (2006 : 5%) per annum, and an original maturity date of September 6, 2011. The bonds were disposed during the current financial year with a gain recorded of $13,175.

The investments above include investments in quoted equity shares that offer the Group the opportunity for returns through dividend and interest incomes and fair value gains. They have no fixed maturity or coupon rate. The fair value of these securities are based on the quoted closing market prices on the last market day of the financial year.

The Group and the Company’s available-for-sale investments that are not denominated in the functional currency of the respective entities are as follows: GROUP AND COMPANY

Malaysian ringgit

17

2007 $

2006 $

3,827,166

2,425,800

CLUB MEMBERSHIP

Club membership, at fair value

GROUP 2007 $

2006 $

80,000

80,000

The investment in club membership at fair value includes an impairment loss of $50,000 (2006 : $50,000).

Annu al Repo r t 2007


F i nan c ia l C o ntents

Notes to Financial Statements 50 J urong C ement L imited

March 31, 2007

18

BANK OVERDRAFTS AND LOANS

A nnu al R epo r t 2007

GROUP 2007 $

2006 $

Bank overdrafts

1,360,969

Bank loans

3,504,890

3,916,660

4,865,859

3,916,660

The borrowings are repayable as follows:

On demand or within one year

GROUP 2007 $

2006 $

1,501,009

150,480

In the second year In the third year

140,040

150,480

3,224,810

150,480

3,465,220

4,865,859

3,916,660

(1,501,009)

(150,480)

3,364,850

3,766,180

In the fourth year Less: Amounts due for settlement within 12 months (shown under current liabilities) Amount due for settlement after 12 months

The Group’s bank loans that are not denominated in the functional currencies of the respective entities are as follows:

Hong Kong dollars

GROUP 2007 $

2006 $

3,504,890

3,916,660

The bank loan is secured by a mortgage on the investment property of a subsidiary (Note 12) and an assignment of rental from the investment property.

The bank loan bears interest at 4.69% to 5.41% (2006 : 2.73% to 5.21%) per annum and is repayable in 20 quarterly instalments commencing from August 2004.

The total bank loan at March 31, 2007 for the Group of $3,504,890 (2006 : $3,916,660) is subject to repricing within six months from the end of the financial year.

The Group’s bank overdrafts and other banking facilities to the extent of $8 million (2006 : $8 million) are secured by way of a registered debenture with a fixed and floating charge over the Company’s assets for $5 million and negative pledge over the assets of the Company.

The bank overdrafts bear interest at 5.5% (2006 : Nil%) per annum.

The carrying amounts of bank borrowings approximate their fair values due to either the relatively short term maturity of these borrowings or the interest rates approximate the market rates prevailing at the balance sheet date.


Finan cia l Contents

Notes to Financial Statements March 31, 2007

19

51 Jurong Cement Limited

TRADE PAYABLES

Trade creditors Provision for onerous contract

GROUP

COMPANY

2007 $

2006 $

2007 $

2006 $

13,647,750

11,201,342

546

8,248

735,150

13,647,750

11,936,492

546

8,248

The average credit period on purchases of goods is 2 months (2006 : 2 months).

Provision for onerous contract in 2006 pertained to expected losses to be incurred in 2007 arising from a fixed price contract with a third party customer.

The Group’s trade payables that are not denominated in the functional currencies of the respective entities are as follows:

United States dollars

GROUP 2007 $

2006 $

3,195,480

1,175,805

Malaysian ringgit

37,039

Denmark Kroner

3,470

3,470

Annu al Repo r t 2007


F i nan c ia l C o ntents

Notes to Financial Statements 52 J urong C ement L imited

March 31, 2007

20

OTHER PAYABLES

A nnu al R epo r t 2007

COMPANY

2007 $

2006 $

2007 $

2006 $

Accrued retirement benefit for a former managing director

210,000

420,000

210,000

420,000

Rental deposit

198,962

101,477

Accrued operating expenses

877,626

724,604

147,500

148,100

Accrued unutilised leave Accrued Directors’ fees and bonuses Accrued damages Employee reimbursement and CPF payable Legal and professional fees payable Repair and maintenance expense payable Property, plant and equipment purchase payable

144,399

158,722

33,577

43,366

192,736

253,150

192,736

253,150

120,000

120,000

60,198

135,063

2,510

86,344

56,554

142,199

Others

GROUP

426,567

157,594

392,859

558,521

564,845

85,981

205,145

3,238,422

2,777,654

672,304

1,156,105

The Group’s other payables that are not denominated in the functional currencies of the respective entities are as follows:

United States dollars

GROUP 2007 $

2006 $

187,230


Finan cia l Contents

Notes to Financial Statements March 31, 2007

21

53 Jurong Cement Limited

FINANCE LEASES

Annu al Repo r t 2007

Group Minimum lease payments

Present value of minimum lease payments

2007 $

2006 $

2007 $

2006 $

Within one year

10,895

10,050

Less: Future finance charges

(845)

Present value of lease obligations

10,050

10,050

Less: Amount due for settlement within 12 months (shown under current liabilities)

(10,050)

Amount due for settlement after 12 months

Amounts payable under finance leases:

It is the Group’s policy to lease certain of its motor vehicles under finance leases. The leases expired during the current financial year. For the year ended March 31, 2007, the average effective borrowing rate was 2.875% to 3.5% (2006 : 2.875% to 3.5%) per annum. Interest rates are fixed at the contract date and thus expose the Group to fair value interest rate risk. All leases are on fixed repayment basis and no arrangements have been entered into for contingent rental payments.

All lease obligations are denominated in Singapore dollars.

The fair value of the Group’s lease obligations approximates their carrying amount.

The Group’s obligations under finance leases were secured by the lessors’ title to the leased assets in 2006 (Note 11).

22

DUE TO MINORITY SHAREHOLDERS OF A SUBSIDIARY

The amounts due to minority shareholders of a subsidiary are, in substance, a part of the net investment in the subsidiary and the amounts had been reclassified from long-term liability to minority interest in equity in the previous financial year.


F i nan c ia l C o ntents

Notes to Financial Statements 54 J urong C ement L imited A nnu al R epo r t 2007

March 31, 2007

23

DEFERRED TAX

The following are the major deferred tax liabilities and assets recognised by the Group, and the movements thereon, during the current and prior reporting periods:

Accelerated tax depreciation

Unabsorbed capital allowances

Tax losses

Total

$

$

$

$

2,945,403

(1,937,757)

(56,403)

951,243

GROUP At April 1, 2005 Adjustment to prior year (Credit) Charge to profit or loss for the year As March 31, 2006 Adjustment to prior year (Credit) Charge to profit or loss for the year At March 31, 2007

(113,690)

(113,690)

(287,932)

497,685

2,543,781

(1,440,072)

(56,403)

1,047,306

(48,103)

214,064

(21)

165,940

(512,831)

555,605

5,642

48,416

1,982,847

(670,403)

(50,782)

1,261,662

209,753

Certain deferred tax assets and liabilities have been offset in accordance with the Group and Company’s accounting policy. The following is the analysis of the deferred tax balances (after offset) for balance sheet purposes:

Deferred tax liabilities Deferred tax assets

24

2007

2006

$

$

1,982,847 (721,185)

2,543,781 (1,496,475)

1,261,662

1,047,306

SHARE CAPITAL 2007

2006

Number of ordinary shares

2007

2006

$

$

Issued and paid up: At beginning of year Transfer from share premium account

44,322,000 –

44,322,000 –

45,313,510 –

44,322,000 991,510

At end of year

44,322,000

44,322,000

45,313,510

45,313,510

The Company has one class of ordinary shares which carry no right to fixed income.

