Pteris Global limited annUal RepoRt 2009
Canada
Usa
mexico United Kingdom
Netherlands Germany
belgium
Czech republic
France
Hungary Ukraine
Caribbean russia
tunisia
Panama azerbaijan
syria
Cyprus lebanon
Jordan
eygpt
ecuador Kuwait
Qatar
saudi arabia U.a.e China
Nigeria oman
south Korea
india
Hong Kong taiwan
myanmar
sri lanka thailand
maldives Philippines
Vietnam
malaysia Cambodia
singapore
indonesia
australia
corporateprofile
Incorporated in 1979 and listed on the mainboard of the create value for our customers by focusing on achieving
Singapore Stock Exchange, Pteris Global Limited (formerly excellence in core competency and providing engineering
known as Inter-Roller Engineering Limited) is a global solutions of the highest quality and standard. Pteris Global
integrated solutions provider of airport logistics systems has successfully completed more than 150 projects in
such as Baggage Handling, In-flight Catering, Air Cargo over 40 countries, spanning across six continents.
Handling and Express Courier Handling.
Our Corporate Office is located in Singapore, and we
Pteris Global provides total system solutions – system have subsidiary offices in Canada, China, Malaysia, United
and capacity evaluation, system concept design, detailed Kingdom, United Arab Emirates and the United States of
engineering design, computer simulation and emulation, America.
equipment manufacturing, project implementation, system
integration and operational maintenance. We strive to Pteris Global’s brand philosophy of Harmony in Motion
is about constantly instilling and cultivating harmony
amongst themselves, with its partners and customers.
This approach has been the cornerstone of Pteris Global’s
success through the years.
contents
Corporate Profile
1 Vision, Mission and Core Values 16 Interview with the CEO
2 Corporate Structure 18 Board of Directors 64 Learning and Development Program
3 Key Milestones 21 Senior Management 65 Company Activities
7 Corporate Information 25 Management of Subsidiares 66 Corporate Events
8 Branding 46 Geographical Reach 67 Risk Management
10 Our Core Businesses 48 Operational & Financial Review 73 Report on Corporate Governance
12 Chairman’s Message 58 Market Overview
harmony in motion Pteris Global Limited 1
annual report 2009
vision corevalues
We strive service
to be a living To understand, determine and deliver what
our customers want, with a high standard
of workmanship and professionalism
company
trust
We believe that trust and respect are
essential for teamwork
mission relationship
We believe in good relationships and fairness
To excel as a in all our dealings
world-class integrity
engineering We are committed to a high standard of integrity
corporation value people
with enduring We value every member of our team and
encourage their development
partnerships
and teamwork
excellence
We strive to excel always
2 Pteris Global Limited harmony in motion
annual report 2009
corporatestructure
Singapore
Pteris Global Limited
Pteris Pte Ltd
Inter-Roller Investments Pte Ltd
Inter-Roller Engineering Services Pte Ltd
Malaysia Middle East North America
Pteris Global Sdn Bhd IR (Middle East) LLC Pteris Global (Canada) Inc.
Pteris Global (USA) Inc.
China
Pteris Global (Suzhou) Limited Pteris Global (Beijing) Limited
3 Pteris Global Limited harmony in motion
annual report 2009
keymilestones
1979 1990 1992 1994 1995
• Inter-Roller • Moved from • Entered into a • Secured a S$4.8 • Established
Engineering Joo Koon Circle to new array of million project our subsidiary,
Limited was formed Benoi Crescent. business to design, IR Engineering
by our three manufacture Sdn Bhd, in
founders: the late 1991 • Secured our and install an Malaysia.
Mr Chan Chin Wah, • Our headquarters first Baggage automated
Mr Low Kok Hua at Benoi Crescent Handling System Baggage Handling • Secured a
and the late was officially contract worth System for S$5.5 million
Mr Yap Lem. opened by the S$6.5 million Xiamen Gaoqi contract to supply
honorable Minister upgrading job at International Air Cargo Handling
for National Terminal 1 from Airport in China equipment for
Development, the Civil Aviation Chap Lap Kok
Mr S. Dhanabalan. Authority of • Awarded a International
Singapore (CAAS). S$3.6 million Airport, Hong Kong.
maintenance
1993 contract for
• Completed the Baggage
turnkey projects Handling System
including the at Terminal 2 of
Baggage Handling Changi Airport,
System for Changi Singapore.
’79
Airport, Singapore.
’91 ’94
’92
4 Pteris Global Limited harmony in motion
harmony in motion Pteris Global Limited 4
annual report 2009 annual report 2009
1997 1999 2000 2002 2003
• Received our • Secured a • Awarded contract to • Awarded contract • Entered the North
first ISO 9001 S$3.4 million build, manufacture to design and African market
certification. Express Courier and supply Air build a highly with a Baggage
Handling System Cargo Handling automated Handling System
• Secured a System for United
project for DHL Baggage Handling project from the
S$38.5 million Parcel Service
International System for Civil Aviation
contract to (UPS).
(Hong Kong) New Bangkok Authority of
re-develop and Limited. • Secured contract International Tunisia.
expand the to provide Express Airport, Thailand.
Baggage Handling • Awarded a Courier Handling • Supplied an Arrival
System at Changi US$7.8 million System for • Designed and System including
Airport Terminal 2, contract for DHL Worldwide built a new, carousels and
Singapore. In-flight Catering Express in both fully-automated loading conveyors
System for Korean Hong Kong and Baggage Handling to Manchester
1998 Airlines Co. Ltd at Singapore. System at Changi Airport, United
• Secured a S$16.0 the new Incheon Airport Terminal 3. Kingdom.
million contract to 2001
International
design and build • Entered into • Secured contract
Airport in Seoul,
a fully-automated the Middle East from Singapore
South Korea.
Material Handling market with the Changi Airport
System for the Baggage Handling to re-develop
new Singapore System project for the Bagagge
Airport Terminal Cairo International Handling System
’02
Services Ltd Airport in Egypt. in Terminal 1
(SATS) In-flight and enhance
Catering Centre. the security of
the Baggage
’97
Handling System
in Terminal 2.
’99 ’01
5 Pteris Global Limited harmony in motion
harmony in motion Pteris Global Limited 5
annual report 2009 annual report 2009
2004 2005 2005 2006 2007
• Established our • Incorporation • Secured project • Secured contract • Secured our
Middle East of Inter-Roller to design and to design and first North
subsidary, IR Engineering build part of the build the Baggage America project
(Middle East) (Beijing) Co., Ltd Baggage Handling Handling System at Winnipeg
Limited Liability in China. System for the for Tan Son Nhat James Armstrong
Company. new terminal at International Airport Richardson
• First foray into Beijing Capital in Ho Chi Minh International
• Awarded contract South America International City, Vietnam. Airport, Canada.
to provide with our project Airport, China.
Baggage Handling for Tocumen • Secured project to • Secured our first
System to Dubai International • Supplied Baggage design and build the USA control
International Airport in Republic Handling System Baggage Handling systems project at
Airport Terminal 1, of Panama. to the Budget System for Phoenix Sky Harbor
UAE. Terminal in Shanghai Pudong International Airport
• Secured the Singapore. International Terminal 4 .
• Awarded a S$15.0 Baggage Handling Airport, China.
million contract System project
to design and for the world’s • Visit by Singapore
supply an In-flight 16th busiest Minister for
Catering System airport, Hong Kong Foreign Affairs,
to Emirates Airline International Airport. Mr George Yeo,
in Dubai. to Tocumen
International
2
Airport, Republic
of Panama.
’04 ’06
’05
harmony in motion Pteris Global Limited 6
annual report 2009
2007 2008 2008 2009
• Clinched contract • Incorporation of • Secured second • Change of
to provide In-flight new subsidiary, project in South company name
Catering System Pteris Global America at New from ‘Inter-Roller
for New Doha (USA) Inc. in Quito International Engineering
International Delaware, United Airport, Ecuador. Limited’ to ‘Pteris
Airport. States of America. Global Limited’ on
• Secured second 16 January 2009.
• Incorporation of • Set up the project in North
new subsidiary, Baggage America at Calgary • Secured another
Inter-Roller Airport Handling System International project at Phoenix
Logistics System demonstration Airport, Canada. Sky Harbor
(Suzhou) Co., Ltd. centre in International
in China. Charlotte, North Airport Terminal 3
Carolina, USA. in Arizona, USA.
• Incorporation of • Relocated from
new subsidiary, former premises
Pteris Global to new location at
(Canada) Inc. in Quality Road.
Nunavat, Canada.
• Received
recognition from
BNP Associates
Inc., a major airport
consultant in USA,
with a Certificate
’08
of Approval.
harmony in motion Pteris Global Limited 7
annual report 2009
corporateinformation
Board of Directors Auditors
Lim Yong Wah KPMG LLP
Non-Executive Chairman and Independent Director 16 Raffles Quay #22-00
Low Kok Hua Hong Leong Building
Non-Executive Director Singapore 048581
Haider Mohamedally Sithawalla Lucas Tran
Independent Director
Engagement Partner
Loh Chin Hua (Since financial year ended
Independent Director
31 December 2008)
Dr Soon Kong Ann
Independent Director Share Registrar
KCK CorpServe Pte Ltd
Tan Guong Ching
Independent Director
333 North Bridge Road #08-00
KH KEA Building
Oon Chong Howe Singapore 188721
Executive Director
John Sng Hee Kwee Bankers
Executive Director DBS Bank Limited
The Royal Bank of Scotland N.V.
Company Secretaries Malayan Banking Berhad
Steven Lwi Tong Boon Oversea-Chinese Banking Corporation Limited
Foo Soon Soo The Hongkong and Shanghai Banking
Corporation Limited
Audit Committee
Lim Yong Wah (Chairman) Registered Office
Haider Mohamedally Sithawalla 28 Quality Road
Loh Chin Hua Singapore 618828
Dr Soon Kong Ann Tel : (65) 6861 2828
Fax : (65) 6266 5516
Nomination and Email : pgl@pterisglobal.com
Remuneration Committee Website : www.pterisglobal.com
Haider Mohamedally Sithawalla (Chairman)
Loh Chin Hua Company Registration Number
Low Kok Hua 197900230M
Tan Guong Ching
8 Pteris Global Limited harmony in motion
annual report 2009
branding
ourbrand
Identity
Our brand reflects the soul of our organisation, the way we behave, the fashion we
communicate, and how we impact our customers’ lives in the markets we operate in.