As a result of the Companies (Amendment) Act 2005 which came into effect on January 30, 2006, the concept of authorised share capital and par value had been abolished. Any amount standing to the credit of share premium account had been transferred to the Company’s share capital account on the effective date.


Finan cia l Contents

Notes to Financial Statements March 31, 2007

25

55 Jurong Cement Limited

REVENUE GROUP 2007 $

2006 $

Sales of goods

78,363,155

69,571,481

Rental income

525,397

189,064

75,536

33,499

235,756

202,722

121,076

85,606

79,320,920

70,082,372

Dividend received from available-for-sale investments Interest income Technical service income

26

OTHER OPERATING INCOME GROUP 2007 $

2006 $

247,850

Write back of long outstanding payables

64,844

249,335

Reimbursement of plant set up cost by a customer

62,917

30,146

Write back of allowance for doubtful trade debt

Gain on sale of scrap material Property tax refund Rental Gain on disposal of property, plant and equipment

33,707 186,794

7,482

13,175

Truck rental

18,100

Gain on disposal of joint venture

36,940

74,350

95,124

324,783

905,478

Gain on disposal of quoted bonds

Others Total

27

– 109,497

FINANCE COSTS GROUP 2007 $

2006 $

178,024

Interest expense to non-related companies: Bank borrowings Bank overdraft

21,067

176,358 –

Finance leases

720

6,237

199,811

182,595

Total

Annu al Repo r t 2007


F i nan c ia l C o ntents

Notes to Financial Statements 56 J urong C ement L imited

March 31, 2007

28

INCOME TAX EXPENSE

A nnu al R epo r t 2007

GROUP 2007 $

2006 $

Current tax

11,947

1,859

Deferred tax charge (Note 23)

48,416

209,753

Underprovision of income tax in prior years (net)

260,905

245,085

Under (Over) provision of deferred tax in prior years (Note 23)

165,940

(113,690)

Total

487,208

343,007

Domestic income tax is calculated at 18% (2006 : 20%) of its estimated assessable profit for the year. Taxation for other jurisdictions is calculated at the rates prevailing in the relevant jurisdictions.

The total charge for the year can be reconciled to the accounting loss as follows: GROUP 2007 $

2006 $

(1,339,892)

(3,773,768)

Tax at the domestic income tax rate of 18% (2006 : 20%)

(241,181)

(754,754)

Tax effect of share of results of associates

(124,447)

292,608

74,776

12,883

Tax effect of expenses that are not deductible in determining taxable profit

169,819

97,385

Deferred tax benefit not recognised

395,290

570,346

(94,551)

(121,325)

Loss before tax

Effect of different tax rates of subsidiaries and associates operating in other jurisdictions

Utilisation of deferred tax benefit not previously recognised Effect of change in tax rate Underprovision of income tax in prior years

260,905

245,085

Under (Over) provision of deferred tax in prior years

165,940

(113,690)

1,859

1,982

(8,715)

487,208

343,007

Foreign tax suffered Others Total income tax expense


Finan cia l Contents

Notes to Financial Statements March 31, 2007

28

57 Jurong Cement Limited

INCOME TAX EXPENSE (Cont’d) GROUP

Company

2007 $

2006 $

2007 $

2006 $

14,603,886

11,115,070

2,253,189

854,000

(342,882)

1,247,139

343

172,072

Tax loss carryforwards: Amount at beginning of year Adjustment to prior year Movement in current year Amount at end of year Deferred tax benefit on above not recorded

1,654,988

2,241,677

928,569

1,227,117

15,915,992

14,603,886

3,182,101

2,253,189

2,864,879

2,920,777

572,778

450,638

6,780,858

7,733,365

674,545

1,247,000

Unabsorbed capital allowances: Amount at beginning of year Adjustment to prior year Movement in current year Amount at end of year Deferred tax benefit on above not recorded

(560,418)

74,802

75,808

(436,704)

(1,120,909)

(1,027,309)

(139,035)

(135,751)

5,099,531

6,780,858

611,318

674,545

917,915

1,356,172

110,037

134,909

(2,124,070)

(4,544,058)

(238,605)

(540,000)

Accelerated tax depreciation: Amount at beginning of year Adjustment to prior year Movement in current year Amount at end of year Deferred tax liability on above not recorded Net deferred tax benefit not recorded

(900,091)

782,628

42,779

275,520

1,136,694

1,637,360

64,440

25,875

(1,887,467)

(2,124,070)

(131,386)

(238,605)

(339,744)

(424,814)

(23,649)

(47,721)

3,443,050

3,852,135

659,166

537,826

The Group is under discussion with the tax authorities over the deductibility of certain expenses for the years of assessment 2000 to 2004. Management believes that the outcome of the discussion would be favourable and accordingly, similar expenses for subsequent years have been treated as tax deductible.

The Group’s and Company’s tax loss and unabsorbed capital allowances carryforward above are subject to the agreement of the Comptroller of Income Tax, including the conditions on the retention of majority shareholders of the Company, and compliance with the other conditions of the Singapore Income Tax Act. Deferred tax benefits vary from the Singapore statutory tax rate as it includes deferred tax on overseas operation. The related deferred tax assets have not been recognised because it is not certain whether future taxable profit will be available to utilise the benefit.

Annu al Repo r t 2007


F i nan c ia l C o ntents

Notes to Financial Statements 58 J urong C ement L imited A nnu al R epo r t 2007

March 31, 2007

29

LOSS FOR THE YEAR

Loss for the year has been arrived at after charging (crediting): GROUP 2007

2006

$

$

Employee benefits expense (including director’s remuneration): Defined contribution plans

564,739

460,250

Salaries and other benefits

6,583,603

5,520,985

Total employee benefits expense

7,148,342

5,981,235

Ex-gratia gratuity paid to a former executive director

262,091

Ex-gratia gratuity paid to former employees

280,911

630,000

229,654

223,736

96,850

287,625

57,712,795

58,385,385

110,602

100,830

26,000

25,000

28,179

Retirement benefit to a former managing director Directors’ remuneration Directors’ fees Cost of inventories recognised as expense Auditors’ remuneration: Auditors of the Company Current year Prior year Other auditors Non-audit fees paid to auditors: Other auditors

54,000

23,677

3,168,594

3,513,696

Foreign currency exchange loss

65,211

68,744

Property, plant and equipment written off

52,379

51,264

Depreciation of property, plant and equipment

Loss (Gain) on disposal of property, plant and equipment Gain on disposal of quoted bonds Provision for damages Provision for onerous contract Provision for impairment in value of investment property

12,750

(7,482)

(13,175)

120,000

735,150

778,000


Finan cia l Contents

Notes to Financial Statements March 31, 2007

59

30

LOSS PER SHARE

Jurong Cement Limited

The calculation of basic loss per ordinary share is calculated on the loss for the year attributable to equity holders of the Company $1,623,553 (2006 : $4,045,515) divided by the number of ordinary shares of 44,322,000 (2006 : 44,322,000) in issue during the year.