More than that, it articulates our larger existence, who we are, and all that Pteris Global
stands for.
ourname oursymbol ourcorporate
Pteris Global The Pteris Fern Colors
At Pteris Global, our spirits take A stylised Pteris plant in three Oceanic Blue is used to depict
on the qualities of the Pteris overlapping band waves represents dynamism and professionalism
ferns: resilient and dynamic in our people, partners and customers. whilst Harmonic Green exemplifies
nature, yet flexible and versatile The harmonious blend of the three a spirit of unity. The customised
to weather changing conditions. band waves symbolises the close typeface, presented in an amiable
Deriving from the Greek word working relationships we have and friendly fashion, portrays
“Ptera” meaning “wings”, Pteris with our partners and customers our personable nature that starts
Global takes flight and soars that enable smooth and seamless from within as a company culture,
above challenges. Pteris ferns operations. The bands also appear in and extends to our partners and
are also found on all continents a form of flight, signifying the three customers.
of the world, which signifies our parties’ excellence and progress.
growing global presence.
ourbrand
mission
We strive to be a living company by constantly fostering harmony with our people, our partners
and our customers.
harmonywithin harmonywith harmonywith
Our People Our Partners Our Customers
Our people are the thought, We believe in growing enduring Working closely with our customers,
face and voice of the Pteris partnerships. Warm and personable, we are dedicated to the constant
Global brand. How we speak, we work closely and harmoniously upgrading of our infrastructure and
behave and conduct ourselves with all our partners in meeting their facilities, to enable airport systems
reflect our brand to the external expectations. We understand that to function/operate blissfully in
world. From evaluation to design, a genuine and sincere partnership seamless motion. We believe that
simulation to project management, is the cornerstone of every long-term fostering strong relationships are
we believe in working in One relationship. vital in ensuring quality products
Harmony, harnessing the best of and excellent services.
our collective expertise to deliver
world-class solutions, at all times.
harmony in motion Pteris Global Limited 9
annual report 2009
branding
ourbrand
philosophy
Transcending beyond our functional roles as momentum. It is about constantly instilling
systems integrators, providing engineering and and cultivating harmony with our partners,
design services, we see our larger existence as amongst ourselves internally, and the
creating enduring partnerships and breathing airports we breathe life into.
life into airports around the world. Everyday.
At Pteris Global, this is how we see ourselves
The essence of our Pteris Global brand is about as a living company, a brand that enlivens
constant evolution. It is about progressive Harmony in Motion.
ourbrand
values
unity respect
Across departments, divisions, overseas offices, we Harmony within Pteris Global starts with respect
work harmoniously as a family. We foster a strong for every individual in our organisation. Harmony
culture of teamwork and camaraderie. We also share in our relationships with customers start with us
ideas, expertise and resources. Our belief of Harmony being understanding and respectful to their needs.
in Motion is constantly in our being. We are sensitive and respect different cultures
and ethnicities, the different social and economical
integrity climates, as well as business practices in every
Relationships we foster passionately with our market we go into.
partners are built firmly on trust, honesty and honour.
service excellence
Ever committed, focused and professional, we
live on what we promise, meeting our customers’
expectations in service excellence.
10 Pteris Global Limited harmony in motion
annual report 2009
ourcorebusinesses
Baggage Handling Systems
We work in close consultation with our customers to
design systems using the sophisticated program. We
believe the key benefits of an intelligent BHS are its
ability to identify and overcome capacity and bottleneck
constraints, meet security considerations, and ensure In-flight Catering Systems
low operating and maintenance costs.
We design our systems with customers’ requirements
Our system integration capabilities also extend to in mind and strive to perform beyond their
BHS projects integrating 100% Hold Bag Screening expectations. Our integrated systems and solutions
Systems, which cater to the stringent security are specially designed to optimise performance,
environment of today’s airports. streamline operations and minimise costs.
Our maintenance diagnostic system is online 24-hour Our fully-automated material handling systems for
a day, 7 days a week, and used by our service and in-flight catering are custom-designed to ensure
maintenance engineers to monitor the operational seamless transportation of materials across work
status of your system by accessing the airport servers, areas in the facility, as required by the workflow and
via the internet, from anywhere in the world. operation processes.
Being an integrator, we now specialise in configuring
system and assembling different types of equipment
together.
harmony in motion Pteris Global Limited 11
annual report 2009
ourcorebusinesses
Air Cargo Handling Systems
We design and build a complete air cargo handling
system for a cargo hub or to supply individual equipment
to meet the specific needs of the customers.
Systems we build include:
• Manual, gravity systems Express Courier Handling Systems
• Powered systems
• Semi-automated or fully-automated systems Our courier systems are designed and built with
• Turnkey, fully integrated systems the aim to increase the efficiency of the operational
procedures in a parcel handling environment. The
Equipment we supply include: automated handling system ensures that all parcels
• Single or multi-level systems are stored and retrieved safely within the short time
• Transfer vehicles frame. The system also allows for quick turnaround
• Elevating transfer vehicles of process, saving time and costs.
• Automatic shuttles
• Storage and transfer conveyors With a wide customer base from different countries
• Right-angle and rotational decks such as Australia, Thailand, Taiwan and Singapore,
• Truck docks we are able to customise and design the systems
• Dolly docks according to the customer’s requirements. Thereby
• Lowering workstations (WEP and NEP) enhancing its capability, performance and ensuring
• Ball-mat and castor decks seamless operations in all parcel handling.
• Drive-over decks
• Powered and friction storage decks
• Pallet tug
12 Pteris Global Limited harmony in motion
annual report 2009
chairman’smessage
“
Our core values provide the foundation
for our future. We believe strongly in
upholding these values and we live by
these values in our business practices,
operations and dealings with our
”
customers, partners and our staff.
Lim Yong Wah
Non-Executive Chairman
Dear Shareholders,
The year 2009 was another challenging and banks and provided liquidity and stability in
eventful year. The U.S. financial crisis which the financial system.
began in late 2008 spread throughout the
world, affecting many economies. Singapore In November 2009, we embarked on a
was not spared from the effects of the crisis rights issue despite our low gearing. The
and our economy, like many others, went into rights issue was a success. It was 60.4%
recession. While the international financial over-subscribed. As a result, our financial
markets appear to be recovering from the position was significantly strengthened.
crisis, it is widely believed that the global We are grateful for the strong support
financial system is still fragile. that shareholders have given us in these
uncertain times.
At Pteris Global, we continued to be vigilant
and we made plans to strengthen our
financial position in the event of another Performance in FY2009
liquidity crisis. Fortunately for us, our Group In my message last year, I mentioned that
did not have high borrowings and our we should brace ourselves for the uncertain
gearing was low. We were also fortunate times and that a severe worldwide economic
that the Singapore government, together downturn was ahead of us. Most major
with other governments, supported the economies and many companies suffered
harmony in motion Pteris Global Limited 13
annual report 2009
chairman’smessage
setbacks. Fortunately, our Group has a well Access MRT System. Our system will provide
diversified market globally. a Downtown Baggage Check-in service at
Taipei’s Main Station for airline passengers.
Our performance in 2009 was better than in
2008. The Group’s turnover increased 15%
from $75.9 million in 2008 to $87.3 million in Our Rights Issue
2009. We suffered some setbacks due to the In December 2009, we successfully completed
poor economy in Europe that affected the our 2 for 5 rights issue at 13 cents per share.
performance of our UK subsidiary. In view This issue increased our shareholders’ funds
of this, we decided to write off the goodwill by $17.0 million. As at 31 December 2009,
of $1.5 million for our UK subsidiary, CDG the Group’s shareholders’ equity stood at
Systems Limited. $88.8 million as compared with $67.1 million
as at end of 2008.
The Group posted a net profit after tax of
$0.7 million in 2009 as compared to a net The rights issue has strengthened the Group’s
loss of $3.1 million in 2008. financial position and further advanced our
competitive position. The Group’s cash
We made good progress this year in our and cash equivalents increased from $17.8
marketing efforts. This is mainly because of million to $23.9 million. Our net borrowings
our engineering capabilities which received were also reduced from $6.1 million as at
further international recognition. Orders were end of 2008 to $350,000 as at end of 2009.
secured in various markets including China,
Mexico and India.
Our New Brand
There were three significant projects We embarked on a successful rebranding
secured in 2009. The first was a contract campaign to better position ourselves
to design and install the Baggage Handling in our worldwide marketing efforts in 2009.
System for Phoenix Sky Harbor International Our new identity and image is well accepted
Airport. This project was significant for us by our staff, partners and customers.
because it was our first project in the United
States. The superior high-level controls Our new brand identity conveys the warm,
which we developed in-house contributed to flexible and hardworking qualities of our
our success in this international tender. Our people that have made us a world-class
other significant project was to design and corporation.
supply the Baggage Handling System for
the new terminal at Queen Alia International We will continue to build on our brand
Airport in Jordan. persona with our customers, partners and
people to set ourselves apart from our
Our third significant project is the downtown competitors. For our staff, our new brand
train station Baggage Handling System in personality serves as a code of conduct for
Taiwan for Taoyuan International Airport communications with external parties.
14 Pteris Global Limited harmony in motion
annual report 2009
chairman’smessage
Our New Facilities Spearheading Innovation and
During the year, we shifted from our old Technology
premises of 18 years to our new location at We continue to develop new products and
Quality Road. solutions to serve the ever-changing needs
of airports. Our Pteris Global Airport Logistics
Our new and larger premises provided Suite (PALS) is a user-friendly, reliable and
us with additional space for research and efficient software solution that has proven
development and capacity to meet growing to be in a class of its own. We installed these
demands. We have also added several new high-level controls in our projects in Canada
amenities in the premises, including a and the United States. The features in PALS
multi-purpose auditorium to facilitate our enabled us to pass the stringent criteria
weekly in-house Learning and Development of a regulatory testing by the Canadian Air
programme, a testing and commissioning lab Transport Security Authority (CATSA) and
for our high-level controls system and technical U.S. Transportation Security Administration
reference libraries for our engineering staff. (TSA), in record time.
Maintaining Our Core Values Our innovative computer simulations and
Our core values provide the foundation for emulations have proven to be invaluable to
our future. We believe strongly in upholding the airport community that we serve. With
these values and we live by these values the simulation programme, customers can
in our business practices, operations and scientifically verify our design according
dealings with our customers, partners and to specific requirements and operation
our staff. capacity. It also allows our customers to
design systems or change their operations
In recent years, bids for project tenders have under various scenarios.
grown more competitive and aggressive.
We believe it is important that we maintain a Our People, Our Strength
high standard of integrity, trust and respect Continual training and upgrading of the
in the bidding process. This is in line with knowledge and skills of our staff remain as
our values and in building a trusting and our top priority. This is done mostly through
long-term quality relationship with all our our in-house Learning and Development
customers and partners. programme. The functional training and
sharing of inter-department knowledge is a
We shall continue to practice these values key part of the training programme. These
in our business practices and instill them in training sessions are carried out by a team
our team, despite changing practices and of over 25 in-house trainers.
values in the world market.
harmony in motion Pteris Global Limited 15
annual report 2009
chairman’smessage
Moving Ahead with a Dynamic We are committed to growing our shareholders’
Management Team value in the long term and we are optimistic
The Group is now led by a seasoned and that the Group will perform well in 2010.
dynamic management team with international
experience. They are backed by a team of I would like to thank my fellow Board members
highly motivated younger managers. Together, for their wise counsel; our customers and
they will steer the Group with their expertise, partners for their continued trust and support,
far-sighted vision and new ideas. and all members of our team for their
continuing hard work and dedication.