Annu al Repo r t 2007

There are no outstanding share options that will dilute earnings per share during the financial year ended March 31, 2007 and 2006.

31

DIVIDENDS

No dividend is proposed for the current financial year.

During the financial year ended March 31, 2006, the Company declared a final dividend of 1 cent per ordinary share less tax on the ordinary shares of the Company totalling $354,576 in respect of the financial year ended March 31, 2006. The dividend amount was paid during the current financial year.

32

CONTINGENT LIABILITIES GROUP

i) Credit facilities utilised by subsidiaries which are guaranteed by the Company ii) Credit facilities utilised by an associate which are guaranteed by the Company

Company

2007

2006

2007

2006

$

$

$

$

3,868,969

2,508,000

408,772

408,772

408,772

4,277,741

2,508,000

The Company has given undertakings to provide financial support to certain subsidiaries. The Company’s share of deficits in the shareholders’ funds of these subsidiaries amounted to $4,470,700 (2006 : $2,893,347 ) as at March 31, 2007.


F i nan c ia l C o ntents

Notes to Financial Statements 60 J urong C ement L imited

March 31, 2007

33

OPERATING LEASE ARRANGEMENTS The Group as Lessee

A nnu al R epo r t 2007

GROUP

Minimum lease payments paid under operating leases recognised as expense in the year

2007

2006

$

$

846,536

794,724

At the balance sheet date, the Group and Company has outstanding commitments under non-cancellable operating leases, which fall due as follows: GROUP

Company

2007

2006

2007

2006

$

$

$

$

703,637

416,335

125,625

125,625

In the second to fifth years inclusive

2,878,445

1,283,979

502,501

502,501

After five years

3,511,502

2,192,489

1,497,036

1,622,661

7,093,584

3,892,803

2,125,162

2,250,787

Within one year

Operating lease payments represent rentals payable by the Group for certain of its office properties. Leases are negotiated for an average term of 10 years.

The Group as lessor

At the balance sheet date, the Group has contracted with tenants for the following future minimum lease payments: GROUP

2007

2006

$

$

Within one year

537,282

302,314

In the second to fifth years inclusive

530,444

503,857

1,067,726

806,171

The investment property held has committed tenants for the 2 years subsequent to end of current financial year.


Finan cia l Contents

Notes to Financial Statements March 31, 2007

34

SEGMENT INFORMATION a)

Business segments

The operations of the Group are grouped mainly under investment holding and manufacturing and dealing in cement.

Segment revenue and expense are revenue and expense reported in the Group’s profit and loss statement that either are directly attributable to a segment or can be allocated on a reasonable basis to a segment.

Segment assets are all operating assets that are employed by a segment in its operating activities and that either are directly attributable to the segment or can be allocated to the segment on a reasonable basis. Segment assets exclude interest-producing assets.

Segment liabilities are all operating liabilities of a segment that either are directly attributable to the segment or can be allocated to the segment on a reasonable basis. Segment liabilities exclude deferred tax and income tax liabilities.

61 Jurong Cement Limited Annu al Repo r t 2007


(97,702)

208,647

Finance costs

Loss before tax

76,729

(76,729)

(1,630,820)

(1,630,820)

271,722

75,137

196,585

(1,675,225)

(1,675,225)

$

2006

(487,208)

(1,339,892)

(199,811)

326,516

(1,466,597)

79,320,920

79,320,920

$

2007

1,047,701

2,878,186

Addition of property, plant and equipment

Depreciation

Other information

Loss attributable to equity holders of the Company

3,216,496

290,408

297,200

3,168,594

1,178,230

(1,623,553)

( 203,547)

113,018

(1,732,636)

(173,418)

(1,559,218)

2,186,116

1,675,225

510,891

$

2007

(1,827,100)

130,529

(1,548,539)

(178,838)

(1,369,701)

2,504,806

1,630,820

873,986

$

2006

Minority interest

473,405

(2,312,854)

(84,314)

(1,504,065)

(13,804)

(710,671)

69,571,481

69,571,481

$

2007

Loss for the year

Income tax expense

326,516

Share of results of joint venture

Share of results of associates

(20,167)

78,446,934

78,446,934

$

$

Segment results before interest and taxation

Results

Total revenue

Inter-segment sales

External sales

Revenue

2006

Elimination

$

2006

3,513,696

586,423

(4,045,515)

(71,260)

(4,116,775)

(343,007)

(3,773,768)

(182,595)

(1,504,065)

(13,804)

(2,073,304)

70,082,372

70,082,372

Group

J urong C ement L imited

2007

Property investment and investment holding

A nnu al R epo r t 2007

Manufacturing and dealing in cement

SEGMENT INFORMATION (CONT’D)

62

34

F i nan c ia l C o ntents

Notes to Financial Statements

March 31, 2007


Write back of long outstanding trade debts

Consolidated total liabilities

Unallocated liabilities

Segment liabilities

LIABILITIES

Consolidated total assets

17,330,780

79,333,233

295,902

24,967,766

Investment in associates

Investment in joint ventures

54,069,565

5,242

Segment assets

ASSETS

BALANCE SHEET

Property, plant and equipment written off

Write back of doubtful debt –

– 

2007 $

13,395,187

75,669,165

295,902

25,332,157

50,041,106

48,828

(217,251)

(247,850)

2006 $

Manufacturing and dealing in cement

SEGMENT INFORMATION (CONT’D)

Provision for impairment diminution in value of investment property

34

4,421,251

30,923,434

30,923,434

47,137

778,000

2007 $

5,245,669

34,127,301

34,127,301

2,436

(32,084)

2006 $

Property investment and investment holding

2007 $

Elimination

2006 $

23,013,693

1,261,662

21,752,031

110,256,667

295,902

24,967,766

84,992,999

52,379

778,000

2007 $

– 

2006 $

19,832,634

1,191,778

18,640,856

109,796,466

295,902

25,332,157

84,168,407

51,264

(249,335)

(247,850)

Group

Finan cia l Contents

Notes to Financial Statements

March 31, 2007

63

Jurong Cement Limited Annu al Repo r t 2007


F i nan c ia l C o ntents

Notes to Financial Statements 64 J urong C ement L imited

March 31, 2007

34

A nnu al R epo r t 2007

SEGMENT INFORMATION (CONT’D) (b)

Geographical segment

The Group’s two business segments operate in three main geographical areas. Sales revenue is based on the country in which the customers are located. Total assets and capital expenditures are shown by the geographical area in which the assets are located. Revenue 2007 $

Assets 2006 $

2007 $

Capital expenditure 2006 $

2007 $

2006 $

Hong Kong

525,397

189,064

20,552,965

22,689,125

PRC

121,076

25,685,181

26,089,563

78,674,447

69,893,308

64,018,521

61,017,778

1,178,320

586,423

79,320,920

70,082,372

110,256,667

109,796,466

1,178,320

586,423

Singapore

35

EVENTS AFTER THE BALANCE SHEET DATE

Subsequent to the current financial year ended March 31, 2007, Holcim Ltd, through its wholly owned subsidiary, Holcim Investments (Singapore) Pte. Ltd., has acquired an aggregate of 24,449,675 shares, representing approximately 55.16% of the ordinary shares of the Company, at a price of $2.10 for each share, amounting to a total aggregate consideration of $51,344,318. As at the date of this report, Holcim is the holding company of the Company.

36

RECLASSIFICATIONS AND COMPARATIVE FIGURES

Certain reclassifications have been made to the prior year’s financial statements to enhance comparability with the current year’s financial statements. As a result, certain line items have been amended on the face of the consoldiated profit and loss statement. Comparative figures have been adjusted to conform with the current year’s presentation.

The items reclassified were as follows: Previously reported

Reclassifications

After reclassifications

$

$

$

(62,150,401)

(4,650,983)

(66,801,384)

Distribution costs

(4,884,677)

4,884,677

Administrative expenses

(5,091,171)

(233,694)

(5,324,865)

Consolidated Profit and Loss Statement Cost of sales


Finan cia l Contents

Corporate Governance Report The Board of Directors believes in adopting a high standard of corporate governance and the Company is committed to complying with the benchmark set by the Code of Corporate Governance (the “Code”) recently revised by the Council on Corporate Disclosure Governance Committee in 2005. This Report outlines the main corporate governance practices adopted by the Company.

BOARD OF DIRECTORS Principle 1

Board’s Conduct of its Affairs

The principle functions of the Board are: •

Overseeing the processes for evaluating the adequacy of internal controls, risk management, financial reporting and compliance;

Approving the broad policies, strategies and financial objective of the Company and monitoring the performance of management;

Approving annual budgets, major funding proposals, investment and divestment proposals;

Approving the nominations of board directors and appointment of key personnel; and

Assuming responsibility for corporate governance and compliance with the Companies Act and the rules and requirements of regulatory bodies.

The Board conducts regular scheduled meetings. Ad-hoc meetings are convened when circumstances require. The attendance of the directors at meetings of the Board and Board Committees, as well as the frequency of such meetings, is disclosed in this Report. Telephonic attendance and conference via audiovisual communication at Board meetings are allowed under the Company’s Articles of Association. Matters which are specifically reserved to the Board for decision and approval are those involving material acquisitions and disposal of assets, corporate or financial restructuring and share issuances and dividends. The Board delegates certain of its functions to the Audit, Nominating and Remuneration Committees. New directors are briefed on the Group’s businesses and Corporate Governance policies. In addition to facilitate a better understanding of the Group’s operations, familiarization visits, including overseas plants, are organized, if necessary. Upon confirmation of appointment, new directors will be issued a formal letter setting out the director’s duties and obligations. The Board has no dissenting view on the Chairman’s statement for the year in review. Principle 2

Board Composition and Balance

Presently, the Board comprises a non-executive Chairman, seven non-executive directors and one executive director. One third of the Board comprises of independent directors. A breakdown is as follows: Non-Executive Directors Paul Hugentobler (Chairman) (Non-Independent) (appointed on 30 May 2007) Tay Joo Soon (Deputy Chairman) (Independent) (appointed on 9 October 1992) Gérard Letellier (Non-Independent) (appointed on 30 May 2007) Renee Zecha (Non-Independent) (appointed on 23 May 2007) Dato’ Michael Yeoh Sock Siong (Non-Independent) (appointed on 8 March 2006) Joseph Benjamin Seaton (Non-Independent) (appointed on 8 March 2006) Joseph Grimberg (Independent) (appointed on 19 February 1998) Justin Kendrick (Independent) (appointed on 13 June 2007)

65 Jurong Cement Limited Annu al Repo r t 2007


F i nan c ia l C o ntents

Corporate Governance Report 66 J urong C ement L imited

Executive Director (“ED”) Dr Khor Jaw Huei (appointed on 30 May 2007)

A nnu al R epo r t 2007

The composition of the Board and independence of each director are reviewed annually by the Nominating Committee. Principle 3

Role of Chairman and Chief Executive Officer

The Company has a separate Chairman and Chief Executive Officer. The Chairman is a non-executive director who bears responsibility for the workings of the Board while the Chief Executive Officer is the most senior executive in the Company who bears executive responsibility for the management of the Company and Group. Both the Chairman and Executive Director are responsible for the conformity by Management to Corporate Governance policies as laid down by the Board. Principle 6

Access to Information

In order to ensure that the Board is able to fulfil its responsibilities, Management strives to provide the board members with monthly management accounts. The directors have also been provided with the phone numbers and email particulars of the Company’s senior Management and Company Secretary to facilitate access to any required information. The Company Secretary attends all Board meetings and is responsible to ensure that board procedures are followed. Board members have separate and independent access to the Company Secretary at all times.

NOMINATING COMMITTEE (NC) Principle 4

Board Membership

Principle 5

Board Performance

The Nominating Committee (“NC”) comprises three directors, majority of whom are independent directors. The Chairman of the NC is Mr Joseph Grimberg (Independent). The other members are Mr Tay Joo Soon (Independent) and Mr Gérard Letellier (Non-Executive). The NC’s principal functions are: •

To identify candidates and review all nominations for the appointment or re-appointment of members of the Board of Directors; the Chief Executive Officer of the Company and the whollyowned subsidiaries of the Company; the senior executive staff; and the members of the various Board Committees, for the purpose of proposing such nominations to the Board for its approval;

To determine the criteria for identifying candidates and reviewing nominations for the appointments referred to in the previous paragraph;

To decide how the Board’s performance may be evaluated and propose objective performance criteria for the Board’s approval;

To assess the effectiveness of the Board as a whole, and the contribution by each individual director towards the effectiveness of the Board; and

To set KPIs for the non-executive Directors, Executive Director and senior Management and evaluate their performances.


Finan cia l Contents

Corporate Governance Report 67 New directors are at present appointed by way of a board resolution, after the NC recommends their appointment. Such new directors must submit themselves for re-election at the next AGM of the Company. Article 98 of the Company’s Articles of Association requires one third of the Board to retire by rotation at every AGM. The Board had approved a formal process for the selection of new directors to increase transparency of the nominating process in identifying and evaluating nominees for directors. The selection process is set out as follows: 1)

Search Process • Identify the criteria that the prospective candidates should possess : age group, sex, qualifications, experience, personal attributes and skills. • Source from recommendations of fellow Board members, business associates or trade organizations.