On behalf of the Board, I would like to
thank all our staff for their hard work and Finally, I would like to thank our shareholders
contributions to the growth of the company. for their support and confidence in Pteris
Global.
Looking Ahead
The pessimism in the first half of 2009 did Thank you.
not continue into 2010. The global economy
is slowly gaining momentum and Asia
continues to be a stronger market compared
to Europe and the United States.
For Pteris Global, we see more new
opportunities from Asia and the Middle East. Lim Yong Wah
With our new identity and positioning, we will Non-Executive Chairman
move forward and continue to enhance our 26 March 2010
reputation internationally.
16 Pteris Global Limited harmony in motion
annual report 2009
interviewwiththeceo
“
We are proud of our achievements
with our High-Level Controls. This is
a clear affirmation that our solutions
and their performance are one notch
”
above the rest.
Oon Chong Howe
Chief Executive Officer
1. Pteris Global underwent a rebranding for; how we connect with clients and reflects
campaign in 2009 from Inter-Roller Engineering our international nature. A new brand image also
Limited to its present name. What was the signifies a “rejuvenated” Inter-Roller. This will
rationale for the rebranding campaign? create a positive impact to our partners, clients,
media and investors’ communities at large.
We launched our new corporate name on the
eve of our 30th anniversary in January 2009. The second rationale for the rebranding was due
Inter-Roller Engineering Limited has evolved to the difficulties in trademark registration of
from being a manufacturer to becoming a total “Inter-Roller Engineering Limited” both locally
solutions provider of Airport Logistics Systems. and overseas. We were also aware of companies
Today, our customers have grown from Asia to whose name and nature of business are closely
Canada, Europe, Africa, the Middle East, the similar to ours in China and Latin America. This
United States and South America. Our business might create confusion for our customers and
model has also evolved significantly since our the business we represent. Hence, we needed
inception in 1979; in terms of our operations, a brand that we can trademark for our future.
services, product offerings and geographical
reach. We are now designing and building the
entire system, including implementation of our 2. Can you please elaborate on why the choice
specialised software and controls. of “Pteris Global Limited” as your new
company name?
As we enter into the next 30 years of corporate
life, we need a brand and an image that can We believe that the new name “Pteris Global
represent us and communicate our capabilities Limited” will better represent our Group’s
on a global scale. We embarked on a search for current businesses and activities. Deriving from
an identity that speaks exactly what we stand the Greek word “Ptera” meaning “wings”, it is
harmony in motion Pteris Global Limited 17
annual report 2009
interviewwiththeceo
used to describe a genus of wing-shaped ferns installation of Baggage Handling Systems (BHS)
found in all continents around the world. This in the United States.
signifies Pteris Global’s global presence and our
ability to soar above challenges. Being resilient In late 2009, we installed the High-Level Controls
and dynamic in nature, yet flexible and versatile at Calgary International Airport in Canada. Pteris
to weather changing conditions, this is the Global was the only company to pass the
hallmark of our hardworking people. stringent criteria by the Canadian Air Transport
Security Authority (CATSA) without any software
By the way, our new name is pronounced as deficiency during the first round of testing and
“Teris” with a silent “p”. commissioning. Because of our ability to meet
the customers’ requirements under strict
conditions, we were exempted from the second
3. The Company shifted into its new premises round of testing by CATSA.
in late April 2009. Tell us more about the new
office and why has the company decided the We upgraded the PLC systems at Phoenix Sky
move into its present building? Harbor International Airport in 2008. Our systems
performed beyond its expected capability and
There are a few reasons for the decision to shift. cleared the stringent testing by Transportation
Firstly, our old premises was built for equipment Security Administration (TSA). Because of the
design and manufacturing. As we are now a high performance capabilities of our systems,
system provider that offers software solutions, we were awarded another contract to supply
we require new facilities to cater for software and install a full Baggage Handling System for
development as well as software testing. Phoenix Sky Harbor International Airport in 2009.
Besides supplying the PLC systems, we also
Secondly, we have committed more resources provided the High-Level Controls, Visualisation
in research and development. Thus, we require Application and a Sort Allocation System (SAC).
additional area for the testing of our system
designs and new solutions. We are proud of our achievements with our
High-Level Controls. This is a clear affirmation
Thirdly, as our business is now global, the that our solutions and their performance are one
Singapore facilities need to take on the role of a notch above the rest.
logistics hub for other manufacturing facilities.
Lastly, the new office has increased 3 times in 5. What are Pteris Global’s plans for its technology
floor area. Among the new facilities added into development in 2010?
our headquarters are an auditorium to facilitate
our in-house training programme, and technical In the next 3 years, we shall double our research
reference libraries. On top of these, the new and development efforts. We want to introduce
office provides a more pleasant and conducive new and exciting products to expand our existing
working environment for our staff. product ranges.
With these new products, we shall be able to
4. What are the recent developments in the offer our clients a better system to improve the
High-Level Controls for Baggage Handling baggage handling operations at airports. This will,
System (BHS) for Pteris Global? in turn, translate to more projects and revenue
for the company.
We were awarded the certificate of approval from
the U.S. airport consultant for our High-Level
Controls in 2009. This certification marks the
Company’s compliance with the airports’ system
requirements in manufacturing, integration and
18 Pteris Global Limited harmony in motion
annual report 2009
boardofdirectors
From Left to Right:
Standing : Loh Chin Hua, John Sng Hwee Kwee,
Oon Chong Howe, Dr Soon Kong Ann,
Seated : Haider Mohamedally Sithawalla, Lim Yong Wah,
Low Kok Hua, Tan Guong Ching
Lim Yong Wah Jurong Town Council. He was Chairman of several
Non-Executive Chairman and real estate companies as well as Chairman of the
Independent Director Board of Governors of the Singapore Polytechnic.
Mr Lim joined the Board as Director in 1990 and He has been actively involved in the healthcare
was appointed Chairman in 1991. He was last sector in Singapore, having previously served as
re-elected to the Board on 18 April 2006 and now Chairman of National University Hospital (NUH)
serves as Non-Executive Chairman and Independent and the SingHealth Group. He currently chairs the
Director. Board of the National University Health Systems
Pte Ltd (NUHS) and the Board of Jurong Health
A well respected business leader and banker, Mr Lim Services Pte Ltd.
joined Singapore’s flagship bank, the Development
Bank of Singapore (DBS) in 1969, where he held In 1997, Mr Lim was appointed to chair the
various senior management positions for 21 years. Corporate Finance Committee which was
tasked to make recommendations concerning
Mr Lim also previously served as Director on the philosophy and framework of regulation,
the Boards of several listed companies. He also standards of disclosure and measures to liberalise
served as a Director on statutory boards such as and develop Singapore as an international
the Inland Revenue Authority of Singapore and corporate fund-raising centre.
harmony in motion Pteris Global Limited 19
annual report 2009
boardofdirectors
He was also Chairman of the PIEU Multipurpose Mr Sithawalla was with the Economic Development
Co-operative, SILO Multipurpose Co-operative and Board and the Economic Division of the Ministry of
NTUC Welcome. These three Co-operatives were Finance for 13 years, including serving as Deputy
merged to form NTUC Fairprice Co-operative Ltd. Secretary in the Economic Development Division
of the Ministry of Finance.
Mr Lim holds a degree in Accountancy from the
former University of Singapore. He was formerly Singapore’s High Commissioner
to Mauritius, Zimbabwe and Tanzania.
Low Kok Hua Mr Sithawalla graduated from The University of
Non-Executive Director Malaya (Singapore) with a Bachelor of Arts (Honours)
degree in 1959, majoring in Economics.
Mr Low is one of the founding shareholders of
the company. He was last re-elected to the Board
28 April 2008. He is a Non-Executive Director and Loh Chin Hua
is a member of the Nomination and Remuneration Independent Director
Committee. He chaired the Board of the then Inter-
Roller Engineering Ltd until 1991. Mr Loh joined the Board as an Independent Director
in 2000 and was last re-elected to the Board on
A well respected entrepreneur in Singapore’s 28 April 2008. He is a member of the Nomination
business circles, Mr. Low has more than 40 years and Remuneration Committee as well as the Audit
of experience in the engineering and hardware Committee.
industry. He is the Managing Director of Chuan Seng
Heng Hardware Co. Pte Ltd. He sits on the Board Mr Loh is Managing Director of Alpha Investment
of several private companies such as Inter-Roller Partners Limited (AIP), the real estate fund
Investments Pte Ltd and Wine Network Pte Ltd. management arm of the Keppel Land Group. He
has served as an Executive Chairman in Asia Real
Mr Low is also the Permanent Honorary President of Estate Fund Management Ltd. He has over 20 years
the Singapore Metal and Machinery Association and of experience in real estate investing and funds
an active member of Singapore Hokkien Huay Kuan. management, spanning the United States, Europe
and Asia.
Haider Mohamedally Sithawalla Prior to joining AIP, Mr Loh was Managing Director
Independent Director of GRA (Singapore) Pte Ltd, the Asian real estate
fund management arm of the Prudential Insurance
Mr Sithawalla joined the Board as an Independent Company of America.
Director in 1995 and was last re-elected to the
Board on 28 April 2008. He chairs the Nomination Mr Loh started his career in real estate investment
and Remuneration Committee and also serves as a with the Government of Singapore Investment
member of the Audit Committee. Corporation (GIC). During the 10 years with GIC, he
has held appointments in the San Francisco office and
Mr Sithawalla is the Executive Director of KSP was the head of the European real estate group in
Investments Pte Ltd and a Director of Finance London before returning to head the Asian real estate
for AEC Education Plc (U.K.). He is also the group.
Chairman of Warees Investments Pte Ltd as well
as Education Trust Fund, and sits on the Board of A Colombo Plan scholar, Mr Loh graduated from
several other private companies in Singapore, India Auckland University with a Bachelor degree in Property
and Mauritius. Administration. He also obtained his post-graduate
degree from the Pepperdine University’s Presidential/
Key Executive MBA Programme. He is a Chartered
Financial Analyst (CFA) and is also a registered valuer
with New Zealand Institute of Valuers.
20 Pteris Global Limited harmony in motion
annual report 2009
boardofdirectors
Tan Guong Ching Institution, Supervisor of Mee Toh School Management
Independent Director Committee and a member of the Building Committee of
Kong Meng San Phor Kark See Monastry.
Mr Tan joined the Board as an Independent Director
in 2007 and was last re-elected to the Board on 28 Dr Soon graduated from McGill University in Canada
April 2008. He is a member of the Nomination and with a Bachelor degree in Civil Engineering. He
Remuneration Committee. also has a Masters degree in Civil Engineering and
Doctorate Degree from the Massachusetts Institute of
Mr Tan is the Chairman of several listed and multi- Technology (MIT).
national companies such as Singapore Technologies
Telemedia Pte Ltd, Singapore Technologies
Aerospace Limited, Starhub Ltd, Temasek Life Oon Chong Howe
Sciences Laboratory Ltd and Joil (S) Pte Ltd. He also Executive Director & Chief Executive Officer
serves as a Director of several private and public
companies. Mr Oon was appointed as the Chief Executive Officer
of Pteris Global Limited on 1 July 2007. Prior to joining
He commenced his career with the Singapore Civil Pteris Global in 2006, Mr Oon was the Regional General
Service in 1972. He has held various senior positions in Manager with Agfa (Asean) Sdn Bhd and General
the civil service such as Principal Private Secretary to the Manager with Federal Packages Sdn Bhd for over 10
Prime Minister, Permanent Secretary of the Ministries years. He has also held various positions such as engineer
of Environment, Home Affairs and Communications and with Singapore Telecoms Pte Ltd and Submarine Cable
Information. He was also Chief Executive Officer of the System Division and research engineer with Bell
Singapore Housing and Development Board. Mr Tan Northern Research in Ottawa, Canada.
retired from the Singapore Civil Service in August 2005.
He was last re-elected to the Board of Directors on
A Colombo Plan Scholar, Mr Tan majored in Chemical 18 April 2007.
Engineering at McMaster University in Canada,
graduating with a Bachelor of Engineering (Dean’s Mr Oon holds a Master of Science degree in Electrical
Honours) Degree in 1970. He went on to obtain his Engineering from University of Colorado-Boulder,
Master of Engineering Degree in 1972. He has also Masters of Business Administration degree from Hull
attended various management programmes such as University, and a Bachelor of Science degree in Electrical
the Executive Management Programme at INSEAD Engineering from University of Wisconsin-Madison.
(1980) and the Advanced Management Programme at
Wharton (1998).
John Sng Hwee Kwee
Executive Director & Executive Vice President
Dr Soon Kong Ann
Independent Director Mr Sng was appointed as Executive Director on
26 August 2008. He joined Pteris Global in 1982
Dr Soon joined the Board as an Independent Director and has taken on various key roles in the senior
in 2008. He is a member of the Audit Committee. management including Head of Business Units, Head
of Design & Engineering and Project Director.
Dr Soon is the Director of Leong Huat Hardware Pte Ltd
and its subsidiaries, namely Leong Huat (Investment) Mr Sng presently heads the Technology Division and is
Pte Ltd, Leong Huat Equities Pte Ltd, Prefab Structures responsible for leading the Group’s technical solutions,
Pte Ltd, Piasim Corporate Pte Ltd, LHH Properties (M) quality and product development. He also assists the
Sdn Bhd and LHH Land (M) Sdn Bhd. Chief Executive Officer in implementing strategic plans
of the Group.
Dr Soon is a Council Member of the Singapore Chinese
Chamber of Commerce and Industry since 2003. He With more than 27 years of experience, Mr Sng has a
is also the Vice President of the Singapore Metal and vast knowledge in Airport Logistics System and plays a
Machinery Association, Vice Chairman in the Industry pivotal role in Pteris Global’s senior management team.
Committee of The Singapore Chinese Chamber of
Commerce and Industry, Vice Chairman of Board Mr Sng holds a Diploma in Mechanical Engineering
of Directors and Board of Governors in Hwa Chong from Singapore Polytechnic.
harmony in motion Pteris Global Limited 21
annual report 2009
seniormanagement
From left to right: Steven Lwi Tong Boon • Vairakkannu Singaram • Chai Fook Chuan • Chua Choon Beng • Teh Sin Kim
Steven Lwi Tong Boon Vairakkannu Singaram
Chief Financial Officer/Executive Vice President Executive Vice President
Head, India/Europe/South America Business Divisions
Mr Lwi joined Pteris Global Limited as Chief Financial
Officer in November 2008. He is responsible for Mr Singaram heads the India, Europe and South
the Group’s financial and management accounting, America Business Divisions and is chiefly responsible
treasury, taxation and other corporate compliance for the business development and marketing of airport
matters. He also serves as Company Secretary of logistics systems in these regions. He also heads
the Company. IR Engineering Services, Pteris Global’s subsidiary
office in Singapore overseeing the Operation and
Mr Lwi has more than 16 years of experience in Maintenance function at Singapore Changi Airport.
finance and accounting, treasury, mergers and
acquisitions. Prior to joining the Group, he has held Mr Singaram joined Pteris Global in 1988 and has
various managerial positions, including Chief Financial more than 20 years of extensive experience in sales
Officer of Interra Resources Limited, heading the and marketing, electrical controls as well as project
Compliance and Internal Audit Department of Fraser management.
Securities Pte Ltd and as Financial Controller of Ferrell
Asset Management Pte Ltd. He was also an auditor He holds a Bachelor degree in Business Administration
with PricewaterhouseCoopers. from RMIT University in Melbourne, Australia.
Mr Lwi holds a Bachelor of Accountancy (Honors)
degree from Nanyang Technological University and
is a Certified Public Accountant with the Institute of
Certified Public Accountants of Singapore.
22 Pteris Global Limited harmony in motion
annual report 2009
seniormanagement
From left to right: Mike Fong Meng Chai • Mohamad Taufik Bin Mohamad Tahir • Chai Kor Yoon • Daniel Lim Beng Hock • Ivan Lim Wi Aun
Chai Fook Chuan Chua Choon Beng
Executive Vice President Chief Information Officer/Senior Vice President
Systems Engineering Head, System and Software Development
Head, Information Technology
Mr Chai is one of the pioneer batch of Engineers
that joined Inter-Roller Engineering in 1981. He has Mr Chua heads the Group’s System and Software
been with the company for more than 27 years, Development function. He leads one of the largest
and is a specialist with extensive knowledge and departments in Pteris Global, consisting of Computer
experience in mechanical design and systems Software, Automation and Control Engineers. He
engineering in material handling and airport logistics has more than 15 years of experience in the field of
systems. automation and controls engineering, and is chiefly
responsible for system and software development
Besides Systems Engineering Design, he also plays for airport logistics systems. He also oversees the
a key role in systems proposal and costing. His Information Technology Group.
strong technical knowledge and background has
also contributed to various product and systems Prior to joining Pteris Global in 2002, he has worked
development over the years. in China in the field of automation and controls
engineering. He has successfully completed software
He holds a Diploma in Mechanical Engineering integration projects for most of Pteris Global’s feature
from Singapore Polytechnic. projects worldwide.
Mr Chua holds a Bachelor degree in Electrical and
Electronics Engineering (Honours), majoring in
Control Engineering from the Nanyang Technological
University of Singapore.
harmony in motion Pteris Global Limited 23
annual report 2009
seniormanagement
Teh Sin Kim Mohamad Taufik Bin Mohamad Tahir
Senior Vice President Senior Vice President
Head, Manufacturing Head, Middle East/Africa Business Divisions
General Manager, IR (Middle East) LLC
Mr Teh heads the Group’s manufacturing function.
He oversees the factory operations of Pteris Global Mr Taufik heads the Middle East and Africa Business
in Singapore, Malaysia and China. Divisions, and is chiefly responsible for the business
development and marketing of airport logistics systems
He has been with Pteris Global for more than a in these regions. He is also the General Manager of IR
decade and with more than 40 years of extensive (Middle East) Limited Liability Company, Pteris Global’s
manufacturing experience, he has played a subsidiary office in Dubai, United Arab Emirates.
significant role in developing and streamlining the
manufacturing operations and processes over the Mr Taufik joined Pteris Global in 1989 and oversaw the
years. He is also actively involved in training and Operation and Maintenance team at Singapore Changi
grooming production engineers and supervisors. Airport from 1994 till 1999. He also has extensive
project management experience and has successfully
Prior to joining Pteris Global in 1997, Mr Teh held completed key baggage handling system projects in
various supervisory and managerial positions for Africa and the United Arab Emirates.
various companies in the marine and engineering
industries in Singapore. He holds a double Diploma in Engineering and
Management Studies from Singapore Polytechnic and
a Bachelor degree in Business from RMIT University in
Mike Fong Meng Chai Melbourne, Australia.
Senior Vice President
Head, China/Southeast Asia/North America
Business Divisions Daniel Lim Beng Hock
Head, System Proposal & Costing Group Senior Vice President
Head, Control and System Integration
Mr Fong heads the China, Southeast Asia and
North America Business Divisions, and is chiefly Mr Lim heads the Control and System Integration
responsible for the business development and function and leads the Group’s Electrical Project
marketing of airport logistics systems in these Engineers.
regions. He also oversees the System Proposal &
Costing Group. Mr Lim joined Pteris Global in 1991 and has more
than 18 years of project management experience as
Mr Fong joined Pteris Global in 1991 as a project well as extensive technical knowledge in the field
engineer and has now more than 18 years of electrical engineering. He has played a key role in
experience in material handling and airport logistics Pteris Global’s feature projects in Singapore, Middle
systems. He has extensive knowledge in project East, Asia and the United States.
management and has successfully completed some
of Pteris Global’s feature airport projects such as He holds a Diploma in Electrical & Electronic Engineering
the baggage handling system projects in Singapore from Ngee Ann Polytechnic in Singapore.
Changi Airport Terminal 3 and Beijing Capital
International Airport Terminal 3 respectively.
He holds a double Diploma (Merit) in Mechanical
Engineering and Management Studies from Singapore
Polytechnic.
24 Pteris Global Limited harmony in motion
annual report 2009
seniormanagement
Chai Kor Yoon Ivan Lim Wi Aun
Senior Vice President Senior Vice President
Head, System Engineering and Design Head, Human Resource and Administration
Head, Corporate Services
Mr Chai leads the System Engineering and Design Group Internal Auditor
function.
Mr Lim leads the Group’s Human Resource and
Mr Chai joined Pteris Global in 1982 and is one of the Administration function and is responsible for global
pioneer batch of Mechanical Design Engineers in the recruitment, policy formulation and implementation,
then Inter-Roller Engineering. He has more than 27 staff training and development as well as other
years of extensive experience in mechanical design strategic HR initiatives such as talent and performance
and plays a pivotal role in design conceptualisation management.
and product standardisation.
He also heads Corporate Services and oversees
He is also actively involved in the training and corporate and marketing communications, organi-
grooming of mechanical design engineers in sational planning as well as contract management. He
Singapore as well as our other subsidiary offices. is also the Group Internal Auditor since 2004.
He holds a Diploma in Mechanical Engineering Prior to joining Pteris Global in 2003, Mr Lim was with
from Singapore Polytechnic. JPMorgan Chase Bank. He is currently Vice President
on the Board of Cuesports Singapore, a National Sports
Association in Singapore.
He holds a Bachelor degree in Economics and Finance
(minor in Corporate Law) from the University of
Western Australia. He also has an MBA specialising in
International Business Management.
harmony in motion Pteris Global Limited 25
annual report 2009
managementofsubsidiaries
Rodger Cook Liu Dan
General Manager General Manager
Pteris Global (USA) Inc. Pteris Global (Beijing) Ltd
Mr Cook joined Pteris Global in 2008 Mr Liu is General Manager of
and is General Manager of Pteris Pteris Global (Beijing) Ltd. He
Global (USA) Inc. He is responsible is responsible for the business
for the business development development and marketing of
and marketing of airport logistics airport logistics systems in China.
systems in the United States.