2)

Selection Process • After an initial assessment of the CVs, a verification check is conducted through various contacts such as personal contacts, bankers, business associates and others. • Formal interview of short-listed candidates to assess suitability and ensure that they are aware of expectations and level of commitment required.

3)

Nomination Process • Recommend to the Board the nomination of successful candidates.

4)

Appointment Process • Based on the recommendations by the NC, the Board approves the appointment via a resolution. • Board to approve any other appointments to sub-committees, if appropriate. • Issue letter of appointment setting out terms and conditions of appointment such as period of office, compensation & benefits, duties & responsibilities and termination.

AUDIT COMMITTEE (AC) Principle 11 Audit Committee Principle 12 Internal Controls The Audit Committee (“AC”) comprises four members, majority are independent directors. The Chairman of the AC is Mr Tay Joo Soon who is an independent director. The other members are Mr Joseph Grimberg (Independent), Mr Justin Kendrick (Independent) and Ms Renee Zecha (Non-Executive). These members of the AC have had many years of experience in senior management positions in both the financial and industrial sectors. They have sufficient financial management expertise and experience to discharge the AC’s functions.

Jurong Cement Limited Annu al Repo r t 2007


F i nan c ia l C o ntents

Corporate Governance Report 68 J urong C ement L imited A nnu al R epo r t 2007

The Audit Committee meets at least twice a year to perform the following key functions: •

Recommend to the Board of Directors the external auditors to be nominated, approve the compensation of the external auditors, and review the scope and results of the audit, and its costeffectiveness;

Review with the other committees, management and the external auditors, significant risks or exposures that exist and assess the steps Management has taken to minimize such risk to the Company;

Review with the Executive Director and external auditors the findings of the annual audit;

Review with Management annually;

Significant internal audit observations during the year and Management’s responses;

The effectiveness of the Company’s internal controls over management, business and technology systems and practice; and

Any changes required in the planned scope of the audit plan and any difficulties encountered in the course of their audits;

Review legal and regulatory matters that may have a material impact on the financial statements, related exchange compliance policies, and programmes and reports received from regulators; and

Report actions and minutes of the AC to the Board of Directors with such recommendations as the AC considers appropriate.

Review the half-yearly and annual announcements on the results and financial position of the Company and the Group.

Review the financial statements of the Company and the consolidated financial statements of the Group before submission to the directors of the Company and the external auditors’ report on those financial statements.

Review interested party transactions, if any, as maybe required by the regulatory authorities or the provisions of the Singapore Companies Act.

The Audit Committee has full access to and co-operation of the Management and has been given the resources required for it to discharge its functions properly. In performing its functions, the Audit Committee meets with the external auditors without the presence of Management. It also has full discretion to invite any director and executive officer to attend its meetings. The external auditors have unrestricted access to the Audit Committee. The Audit Committee confirms that it has undertaken a review of all non-audit services provided by the external auditors and is satisfied that such services would not, in the Audit Committee’s opinion, affect the independence of the auditors. A Policy on Business Related Conduct has been put in place by the Audit Committee to provide an independent feedback channel for employees to report any corporate wrongdoings and to ensure appropriate investigation and follow up action on such report, if any. The Audit Committee has pursuant to Section 201B of the Companies Act, Chapter 50 nominated Messrs Ernst & Young to be appointed as auditors of the Company at the forthcoming AGM.


Finan cia l Contents

Corporate Governance Report 69 Principle 13 Internal Audits (IA) The Company’s internal audit function has been outsourced to Messrs KPMG. IA reports directly to the chairman of the AC on audit matters. The AC also reviews and approves the annual IA plans and resources to ensure that the IA has the necessary resources to adequately perform its functions. The Company’s internal auditors carry out a review of the effectiveness of the Company’s internal control, including financial, operational and compliance controls. Material non-compliance and internal control weaknesses noted during their audit are reported to the Audit Committee together with their recommendations. Based on the audit reports and the management controls in place, the Audit Committee is satisfied that there are adequate internal controls in the Group. The AC meets with the internal auditors without the presence of Management.

REMUNERATION COMMITTEE (RC) Principle 7

Procedures for Developing Remuneration Policies

Principle 8

Level and Mix of Remuneration

Principle 9

Disclosure on Remuneration

The Remuneration Committee (“RC”) comprises three directors, majority are independent directors. The Chairman of the RC is Mr Joseph Grimberg (Independent). The other members are Mr Tay Joo Soon (Independent) and Mr Gérard Letellier (Non-Executive). The RC’s principal responsibilities are to: •

Recommend to the Board base pay levels, benefits and incentive opportunities;

Approve the structure of the compensation programme for directors and senior Management to ensure that the programme is competitive and sufficient to attract, retain and motivate senior management of the required quality to run the Company successfully;

Review directors’ and senior Management’s compensation annually and determine appropriate adjustments; and review and recommend the ED’s pay adjustments.

Administer the Jurong Cement Share Option Scheme 2001 (“Scheme 2001”) approved by the shareholders on 28 August 2001.

Review and recommend the payment of Directors’ fees to be approved by shareholders at the AGM of the Company.

The executive director’s remuneration package is based on the performance of the Group and the individual. For the financial year ended 31 March 2007, only independent non-executive directors are paid directors’ fees, determined by the full Board based on the effort, time spent and responsibilities of the directors. Directors’ fees are subject to approval by shareholders at the Annual General Meeting of the Company.

Jurong Cement Limited Annu al Repo r t 2007


F i nan c ia l C o ntents

Corporate Governance Report 70 J urong C ement L imited A nnu al R epo r t 2007

Details of remuneration and benefits of directors and key executives (who are not directors of the Group) for the year ended 31 March 2007 are set out below (within broad bands):

Remuneration Bands

Salary %

Bonus %

Fees %

Other Benefits %

Total %

Directors (Below S$250,000) Tay Joo Soon

100

100

Joseph Grimberg

100

100

Whang Shang Ying

100

100

Huang Yuan Chiang

100

100

Tan Eng Sim Tan Sek Yin

Arthur Lee King Chi Dato’ Michael Yeoh Sock Siong Joseph Benjamin Seaton Tan Lena Lei-Lyn

34

5

61

100

Dominic Chang

31

8

61

100

Elizabeth Tay

80

13

7

100

Nakano Hiromasa

81

19

100

Nicklaus Chang

81

13

6

100

Tim Tan

81

13

6

100

Paul Tan Kah Hock Key Executives (Below S$250,000)

Notes: (i)

Directors’ fees for the financial year ended 31 March 2006 was declared and paid during the year ended 31 March 2007.

One of the employees of the Group, whose remuneration exceeds S$150,000 during the year, is related to a director and the Executive Director. The RC administers and recommends to the Board the grant of Options in respect of the Scheme 2001 in accordance with the rules approved by the shareholders. The objectives of Scheme 2001 are to motivate the executives of the Group to optimise their performance standards and efficiency and to retain key executives whose contributions are important to the long term growth of the Group. Details of the Scheme 2001 are set out in the Directors’ Report.