Prior to joining Pteris Global in
Rodger Cook Prior to joining Pteris Global, he 2000, Mr Liu has more than 10
was with Rockwell Automation years in the construction industry
and has more than 15 years in Singapore and China.
experience in sales and marketing
and management. He holds a Bachelor degree in
Engineering from Hebei University
Mr Cook holds a Bachelor degree of Technology in China and an
in Mechanical Engineering from MBA from National University of
Drexel University in Philadelphia and Singapore.
an MBA from Villanova University.
Chen Tian Ling
Tew Leong Fatt General Manager
Tew Leong Fatt General Manager Pteris Global (Suzhou) Ltd
Pteris Global Sdn Bhd
Mr Chen is General Manager of
Mr Tew heads IR Engineering Sdn Pteris Global (Suzhou) Ltd. He
Bhd and oversees the business is responsible for the business
and manufacturing operations in development and marketing of
Malaysia. airport logistics systems in China
and oversees the manufacturing
He joined the company in 2007 and operations at the Suzhou Subsidiary.
has accumulated more than 27 years
of experience in manufacturing Prior to joining Pteris Global in
and management. He has held 2005, Mr Chen has worked for
a range of senior management various airports in China and has
Liu Dan positions, with the last 17 years in more than 10 years of project
general management positions at management experience.
various public-listed manufacturing
companies in Malaysia. He holds a Bachelor degree in
Electrical Engineering from the
Mr Tew holds a Bachelor of Science Beijing Science and Technology
(Honours) degree in Mechanical University and an MBA from
Engineering from United Kingdom. Xiamen University in China.
Chen Tian Ling
26 Pteris Global Limited harmony in motion
annual report 2009
MORE THAN
150 PROJECTS IN
OVER 40 COuNTRIES
Successful airport projects in Beijing Capital International
Airport, Shanghai Pudong International Airport, New
Bangkok International Airport, Singapore Changi Airport,
Dubai International Airport, Phoenix Sky Harbor
International Airport and many more.
ACROSS 6 CONTINENTS
In Americas, Europe, Middle East, Asia, Africa and Oceania.
Pteris Global office indoor garden
harmony in motion Pteris Global Limited 27
annual report 2009
Harmony in Motion. Three words that perfectly encapsulate
what the Pteris Global’s brand mission is all about. We strive to
be a living company by constantly fostering harmony with our
people, our partners, and our customers.
PTERIS GLOBAL
IS ASIA’S NO. 1
AND ONE OF
THE WORLD’S
LEADING AIRPORT
LOGISTICS
SYSTEMS
INTEGRATORS.
28 Pteris Global Limited harmony in motion
annual report 2009
Pteris Global Koi Pond
harmony in motion Pteris Global Limited 29
annual report 2009
Pteris Global Reception
Pteris Global Technical Reference Library
Pteris Global Staff in Meeting
30 Pteris Global Limited harmony in motion
annual report 2009
Spearheading
INNOVATION AND TECHNOLOGY
With simulation and emulation programmes.
WHERE ENGINEERING
Ideas TAKE FLIGHT
Pteris Global Airport Logistics Suite (PALS) provides for
seamless integration solutions.
Redefining
AIRPORT LOGISTICS SYSTEMS
Pteris Global’s innovative research and development
projects aim at turning customer needs and technologies
into economic success.
harmony in motion Pteris Global Limited 31
annual report 2009
Harmony in Motion. Focus on fulfilling customers’ needs
and make available solutions for new challenges.
INNOVATIVE,
CREATIVE AND
DYNAMIC, WE
TAKE THE LEAD IN
HARNESSING NEW
TECHNOLOGIES AND
IDEAS; CONSTANTLY
SHAPING SOLuTIONS
TO ACHIEVE NEW
BREAKTHROuGHS.
32 Pteris Global Limited harmony in motion
annual report 2009
harmony in motion Pteris Global Limited 33
annual report 2009
Pteris Global Simulation for
Scenario Planning Design
34 Pteris Global Limited harmony in motion
annual report 2009
HARMONY WITHIN
Our People
From evaluation to design, simulation to project
management, we believe in working in One Harmony,
harnessing the best of our collective expertise to
deliver world-class solutions, at all times.
HARMONY WITH
Our Partners
We work closely and harmoniously with all our partners
in meeting their expectations. We understand that a
genuine and sincere partnership is the cornerstone of
every long-term relationship.
HARMONY WITH
Our Customers
Working closely with our customers, we are dedicated
to the constant upgrading of our infrastructure and
facilities, to enable airport systems to function/operate
blissfully in seamless motion.
harmony in motion Pteris Global Limited 35
annual report 2009
Harmony in Motion in all our interactions.
PEOPLE + PARTNERS + CuSTOMERS
WE STRIVE TO BE
A LIVING COMPANY
BY CONSTANTLY
FOSTERING
HARMONY WITH
OuR PEOPLE, OuR
PARTNERS, AND
OuR CuSTOMERS.
36 Pteris Global Limited harmony in motion
annual report 2009
OuR
PEOPLE
OuR
PARTNERS
harmony in motion Pteris Global Limited 37
annual report 2009
OuR
CuSTOMERS
38 Pteris Global Limited harmony in motion
annual report 2009
Key Project IN 2009
Phoenix Sky Harbor International Airport in Arizona, USA.
37 MILLION
In annual passenger volume.
19 th BuSIEST AIRPORT IN
THE WORLD*
With over 37,000,000 passengers and more than 1,200+
aircraft arrivals and departures daily.
* refers to the world’s busiest airports by passenger traffic, as measured by number of total passengers
source: Airports Council International, Passenger Traffic for past 12 months ending December 2009
+ source: Phoenix Sky Harbor International Airport
Phoenix Sky Harbor International Airport
Arizona, uSA
harmony in motion Pteris Global Limited 39
annual report 2009
Harmony in Motion in creating enduring partnerships and
breathing life into airports around the world. Everyday.
“PTERIS GLOBAL SOFTWARE
TEAM HAS PROVEN TO uS
IN THE LAST 2 YEARS THAT
THEIR DELIVERY APPROACH
uSING SIMuLATION AND
EMuLATION ARE ONE
NOTCH ABOVE OTHERS.
THE APPROACH ALSO
MAKES TESTING AND
COMMISSIONING RESuLTS
MORE PREDICTABLE AS
ERRORS COuLD BE SPOTTED
MuCH EARLIER.”
Thomas Kenneally, Project Manager
Turner Construction Company.
Consultant for the Phoenix Sky Harbor
International Airport project.
40 Pteris Global Limited harmony in motion
annual report 2009
harmony in motion Pteris Global Limited 41
annual report 2009
Phoenix Sky Harbor International Airport,
Arizona, uSA
Photo credit: Mark Bolsclair Photography
Architect: DWL Architects + Planners, Inc
42 Pteris Global Limited harmony in motion
annual report 2009
Key Project IN 2009
Calgary International Airport, Canada.
10 MILLION
In annual passenger volume.
4 th BuSIEST AIRPORT IN
CANADA*
With over 10 million passengers and more than19,000+
aircraft arrivals and departures monthly.
* refers to the Canada’s airports by passenger traffic, as measured by number of total passengers
source: Calgary International Airport and Wikipedia
+ source: Statistics Canada
harmony in motion Pteris Global Limited 43
annual report 2009
Harmony in Motion at virtually every link in the value chain.
“THE PRE-quALIFICATION
TESTING WENT SO WELL
THAT THE TESTING TEAM
WILL NOT BE REquIRED
TO RETuRN NExT WEEK. THE
BAGGAGE HANDLING SYSTEM
PASSED ALL THE CATSA
HOLD BAG SCREENING
TRACKING TESTS WITH NO
SOFTWARE DEFICIENCIES.
AS A RESuLT, THE FINAL
ACCEPTANCE TEST IS NOT
REquIRED AND THE TESTING
PLANNED FOR NExT WEEK IS
THEREFORE CANCELLED.”