Finan cia l Contents

Corporate Governance Report 71

COMMUNICATION WITH SHAREHOLDERS Principle 10 Accountability and Audit Principle 14 Communication with Shareholders Principle 15 Greater Shareholder Participation The Company does not practice selective disclosure. Price sensitive information is always released on SGXNET after trading hours. Results and annual reports are announced or issued within the mandatory periods and are available on the Company’s website. All shareholders of the Company receive the Annual Report and Notice of Annual General Meeting. The Notice is also advertised in a national newspaper. At Annual General Meetings, shareholders are given the opportunity to air their views and ask directors or Management questions regarding the Company. The Articles allow a member of the Company to appoint one or two proxies to attend and vote instead of the members.

DEALINGS IN SECURITIES The Company has issued an Internal Compliance Code on Securities Transactions to Directors and key employees (including employees with access to price-sensitive information to the Company’s shares) of the Group setting out the code of conduct on transactions in the Company’s shares by these persons, the implications of insider trading and the recommendations of the Best Practices Guide issued by the Singapore Exchange Securities Trading Limited.

INTERESTED PERSON TRANSACTIONS Since the end of the previous financial year, the Company and its subsidiaries did not enter into any material contracts involving the interest of the directors or controlling shareholders and no such materials still subsist at the end of the financial year.

Jurong Cement Limited Annu al Repo r t 2007


F i nan c ia l C o ntents

Corporate Governance Report 72 J urong C ement L imited

DIRECTORS’ ATTENDANCE AT BOARD AND COMMITTEE MEETINGS

A nnu al R epo r t 2007

––––––––––––––– Committee –––––––––––––––

Board No. of Meetings

Audit

Remuneration

Nominating

No. of Meetings

No. of Meetings

No. of Meetings

held attended held attended held attended

held attended

Tay Joo Soon

9

9

4

4

6

5

5

4

Tan Eng Sim

9

9

Tan Sek Yin

9

8

4

3

Joseph Grimberg

9

7

4

3

6

6

5

5

Whang Shang Ying 1

9

9

4

1

6

4

5

4

Tan Lena Lei-Lyn 2

9

6

6

2

9

7

4

3

6

6

9

1

Dato’ Michael Yeoh Sock Siong

9

8

Joseph Benjamin Seaton

9

9

Paul Tan Kah Hock

9

Huang Yuan Chiang Arthur Lee King Chi

Paul Hugentobler

3

4

5

Gérard Letellier 5 Dr Khor Jaw Huei 5 Renee Vanessa Wardhana Zecha 6 Justin Murray Guy Kendrick 7 Notes: 1

Mr Whang Shang Ying was appointed as Member of Audit Committee with effect from 28 September 2006.

2

Ms Lena Tan Lei-Lyn resigned as Director of the Company on 15 December 2006.

3

Mr Arthur Lee King Chi resigned as Director of the Company on 1 September 2006.

4

Mr Paul Tan was appointed as Director on 9 February 2007. He subsequently resigned as Director on 9 April 2007.

5

Messrs Paul Hugentobler, Gérard Letellier and Dr Khor Jaw Huei were appointed as Directors of the Company with effect from 30 May 2007.

6

Ms Renee Vanessa Wardhana Zecha was appointed as Director of Company with effect from 23 May 2007.

7

Mr Justin Murray Guy Kendrick was appointed as Director of the Company with effect from 13 June 2007.


Finan cia l Contents

Statistics of Shareholdings AS AT 15 JUNE 2007

NUMBER OF FULLY PAID-UP & ISSUED SHARES CLASS OF SHARES VOTING RIGHTS SIZE OF SHAREHOLDINGS

: : :

73 Jurong Cement Limited

44,322,000 Ordinary Shares one vote per share

Annu al Repo r t 2007

NO. OF SHAREHOLDERS

%

NO. OF SHARES

%

1

-

999

146

20.14

48,183

0.11

1,000

-

10,000

510

70.34

1,432,000

3.23

10,001

- 1,000,000

65

8.97

3,609,992

8.15

4

0.55

39,231,825

88.51

725

100.00

44,322,000

100.00

NO. OF SHARES

%

24,427,325

55.11

YTL CEMENT SINGAPORE PTE LTD

9,279,000

20.94

MITSUBISHI MATERIALS CORPORATION

2,762,750

6.23

NOMURA SINGAPORE LIMITED

2,762,750

6.23

UNITED OVERSEAS BANK NOMINEES PTE LTD

917,750

2.07

MORPH INVESTMENTS LTD

467,000

1.06

DBS NOMINEES PTE LTD

267,550

0.60

CIMB-GK SECURITIES PTE LTD

222,000

0.50

ORCHARD CENTRE HOLDINGS PTE LTD

187,250

0.42

UOB NOMINEES (2006) PTE LTD

176,500

0.40

WAH AIK & CO PTE LTD

156,250

0.35

BOON SIEW SDN BHD

75,000

0.17

MAYBAN NOMINEES (S) PTE LTD

71,000

0.16

OCBC NOMINEES SINGAPORE PTE LTD

45,500

0.10

NG BEE LAY

41,000

0.09

QUEK CHIN MOON

37,000

0.08

LIM CHEE NEO

34,000

0.08

LEE LENG SECK BENNY

30,000

0.07

SOO EE & CO SDN BHD

30,000

0.07

HUI HIN YEE

30,000

0.07

42,019,625

94.80

1,000,001 & ABOVE TOTAL

TOP TWENTY SHAREHOLDERS AS AT 15 JUNE 2007 DBS VICKERS SECURITIES (S) PTE LTD


F i nan c ia l C o ntents

74

Substantial Shareholders as at 15 June 2007

J urong C ement L imited A nnu al R epo r t 2007

Direct Interest

Deemed Interest

No. of Shares

%

No. of Shares

%

22,702,034

51.22

1,747,641

3.94

Holcim Ltd

24,449,675

55.16

Holdertrade S.A.

24,449,675

55.16

Thomas Schmidheiny

24,449,675

55.16

9,279,000

20.94

YTL Corporation Berhad

9,279,000

20.94

YTL Cement Berhad

9,279,000

20.94

YTL Industries Berhad

9,279,000

20.94

Yeoh Tiong Lay & Sons Holdings Sdn Bhd

9,279,000

20.94

Tan Sri Dato’ Seri (Dr) Yeoh Tiong Lay

9,279,000

20.94

2,762,750

6.23

2,762,750

6.23

Name of Substantial Shareholder Holcim Investment (Singapore) Pte Ltd

YTL Cement Singapore Pte Ltd

Mitsubishi Materials Corporation Nomura Trading Co., Ltd Notes: 1)

Holcim Ltd, Holdertrade S.A. and Mr Thomas Schmidheiny are deemed to have interest in the 24,449,675 shares held by Holcim Investment (Singapore) Pte Ltd.

2)

YTL Corporation Berhad, YTL Cement Berhad, YTL Industries Berhad, Yeoh Tiong Lay & Sons Holdings Sdn Bhd and Tan Sri Dato’ Seri (Dr) Yeoh Tiong Lay are deemed to have interest in the 9,279,000 shares held by YTL Cement Singapore Pte Ltd.

3)

Nomura Trading Co., Ltd is deemed to have interest in the 2,762,750 shares of $1.00 each fully paid held by Nomura Singapore Limited.


Finan cia l Contents

Notice of Annual General Meeting JURONG CEMENT LIMITED Company Registration No. 197300737Z (Incorporated in the Republic of Singapore)

Notice is hereby given that the Thirty Fourth Annual General Meeting of the Company will be held on Wednesday, July 25, 2007 at 11.00 a.m. at Albizia Room, Level 2, Jurong Country Club, Science Centre Road, Off Jurong Town Hall Road, Singapore 609078 to transact the following businesses:

ORDINARY BUSINESS 1.

To receive and consider the Directors’ report and accounts for the year ended 31st March 2007 and the auditor’s report thereon. (Resolution 1)

2.

To declare and approve the proposed Directors’ fees of $185,000 and a director’s allowance for Mr David Tan of $15,900. (Resolution 2)

3.

To re-appoint Mr Joseph Grimberg pursuant to Section 153 of the Companies Act. [see Explanatory Note (a)] (Resolution 3)

4.

To re-elect the following Directors retiring pursuant to the Company’s Articles of Association: Mr Tay Joo Soon (Article 98) (Resolution 4) Mr Paul Hugentobler (Article 103) (Resolution 5) Mr Gérard Letellier (Article 103) (Resolution 6) Ms Renee Zecha (Article 103) (Resolution 7) Mr Justin Kendrick (Article 103) (Resolution 8)

5.

To appoint Messrs Ernst & Young as auditor of the Company, in replacement of the retiring auditors, Messrs Deloitte & Touche, for the ensuing financial year and to authorise the Directors to fix their remuneration. [see Explanatory Note (b)] (Resolution 9)

6.

To transact any other business of the Company which may properly be transacted at an Annual General Meeting.

By Order of the Board

Lo Swee Oi/Tan Ching Chek Company Secretaries Date: 9 July 2007 Singapore

75 Jurong Cement Limited Annu al Repo r t 2007


F i nan c ia l C o ntents

Notice of Annual General Meeting 76 J urong C ement L imited A nnu al R epo r t 2007

Explanatory Notes: (a)

Mr Joseph Grimberg, if re-appointed, will remain as a Member of the Audit Committee, Chairman of Remuneration Committee and Nominating Committee. Mr Grimberg is considered an Independent director for purposes of Rule 704(8) of the Listing Manual of Singapore Exchange Securities Trading Limited. Full particulars on Mr Grimberg are set out on page 7 of the Annual Report.

(b)

The Company has received notice from a shareholder, Messrs Holcim Investments (Singapore) Pte. Ltd., nominating Messrs Ernst & Young as the Company’s Auditors in place of the retiring Auditors, Messrs Deloitte & Touche. Messrs Ernst & Young have expressed their willingness to accept the appointment. The proposal for the appointment will be put to the shareholders at this Annual General Meeting.

Notes to Proxy Form: (1)

A member entitled to attend and vote at this meeting is entitled to appoint a proxy to attend and vote in his stead. A proxy need not be a member of the Company.

(2)

If a proxy is to be appointed, the form must be deposited at the registered office of the Company, at 120 Pulau Damar Laut, Singapore 618312, not less than 48 hours before the meeting.

(3)

The form of proxy must be signed by the appointor or his attorney duly authorised in writing.

(4)

In the case of joint shareholders, all holders must sign the form of proxy.


Jurong Cement Limited 120 Pulau Damar Laut, Singapore 618312 Tel: 62618803 Fax: 62659178/62618096 Co. Reg. No. 197300737Z

9 July 2007

Board of Directors: Paul Hugentobler Tay Joo Soon Dr Khor Jaw Huei Gérard Letellier Renee Vanessa Wardhana Zecha Dato’ Michael Yeoh Sock Siong Joseph Benjamin Seaton Joseph Grimberg Justin Murray Guy Kendrick

To

: The Shareholders of Jurong Cement Limited

Dear Sir/Madam, NOTICE OF NOMINATION OF NEW AUDITORS We have received a nomination from Messrs Holcim Investments (Singapore) Pte Ltd nominating Messrs Ernst & Young as Auditors of the Company in place of Messrs Deloitte & Touche for the ensuing financial year at the forthcoming Annual General Meeting of the Company to be held on 25 July 2007. Pursuant to Section 205(12) of the Companies Act, Cap. 50, a copy of the Notice is enclosed herewith for your attention.

Yours faithfully, By Order of the Board Lo Swee Oi (Ms) Company Secretary


Holcim Investments (Singapore) Pte. Ltd. Registered Office: 47 Hill Street #06-02, Chinese Chamber of Commerce & Industry Building Singapore 179365 c/o 16, Jalan Tepong, Singapore 619331 Phone +656265 1933 Fax +656268 4027

5th June 2007

The Board of Directors Jurong Cement Limited 89 Science Park Drive 120 Pulau Damar Laut Singapore 618312 Gentlemen, Madam JURONG CEMENT LIMITED ( “Jurong”) – NOTICE OF NOMINATION OF AUDITOR As you are aware, Holcim Investments (Singapore) Pte Limited (“Holcim”) has acquired a majority holding in Jurong. Holcim needs to ensure that its audit is compatible with its ultimate parent company and that the audit of Jurong also, as a Holcim subsidiary, is compatible with the parent company audit standards and procedures. This will necessitate changing the auditor of Jurong to the same firm as audits Holcim Ltd, Switzerland, namely Ernst & Young, Certified Public Accountants. Pursuant to Sections 205(11) and (12) of the Companies Act, Cap 50, we therefore, being a substantial shareholder of Jurong, hereby give notice to nominate Ernst & Young, Certified Public Accountants, Singapore of One Raffles Quay, #18-01 North Tower, Singapore 048583 as the auditor of Jurong, at the forthcoming Annual General Meeting of the Company. Yours faithfully

Signed by:

Gérard Letellier for and on behalf of, Holcim Investments (Singapore) Pte Ltd


Proxy Form ANNUAL GENERAL MEETING

Important 1. For investors who have used their CPF monies to buy Jurong Cement shares, this Annual Report is sent to them at the request of their CPF Approved Nominees solely FOR INFORMATION ONLY.

JURONG CEMENT LIMITED Company Registration No. 197300737Z (Incorporated in the Republic of Singapore)

2. This Proxy Form is FOR USE ONLY BY MEMBERS whose shares in Jurong Cement are registered in their names. It is not valid for use by CPF investors and persons whose shares are not registered in their own names, and shall be ineffective for all intents and purposes if used or purported to be used by them.