Karl Landry , Program Leader
Hold Bag Screening/Chef de Programme, CBE
Canadian Air Transport Security Authority (CATSA)
44 Pteris Global Limited harmony in motion
annual report 2009
harmony in motion Pteris Global Limited 45
annual report 2009
Calgary International Airport, Canada
46 Pteris Global Limited harmony in motion
annual report 2009
geographicalreach
Canada
AMERICAS
CAnAdA
BAGGAGE HAndLInG SYSTEMS
• Calgary International Airport
• Winnipeg James Armstrong United States
Richardson International Airport of America
AIR CARGO HAndLInG SYSTEMS
• Air Canada (Montreal Trudeau Airport)
• Air Canada (Toronto Airport)
• Air Canada (Vancouver International Airport)
ECUAdOR
BAGGAGE HAndLInG SYSTEM
• New Quito International Airport Mexico
MExICO
BAGGAGE HAndLInG SYSTEM
• Mexico City International Airport
PAnAMA
BAGGAGE HAndLInG SYSTEM Curacao
• Tocumen International Airport
UnITEd STATES Of AMERICA
Panama
BAGGAGE HAndLInG SYSTEM
• Phoenix Sky Harbor International Airport
Terminal 3 & 4 UnITEd ARAB EMIRATES
AIR CARGO HAndLInG SYSTEMS BAGGAGE HAndLInG SYSTEMS Ecuador
• Air Canada • Dubai International Airport Terminal 1, 2 & 3
(Chicago O’Hare International Airport) • Dubai World Central International Airport
• Air Canada (formerly known as Jebel Ali International Airport)
(Los Angeles International Airport)
• Air France In-fLIGHT CATERInG SYSTEM
(John F. Kennedy International Airport) • Emirates Airline
• Air France
(Los Angeles International Airport) AIR CARGO HAndLInG SYSTEMS
• Flying Tigers • Government of Abu Dhabi
(Chicago O’Hare International Airport) (Abu Dhabi International Airport)
• Government of Fujairah
CARIBBEAn (Fujairah International Airport)
• Government of Sharjah
CURACAO (Sharjah International Airport)
BAGGAGE HAndLInG SYSTEM
• Curacao International Airport EUROPE
(Netherland Antilles) CYPRUS
MIddLE EAST & AfRICA BAGGAGE HAndLInG SYSTEM
• Paphos International Airport
AzERBAIjAn
AIR CARGO HAndLInG SYSTEM CzECH REPUBLIC
• Silk Way Airlines (Baku Cargo Terminial, AIR CARGO HAndLInG SYSTEM
Heydar Aliyev International Airport) • Ogden Aviation (Prague Airport)
EGYPT BELGIUM
BAGGAGE HAndLInG SYSTEM AIR CARGO HAndLInG SYSTEM
• Cairo International Airport • Swissport International Ltd (Liege Airport)
KUWAIT GERMAnY
AIR CARGO HAndLInG SYSTEM AIR CARGO HAndLInG SYSTEM
• Kuwait Airways (Kuwait International • Trans Mediterranean Airways AIR CARGO HAndLInG SYSTEMS
Airport) (Frankfurt Airport) • Aer Lingus (Dublin International Airport)
• Aer Lingus (Shanon Airport)
jORdAn fRAnCE • Air Canada (London Heathrow Airport)
• Air Canada (Radius Park, London Heathrow)
BAGGAGE HAndLInG SYSTEM AIR CARGO HAndLInG SYSTEMS • Air France (London Heathrow Airport)
• Queen Alia International Airport • Air lnter (Paris Orly Airport) • Allport (London Heathrow Airport)
• Deutsche Lufthansa • American Airlines (London Heathrow Airport)
LEBAnOn (Paris Charles de Gaulle Airport) • British Airport Authority (Glasgow International
AIR CARGO HAndLInG SYSTEM • Flying Tiger Line Airport)
• Trans Mediterranean Airways (Paris Charles de Gaulle Airport) • British Airways (Belfast International Airport)
(Beirut International Airport) • Japan Airlines • British Airways (Birmingham International Airport)
(Paris Charles de Gaulle Airport) • British Airways (London Gatwick Airport)
MALdIvES • British Airways (London Heathrow Airport)
HUnGARY • British Airways (Manchester International Airport)
BAGGAGE HAndLInG SYSTEM • Eagle Global Logistics (London Heathrow Airport)
• Male International Airport AIR CARGO HAndLInG SYSTEM • Exel Logistics (London Heathrow Airport)
• Malév Hungarian Airlines (Budapest) • Flying Tiger Line (London Heathrow Airport)
nIGERIA • Japan Airlines (London Heathrow Airport)
nETHERLAndS • London Luton Cargo (London Luton Airport)
BAGGAGE HAndLInG SYSTEM • Menzies World Cargo (East Midlands Airport)
• Lagos International Airport AIR CARGO HAndLInG SYSTEMS
• Maastricht Handling Services • Menzies World Cargo (London Gatwick Airport)
QATAR (Maastricht Aachen Airport) • Menzies World Cargo (London Heathrow Airport)
• Trans Mediterranean Airways • Nippon Express Air Cargo Handling System
BAGGAGE HAndLInG SYSTEMS (Schiphol Airport, Amsterdam) (Hayes Middlesex)
• Doha Emiri Terminal • Nippon Express Air Cargo Handling System
• New Doha International Airport RUSSIAn fEdERATIOn (Manchester International Airport)
• Nippon Express (UK) Ltd (London Heathrow
In-fLIGHT CATERInG SYSTEM AIR CARGO HAndLInG SYSTEMS Airport)
• Qatar Airways • East Line Group • Plane Handling Ltd (London Heathrow Airport)
(Domodedovo International Airport, Moscow) • Servisair Cargo (Birmingham International Airport)
SAUdI ARABIA • JSC Alliance-Prom Company • Servisair Cargo (London Gatwick Airport)
(Khabarovsk Airport) • Servisair Cargo (London Stansted Airport)
BAGGAGE HAndLInG SYSTEM • Vladivostok Air • Servisair Cargo (Manchester International Airport)
• King Fahd International Airport (Vladivostok International Airport) • Trans Mediterranean Airways (London Heathrow
Airport)
SYRIA UKRAInE
BAGGAGE HAndLInG SYSTEM AIR CARGO HAndLInG SYSTEM ExPRESS COURIER HAndLInG SYSTEMS
• Damascus International Airport • Simferopol International Airport • Business Post (London Stansted Airport)
• DHL Danzas (Hayes, Middlesex)
TUnISIA UnITEd KInGdOM • FedEx (Heathrow & Central London)
• Royal Mail (Coventry Airport)
BAGGAGE HAndLInG SYSTEMS BAGGAGE HAndLInG SYSTEMS • Royal Mail (London Heathrow Airport)
• Djerba - Zarzis International Airport • Coventry Airport • Royal Mail (London Stansted Airport)
(formerly known as L’Aeroport • Durham Tees Valley Airport • Royal Mail Midlands Distribution Centre (East
International) (formerly Teeside Aiport) Daventry)
• Tunis Carthage International Airport • Manchester Airport • TNT (London Heathrow Airport)
harmony in motion Pteris Global Limited 47
annual report 2009
Russian federation
United Kingdom
Germany
netherlands Czech Republic
Belgium Hungary Ukraine
france
Azerbaijan
Syria
Tunisia Lebanon South Korea
Cyprus jordan Kuwait China
Egypt
Qatar Taiwan
India Hong Kong
Saudi Arabia U.A.E
Myanmar
Thailand
vietnam Philippines
Cambodia
Sri Lanka
nigeria Malaysia
Maldives
Singapore
Indonesia
IndIA
BAGGAGE HAndLInG SYSTEMS
• Ahmedabad Airport
• Amritsar International Airport
• Calicut International Airport
• Chennai Anna International Airport
• Chhatrapati Shivaji International Airport
• Indira Gandhi International Airport Australia
• Indore Airport
• Jaipur International Airport
• Madurai Airport
• Maharana Pratap Airport (Udaipur)
• Mangalore International Airport
• Nagpur Airport
• Pune International Airport
• Raipur Airport
• Srinagar International Airport
• Trivandrum International Airport
AIR CARGO HAndLInG SYSTEM
• Chennai Airport Cargo
ExPRESS COURIER HAndLInG SYSTEM
• DHL/Blue Dart Express Ltd
IndOnESIA
ASIA BAGGAGE HAndLInG SYSTEMS
• Bali International Airport Terminal 2
CAMBOdIA • Halim Perdanakusama Airport
BAGGAGE HAndLInG SYSTEM • Jogjakarta Airport
• Siem Reap Airport • Kemayoran Airport SOUTH KOREA
• Manado International Airport In-fLIGHT CATERInG SYSTEM
CHInA • Pekan Baru Airport • Korean Airline
• Surabaya International Airport
BAGGAGE HAndLInG SYSTEMS
• Beijing Capital International Airport SRI LAnKA
MALAYSIA
• Changsha Huanghua International Airport AIR CARGO HAndLInG SYSTEM
• Chongqing Jiangbei International Airport BAGGAGE HAndLInG SYSTEMS • Government of Sri Lanka
• Erlianhaote Airport (Inner Mongolia) • Kota Kinabalu International Airport (Colombo International Airport)
• Fuzhou Changle International Airport • Kuching International Airport
• Haikou Meilan International Airport • Miri International Airport TAIWAn
• Hangzhou Xiaoshan International Airport • Senai International Airport
• Harbin Taiping International Airport • Subang International Airport Terminal 1 BAGGAGE HAndLInG SYSTEM
• Heilongjiang Daqing Airport • Taoyuan International Airport City Access
• Huherhaote Baita Airport (Inner Mongolia) MYAnMAR MRT System
• Jinan Airport BAGGAGE HAndLInG SYSTEM
• Nanchang Changbei International Airport ExPRESS COURIER HAndLInG SYSTEM
• Yangon International Airport • FedEx Chiang Kai Shek Airport
• Ordos International Airport
• Qingdao Liuting International Airport PHILIPPInES
• Qinghai Yusu Airport THAILAnd
• Shanghai Pudong International Airport BAGGAGE HAndLInG SYSTEM
• Shenyang Taoxian International Airport • Ninoy Aquino International Airport Terminal 3 BAGGAGE HAndLInG SYSTEMS
• Taiyuan Wusu International Airport • Hat Yai International Airport
• Wenzhou Yongqiang International Airport ExPRESS COURIER HAndLInG SYSTEMS • Suvarnabhumi International Airport
• Xi’an Xianyang International Airport • FedEx, Subic Bay International Airport (New Bangkok International Airport)
• Xiamen Gaoqi International Airport • UPS, Clarke Air Base
• Zhejiang Yiwu Airport ExPRESS COURIER HAndLInG SYSTEM
• Zhenzhou Xinzheng International Airport SInGAPORE • DHL Bangkok
AIR CARGO HAndLInG SYSTEMS BAGGAGE HAndLInG SYSTEMS vIETnAM
• Xiamen Air Cargo Limited • Changi Airport Terminal 1, 2 & 3
• Changi Budget Terminal BAGGAGE HAndLInG SYSTEMS
• Xinjiang Urumuqi Airport • Singapore Cruise Centre • Noi Bai International Airport (Hanoi)
• Tan Son Nhat International Airport
HOnG KOnG In-fLIGHT CATERInG SYSTEM
BAGGAGE HAndLInG SYSTEM • SATS Catering Pte Ltd OCEAnIA
• Hong Kong Sky Plaza International Airport AUSTRALIA
ExPRESS COURIER HAndLInG SYSTEMS
AIR CARGO HAndLInG SYSTEM • DHL Singapore BAGGAGE HAndLInG SYSTEM
• Super Hub Air Cargo Terminal • UPS Singapore • Brisbane Airport
ExPRESS COURIER HAndLInG SYSTEM AIR CARGO HAndLInG SYSTEM ExPRESS COURIER HAndLInG SYSTEM
• DHL Hong Kong • Schenker Singapore Pte Ltd • UPS Sydney
48 Pteris Global Limited harmony in motion
annual report 2009
operationandfinancialreview
FINANCIAL REVIEW
Group Revenue
The Group’s revenue for FY 2009 rose by 15% to S$87.3 million (FY 2008: S$75.9 million). The higher revenue
generated was mainly due to the work done for projects such as Calgary International Airport, Phoenix Sky
Harbor International Airport, Winnipeg James Armstrong Richardson International Airport and New Doha
International Airport.
REVENuE
INCREASED
15%
revenue
(S$’000)
160,000
147,637
140,000
124,792
120,000
101,192
100,000
87,296
80,000 75,945
60,000
40,000
20,000
0
FY 2005 FY 2006 FY 2007 FY 2008 FY 2009
FY 2005 FY 2006 FY 2007 FY 2008 FY 2009
REVENuE S$’000 S$’000 S$’000 S$’000 S$’000
Full Year 101,192 147,637 124,792 75,945 87,296
Net Change 44.9% 45.9% (15.5%) (39.1%) 14.9%
harmony in motion Pteris Global Limited 49
annual report 2009
operationandfinancialreview
In 2007, the Group extended its geographical reach and ventured into the North America market successfully.
The Group’s efforts in marketing and R&D work resulted in its high-level software and equipment being
approved as USA-compliant. Since then, the Group has secured three major projects in the region. In 2009,
North America emerged as the top contributor of revenue, surpassing its traditional markets.