I/We _________________________________________________________________________________________ (Name) of _________________________________________________________________________________________ (Address) being a member/members of JURONG CEMENT LIMITED hereby appoint: Name

Address

NRIC/Passport Number

Proportion of Shareholdings (%)

Address

NRIC/Passport Number

Proportion of Shareholdings (%)

and/or (delete as appropriate)

Name

or failing whom, the Chairman of the Meeting, as my/our proxy/proxies to vote for me/us on my/our behalf, at the Annual General Meeting of the Company to be held on Wednesday, 25 July 2007 at 11.00 a.m. and at any adjournment thereof. I/We have indicated with an “x” in the appropriate box below how I/we wish my/our proxy/proxies to vote. If no specific direction as to voting is given, my/our proxy/proxies will vote or abstain from voting at his/their discretion, as he/they will on any other matter arising at the Meeting. No.

Resolutions

1.

Adoption of Directors’ Reports and Accounts

2.

Approval of Directors’ Fees and Director’s allowance

3.

Retirement of Mr Joseph Grimberg pursuant to Section 153(6) of Companies Act, Cap 50

4.

Re-election of Mr Tay Joo Soon as Director

5.

Re-election of Mr Paul Hugentobler as Director

6.

Re-election of Mr Gérard Letellier as Director

7.

Re-election of Ms Renee Zecha as Director

8.

Re-election of Mr Justin Kendrick as Director

9.

Appointment of Messrs Ernst & Young as Auditors in place of Messrs Deloitte & Touche

For

Dated this ___________ day of ____________________ 2007. Total No. of Shares Held

______________________________________ Signature(s) of Member(s)/Common Seal IMPORTANT: PLEASE READ NOTES OVERLEAF

Against


NOTES 1.

A member entitled to attend and vote at the Meeting is entitled to appoint one or two proxies to attend and vote in his stead.

2.

Where a member appoints more than one proxy, the appointments shall be invalid unless he specifies the proportion of his holding (expressed as a percentage of the whole) to be represented by each proxy.

3.

A proxy need not be a member of the Company.

4.

A member should insert the total number of shares held. If the member has shares entered against his name in the Depository Register (as defined in Section 130A of the Companies Act, Cap. 50 of Singapore), he should insert that number of shares. If the member has shares registered in his name in the Register of Members of the Company, he should insert that number of shares. If the member has shares entered against his name in the Depository Register and registered in his name in the Register of Members, he should insert the aggregate number of shares. If no number is inserted, this form of proxy will be deemed to relate to all shares held by the member.

5.

The instrument appointing a proxy or proxies must be deposited at the Company’s registered office at 120 Pulau Damar Laut, Singapore 618312 not less than 48 hours before the time set for the Meeting.

6.

The instrument appointing a proxy or proxies must be under the hand of the appointor or of his attorney duly authorised in writing. Where the instrument appointing a proxy or proxies is executed by a corporation, it must be executed either under its common seal or under the hand of its attorney or a duly authorised officer.

7.

Where an instrument appointing a proxy is signed on behalf of the appointor by an attorney, the letter or power of attorney or a duly certified copy thereof must (failing previous registration with the Company) be lodged with the instrument of proxy, failing which the instrument may be treated as invalid.

GENERAL The Company shall be entitled to reject a Proxy Form which is incomplete, improperly completed, illegible or where the true intentions of the appointor are not ascertainable from the instructions of the appointor specified on the Proxy Form. In addition, in the case of shares entered in the Depository Register, the Company may reject a Proxy Form if the member, being the appointor, is not shown to have shares entered against his name in the Depository Register as at 48 hours before the time appointed for holding the Meeting, as certified by The Central Depository (Pte) Limited to the Company.


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Corporate Data

Board of Directors

Registered Office

Paul Hugentobler

Chairman

Tay Joo Soon

Deputy Chairman

120 Pulau Damar Laut Singapore 618312

Dr Joe Khor

Chief Executive Officer

Gérard Letellier Renee Zecha Dato’ Michael Yeoh Sock Siong

Tel: 6261 8016 / 6261 8803 Fax: 6265 9178 Email: jcg@jurongcement.com Website: www.jurongcement.com

Joseph Benjamin Seaton Joseph Grimberg Justin Murray Guy Kendrick

Company Registration Number 197300737Z

Audit Committee Tay Joo Soon

Chairman

Joseph Grimberg Renee Zecha Justin Murray Guy Kendrick

Nominating Committee

Share Registrar B.A.C.S. Private Limited 63 Cantonment Road Singapore 089758

Auditors

Gérard Letellier

Deloitte & Touche Certified Public Accountants: Partner-in-charge: Philip Yuen (appointed on July 28, 2004)

Remuneration Committee

Internal Auditors

Joseph Grimberg Chairman Gérard Letellier

KPMG Partner-in-charge: Tan Wah Yeow (appointed on January 10, 2007)

Secretaries

Bankers

Lo Swee Oi

The Hongkong and Shanghai Banking Corporation Limited

Joseph Grimberg Chairman Tay Joo Soon

Tay Joo Soon

Tan Ching Chek

Oversea-Chinese Banking Corporation Limited DBS Bank Ltd


120 Pulau Damar Laut, Singapore 618312 Tel: (65) 6261 8016 / 6261 8803 Ext 202 / 230 Fax: (65) 6265 9178 Email: jcg@jurongcement.com Website: www.jurongcement.com

JURONG CEMENT BULK TERMINAL PTE LTD

Beijing Singkong Cement (BSK)

120 Pulau Damar Laut Singapore 618312

Beijing Jun Zhuang Zhen Mentougou District 102300 Beijing, China

Tel: (65) 6261 8803 Ext 215 Fax: (65) 6265 9178 Email: jcbt@jurongcement.com

Tel: (8610) 6081 1218 Fax: (8610) 6081 1673

Beijing Eastern Jurong Cement (BEJC)

Zhejiang Jurong Cement (ZJC) Zhejiang Shanying Cement (ZSY)

JURONG READYMIX CONCRETE PTE LTD 17A Pandan Road Singapore 609268 Tel: (65) 6261 8016 Fax: (65) 6265 3169 Email: jrc@jurongcement.com

CONCRETE CONNECTIONS PTE LTD 17A Pandan Road Singapore 609268 Tel: (65) 6261 8016 Fax: (65) 6266 3981 Email: ccpl@jurongcement.com

Meishan Town, Changxing County Zhejiang, PRC 313117 China Tel: (86572) 607 6128 Fax: (86572) 607 5702 Shanghai Singkong Industrial Park Shanghai Ma Lu Industrial Corporation People’s Municipal Government Office Building Ma Lu, Jiading, Shanghai, China Tel: (8621) 952 8162 Fax: (8621) 952 9668 Max Billion – Island Place Tower at North Point Island Place Tower, Island Place No. 510 King’s Road North Point, Hong Kong Tel: (65) 6261 8803 Ext 229 Fax: (65) 6265 9178

Jurong Cement Annual Report 2007  

A razorSHARK design. 2007, June.

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