40% REVENuE
FROM AMERICAS
revenue contribution from major regions
44%
40%
35%
25% 25%
14% 19%
7%
1%
americas middle east greater china
FY 2007 FY 2008 FY 2009
revenue contribution from other regions
29%
19%
10% 10%
5% 5% 6% 5%
1%
south asia southeast asia others
FY 2007 FY 2008 FY 2009
50 Pteris Global Limited harmony in motion
annual report 2009
operationandfinancialreview
Material, Subcontract and Other Direct Cost (“MSO”)
In line with the higher revenue for the year, MSO has increased to S$58.0 million as compared with S$46.6
million in FY 2008. MSO as a % of revenue for the year has increased to 66.5% as compared with 61.4%
in 2008. This increase was due mainly to lower margin projects being executed in FY 2009. Margins for
the projects executed in FY 2009 were lower as a result of the increased competition and higher local
subcontractor costs.
(S$’000) HIGHER
160,000
REVENuE
140,000
BuT LOWER
120,000
MARGIN IN
100,000
2009
80,000
60,000
40,000
20,000
0
FY 2005 FY 2006 FY 2007 FY 2008 FY 2009
Revenue MSO
FY 2005 FY 2006 FY 2007 FY 2008 FY 2009
S$’000 S$’000 S$’000 S$’000 S$’000
Revenue 101,192 147,637 124,792 75,945 87,296
MSO 53,585 85,548 80,167 46,608 58,048
MSO % of Revenue 53.0% 57.9% 64.2% 61.4% 66.5%
harmony in motion Pteris Global Limited 51
annual report 2009
operationandfinancialreview
Staff Costs
Staff costs decreased by 8.3% from S$20.6 million in FY 2008 to S$18.9 million in FY 2009. This was due to
the Group’s strategy to increase local staff in which the Group operates as well as the benefit derived from
Singapore Government Job Credit Scheme.
ReCRuitment
mAde in
800 30.0%
diveRSiFied
700
25.0%
600
500
20.0% LoCAtionS
400 15.0%
300
10.0%
200
5.0%
100
0 0.0%
FY 2005 FY 2006 FY 2007 FY 2008 FY 2009
Average Global Staff Strength Staff Costs as % of Revenue
FY 2005 FY 2006 FY 2007 FY 2008 FY 2009
S$’000 S$’000 S$’000 S$’000 S$’000
Revenue 101,192 147,637 124,792 75,945 87,296
Staff Costs 21,165 29,335 26,147 20,644 18,896
Staff Costs as % of Revenue 20.9% 19.9% 21.0% 27.2% 21.6%
Average Global Staff Strength 569 719 731 698 721
52 Pteris Global Limited harmony in motion
annual report 2009
operationandfinancialreview
Depreciation
Depreciation and amortisation was 46.5% higher for the FY 2009. This was mainly due to the depreciation
on the new headquarters which commenced in May 2009. No depreciation was provided for the former
headquarters building in 2008 at 20 Benoi Crescent, Singapore, as it was sold in FY 2008.
FY 2005 FY 2006 FY 2007 FY 2008 FY 2009
S$’000 S$’000 S$’000 S$’000 S$’000
Property, plant & equipment 21,746 23,102 25,183* 27,120 40,128
Depreciation 1,301 1,477 1,502 1,300 1,904
Depreciation % 6.0% 6.4% 6.0% 4.8% 4.7%
* Including assets held for sale of S$8,766,000.
Foreign Exchange Gain and Hedging Cost
The majority of the projects that the Group has secured are denominated in USD or USD pegged currencies.
As at 31 December 2009, the Group has forward currency contracts with a total notional amount of
approximately S$60.7 million (FY 2008: S$87.0 million).
As a practice, the Group hedges 50% - 75% of its foreign currency exposures. The Group does not use
complex financial derivatives to hedge its foreign currency exposures. All foreign currencies exposures
were hedged using simple forward contracts.
FY 2007 FY 2008 FY 2009
S$’000 S$’000 S$’000
LOWER
Outstanding Forward Contracts 60,196 87,000 60,731
HEDGING COST
Foreign Exchange Difference (3,076) 20 779
AND FOREIGN
Hedging Cost - (1,972) (377)
ExCHANGE GAIN
Total (3,076) (1,952) 402
Due to the increase in volatility in foreign exchange rates and interest rate markets, the Group started
tracking exchange rates and hedging cost paid/premium received separately.
As a result of the sharp decline in USD interest rates, the hedging cost to hedge USD has also dropped
significantly. Consequently, hedging cost declined from S$2.0 million in FY 2008 to S$0.4 million in FY 2009.
The Group also recorded a foreign exchange gain of S$0.8 million in FY 2009.
harmony in motion Pteris Global Limited 53
annual report 2009
operationandfinancialreview
Lower
50
Cost of hedging USD in SGD
0
(50)
(100)
(150)
(200)
(250)
Higher FY 2006 FY 2007 FY 2008 FY 2009 FY 2010
3 month Swap (Cost)/Premium 6 month Swap (Cost)/Premium
Net Profit After Tax
The Group posted a S$0.7 million net profit after tax for FY 2009. This net profit after tax of S$0.7 million
took into account:
a) an impairment charge of S$1.5 million of the Group’s investments in its UK subsidiary, CDG Systems
Limited (CDG) and its operational loss of S$1.4 million. The Group has taken steps to substantially scale
down the operations of CDG as its performance has been greatly affected by the poor economy in
Europe.
b) a tax write-back of S$2.4 million due to finalisation of some of the Group’s prior years’ tax assessments.
FY 2005 FY 2006 FY 2007 FY 2008 FY 2009
GroUP S$’000 S$’000 S$’000 S$’000 S$’000
Profit/(Loss) Before Income Tax 19,840 28,924 19,257 (2,568) (1,302)
Income Tax Expenses (2,925) (3,224) (4,527) (484) 2,005
Profit/(Loss) After Tax 16,915 25,700 14,730 (3,052) 703
Net Profit Margin 16.7% 17.4% 11.8% (4.0%) 0.8%
54 Pteris Global Limited harmony in motion
annual report 2009
operationandfinancialreview
FINANCIAL RESOuRCES
Cash Flow, Bank Borrowings and Net Gearing
The Group’s cash and cash equivalents increased from S$17.8 million to S$23.9 million. This increase was
largely due to the successful rights issue undertaken by the Company in November 2009. As a result of this,
the Group’s net borrowing stood at S$0.4 million as at 31 December 2009 (31 December 2008: S$6.1 million)
or a net gearing ratio of 0.4% (31 December 2008: 9.1%).
During the year, the Group incurred a net operating cash outflow of S$1.3 million. The Group has also made
payments towards the construction of the new headquarters at 28 Quality Road, amounting to S$9.0 million.
S$24 MILLION CASH ON
HAND WITH LOWER
NET GEARING RATIO
FY 2005 FY 2006 FY 2007 FY 2008 FY 2009
GROuP S$’000 S$’000 S$’000 S$’000 S$’000
Total Equity 63,344 68,544 70.913 67,069 88,847
Total Borrowings 4,221 23,076 12,337 23,896 24,204
Gearing 6.7% 33.7% 17.4% 35.6% 27.2%
Cash and Cash Equivalents 20,143 16,173 5,817 17,781 23,855
Net Borrowings (15,922) 6,903 6,520 6,115 349
Net Gearing - 10.1% 9.2% 9.1% 0.4%
net gearing
12.0%
10.1%
10.0% 9.2% 9.1%
8.0%
6.0%
4.0%
2.0% 0.4%
0.0%
0.0%
FY 2005 FY 2006 FY 2007 FY 2008 FY 2009
harmony in motion Pteris Global Limited 55
annual report 2009
operationandfinancialreview
Net Assets and Net Current Assets
Net asset for the Group increased from S$67.1 million in FY 2008 to S$88.8 million in FY 2009.
In late 2009, the Company successfully completed a 2 for 5 renounceable rights issue at the issue price
of S$0.13 per rights share. Through this rights issue, the Group raised S$17.0 million of additional capital,
bringing the Company’s share capital from S$37.4 million to S$54.4 million.
In addition to this, the Group has revalued its land and buildings in Singapore and Malaysia at the end of 2009.
Based on the revaluation report prepared by professional valuers, the open market value of the freehold and
leasehold land and buildings held by the Group was higher than the Group’s carrying value by S$5.9 million,
thus increasing the net assets of the Group by the same amount.
Over the years, the Group has maintained high current assets through its effective management on gearing
ratio and liquidity requirement.
S$57
MILLION OF
NET CuRRENT
ASSETS
S$89 MILLION NET ASSETS
AND SHAREHOLDERS’
EquITY
FY 2005 FY 2006 FY 2007 FY 2008 FY 2009
GROuP S$’000 S$’000 S$’000 S$’000 S$’000
Net assets 63,344 68,544 70,913 67,069 88,847
Net current assets 42,459 39,268 55,409 49,274 57,434
56 Pteris Global Limited harmony in motion
annual report 2009
operationandfinancialreview
Value-Added Statement
FY 2005 FY 2006 FY 2007 FY 2008 FY 2009
GROuP S$’000 S$’000 S$’000 S$’000 S$’000
Revenue 101,192 147,637 124,792 75,945 87,296
Purchases of goods & services (58,840) (91,855) (90,327) (58,667) (67,474)
Value-added operations 42,352 55,782 34,465 17,278 19,822
Investment income 250 5,479 13,358 2,783 614
42,602 61,261 47,823 20,061 20,436
Applied as follows:
To employees:
Salaries and other staff costs 21,165 29,335 26,147 20,644 18,896
To government:
Income and other taxes 3,251 3,774 4,801 597 (1,884)
To providers of capital:
Finance expense 129 707 643 572 817
Dividends (net) 11,110 17,318 11,647 - -
Retained for re-investment and
future growth:
Depreciation and amortisation 1,301 1,746 1,502 1,300 1,904
Accumulated profits 5,646 8,381 3,083 (3,052) 703
42,602 61,261 47,823 20,061 20,436
Average number of employees 569 719 731 698 721
Productivity data
Value-added per employee ($) 74,432 77,583 47,148 24,754 27,492
Value-added per employment cost ($) 2.00 1.90 1.32 0.84 1.05
Value-added per investment
in fixed assets ($) 1.95 2.41 2.10 0.64 0.49
harmony in motion Pteris Global Limited 57
annual report 2009
operationandfinancialreview
Five-Year Financial Profile
FY 2005 FY 2006 FY 2007 FY 2008 FY 2009
GROuP S$’000 S$’000 S$’000 S$’000 S$’000
Income Statement
Revenue 101,192 147,637 124,792 75,945 87,296
Profit/(Loss) After Tax 16,915 25,700 14,730 (3,052) 703
Total Dividends 11,152 17,325 11,647 - -
Balance Sheet
Non-Current Assets 25,018 38,968 19,820 29,149 40,512
Current Assets 81,816 88,459 95,346 91,871 96,269
Total Assets 106,834 127,427 115,166 121,020 136,781
Total Equity 63,344 68,544 70,913 67,069 88,847
Non-Current Liabilities 4,133 9,692 4,316 11,354 9,099
Current Liabilities 39,357 49,191 39,937 42,597 38,835
Total Equity and Liabilities 106,834 127,427 115,166 121,020 136,781
Per Share Data (Cents)
Earnings/(Loss) After Tax* 10.4 7.8 4.4 (0.9) 0.2
Dividends (Net) 7.5 5.3 3.5 - -
Net Assets 13.8 20.8 21.3 20.2 19.1
Financial Ratios
Return on Total Equity (%) 26.7 37.5 20.8 (4.6) 0.8
Return on Total Assets Employed (%) 15.8 20.2 12.8 (2.5) 0.5
Debt-Equity Ratio (%) 6.7 33.7 17.4 35.6 27.2
Net Debt-Equity Ratio (%) - 10.1 9.2 9.1 0.4
* Earnings/(Loss) after tax per share data are computed as follows:
FY 2005 - Based on weighted average number of shares in the issue of 163,238,927
FY 2006 - Based on weighted average number of shares in the issue of 328,943,446
FY 2007 - Based on weighted average number of shares in the issue of 332,110,138
FY 2008 - Based on weighted average number of shares in the issue of 332,807,796
FY 2009 - Based on weighted average number of shares in the issue of 385,193,094
58 Pteris Global Limited harmony in motion
annual report 2009
marketoverview
Resiliency
Amidst
Recession
ASIA PACIFIC up from 62.1% a year ago. Cathy Pacific, Hong Kong’s
2009 was a turbulent year for the Asian Pacific biggest airline carrier, posted a second half profilt of
economy. Despite the gloomy outlook, the prospect HK$3.9 billion to a loss of HK$7.9 billion a year earlier,
for the industry remains bright. based on annual results announced in March 2010.
The economy in the Asia Pacific region is showing In spite of the recession, countries around the
signs of recovery with an increase of 5.1% in air Asia Pacific region are proceeding with plans for
passenger traffic in late 2009 year-on-year. The Asian the construction of new airports, expansion and
economies, having undergone a similar but less upgrading of airport facilities. Australia plans to build
severe economic crisis in 1997, were well-prepared new terminals at five of their international airports
to deal with the crisis when the financial tsunami from 2009 to 2015. Vietnam has ambitious plans
hit the region at end of 2008. The region was also to become the air traffic hub of Southeast Asia and
relatively unaffected by the excessive levels of debts is looking to develop at least three new airports,
that continue to weigh heavily on both business and and expanding its existing seven airport terminals
consumer sentiments in North America and Europe. between 2010 and 2020.
International Air Transport Association (IATA), in a In Northeast Asia, Japan and South Korea are expected
publication in Aviation Week in September 2009, to spend approximately US$9 billion in the expansion
indicated that signs of rebound are more evident of the capacity handling of three major airports in that
in Asia Pacific as it expects the region to show the region. In a published report by the market research
most dramatic improvement in 2010. Some of the specialist Frost & Sullivan Asia Pacific Research, the
Asian carriers which have reported losses in the early new terminal and runway construction projects in
quarters of 2009 are seeing a rise in the number of Asia Pacific are likely to exceed US$49 billion from
travelling passengers. Singapore Airlines, the world’s 2009 to 2025.
second most valuable carrier by market value,
reported that it filled 71.4% of the passenger and Rising trend in low-cost carrier also helps to boost the
cargo space available on its places in February 2010, tourism industry and airports like Singapore’s Changi
harmony in motion Pteris Global Limited 59
annual report 2009
marketoverview
Airport and Malaysia’s Kuala Lumpur International China’s aviation industry has reportedly earned
Airport are continuing to expand and upgrade their 9.1 billion yuan in the first nine months of 2009. Its
designated terminals for low-cost carriers’ traffic. domestic air passenger traffic also grew by 22.3%
in the same period. The industry is also experiencing
A clear sky for the aviation industry seems imminent an overall recovery with vast improvements in its
within the Asia Pacific region with IATA forecasting passenger traffic volume. In the first half of 2009,
the region to show the most dramatic improvement passenger traffic volume showed a rapid growth with
in 2011, driven by signs of recovery in regional an average month-on-month growth rate of more than
economies. 13%. Domestic volume performed the best with the
year-on-year passenger traffic volume growth rate
standing at 20.4% in the first half of 2009.
CHINA
China’s economy remained relatively resilient against It was reported that China’s three largest airline groups
the economic crisis in 2009; with many of its business saw a significant year-on-year growth in their passenger
sectors performing beyond expectations, including traffic in August of 2009. Air China’s domestic passenger
the aviation industry. In an effort to boost its economy, traffic soared to 42%, while Eastern Airlines and China
the Chinese government in mid-2009 announced a Southern Airline’s domestic passenger traffic surged
US$586 billion stimulus package of which 45% will to 52% and 34% respectively.
support infrastructure projects, including the building
of new airports across the country. The government Being one of the most populated nations, the Chinese
has also implemented measures such as cutbacks on citizens make up a significant portion of the world’s
jet fuel prices, reduction of airport fees and subsidising consumer market. The annual disposable incomes of
certain domestic and international routes in order to the Chinese consumers are forecasted to increase to
raise the demands of the domestic market to cater 65.4 billion yuan (US$9.57 billion) by 2020, compared to
to the rapid growth of domestic and international 15 billion yuan (US$2.19 billion) in 2008. With its citizens
passenger traffic volume. becoming more affluent and the middle-class population
on the rise, demands of air travel look set to increase
60 Pteris Global Limited harmony in motion
annual report 2009
marketoverview
in the coming years. However, according to the Civil INDIA
Aviation Administration of China (CAAC), saturation is The Indian aviation industry is one of the fastest
appearing at various main hubs in Shanghai, Guangzhou growing aviation industries in the world with private
and Beijing due to the lack of airports to meet with airlines accounting for more than 75 per cent of the
the growing demands. Therefore, to make air travel sector. With a Compare Annual Growth Rate (CAGR)
accessible to more people, CAAC has plans to construct at 18 per cent and 454 airports and airstrips in place
97 new airports by 2020 which further indicates a rosy in India, of which 16 are designated as international
outlook for China’s aviation industry. airports, Union Civil Aviation Minister Praful Patel
has stated that aviation sector will witness revival by
With the continuous boom in the aviation industry 2011. The last quarter of 2009 has also raised some
and escalating air travel demands in China, Pteris hopes of revival in the country.
Global is well-placed to ride on the wave of growth
opportunities. As one of our key markets traditionally, India is slowing shifting its airport operation model from
we have a proven track record in China. Through our being government-run to public-private partnerships.
two subsidiaries, Pteris Global (Beijing) Ltd as well as By allowing private companies to own a stake in the
our manufacturing facility Pteris Global (Suzhou) Ltd, airport through private partnerships model, airports
we will continue to strengthen our foothold as the will be managed by commercialised organisations
preferred airport logistics systems provider in China. which will be more focused on the development and
meeting of international standards. In order to keep
up with the intense competition from other airports,
development of airport infrastructure will be the core
focus for the India government, airport authorities
and the stakeholders. The Indian government plans
to spend US$9 billion in the development of airport
infrastructure between 2008 and 2012. These funds
harmony in motion Pteris Global Limited 61
annual report 2009
marketoverview
will be spent on increasing passenger and flight MIDDLE EAST
capacity at existing airports, upgrading metro and non- According to a report published by the market research
metro airports as well as developing new greenfield specialist Frost & Sullivan (“Middle East Airports
airports. Infrastructure Market Assessment”), the Middle
East airports infrastructure market has been able to
According to MM Nambiar, Civil Aviation Secretary, offset the impact of the global economic slowdown
in addition to creating state-of-the-art airports in Delhi and progress with expansion plans as a result of the
and Mumbai, the Airports Authority of India (AAI) is strong growth of the Middle East commercial aviation
also spending US$427.5 million on developing the industry.
airports in Kolkata and another US$384.7 million on
Chennai airport. The AAI is also looking at upgrading The air traffic for Middle East soared in 2009 with
and modernising 35 non-metro airports. Both Chennai Middle Eastern carriers reporting an 11.2% increase
and Calcutta airports will be completed by next year. in revenue (on a 13.6% capacity increase). The region
Investment opportunities of US$110 billion are also generated the fastest growth in passenger
being envisaged up to 2020 with US$80 billion in traffic at the end of the year with a 19.1% increase in
new aircraft and US$30 billion in development of December 2009.
airport infrastructure, according to the Investment
Commission of India. The Middle East’s air services, comprising ground
handling and maintenance, expect a robust growth
With the successful completion of more than 18 due to the backlogs in orders. The region’s projection
airport logistics systems projects in India, Pteris of 1,206 aircrafts and 708 business jets will likely
Global has gained a strong foothold in the market and contribute to a 10% growth in the air traffic.
we will continue to build on our strong track record in
one of our key target markets in Asia.
62 Pteris Global Limited harmony in motion
annual report 2009
marketoverview
A key market driver is the proactive government AMERICAS
policies to privatise infrastructural development and The United States’ credit crunch and sub-prime crisis
airport operation, which will inevitably drive the sparked off one of the decade’s worst economic crisis
Middle East airports infrastructure market growth. in North America. Although the aviation prospect
The various governments in the region are keen on looked bleak in early 2009, US airlines reported
adopting the build, operate and transfer (BOT) model positive growth in passenger traffic at the end of the
to ensure the international standard of their airports. 2009. The growth in passenger traffic is largely due to
the relative strong performance of low cost carriers
The Middle East is also a linking hub between the in the North America region, which helped to curtail
west and east. A stopover at a Middle East hub that the decline and improve the total traffic capacity. US
serves as a link, results in lower operating costs, airline carriers in North America reduced operational
owing to the cheaper oil prices. This stopover by the expenses so as to deliver profitable performance in
existing airlines coupled with the order backlogs will 2009. Despite the worsening economic conditions,
increase the aircraft movement in the Middle East it remained relatively unchanged from the earlier
airports and correspondingly, drives the need for forecasted profit figure of US$300 million. US airline
airport infrastructure expansion. carriers are also benefiting from careful capacity
management and lower spot prices for fuel.
There is also a greater need for increased capacity
as a result of expanding routes by airlines and is The International Civil Aviation Organisation (ICAO)
expected to drive the need for airport infrastructural forecasted a moderate recovery of 3.3 per cent
development in the short and medium terms. growth for the airline industry next year, in line with
improving economic conditions around the world. It
forecasts that the momentum to build to return to the
traditional 5.5 per cent yearly growth rate in airline
passenger traffic by 2011. Coupled with upcoming
world events such as Winter Olympic 2010 in Canada,
harmony in motion Pteris Global Limited 63
annual report 2009
marketoverview
the region is expected to experience a tourism boom Airport Technology.com reports that improving
and higher travelling air traffic to North America. transport links remains a particular priority for the
Brazilian government and the country’s airport sector
North America continues to be the single largest is likely to receive serious attention. Brazil has more
airport baggage handling market in the world and it than 2,000 officially registered airports, of which 66
remains one of the key markets for Pteris Global. account for over 95% of all passenger traffic.
Our existing baggage handling system project at
Phoenix Sky Harbor International Airport Terminal 4 is In recent years, the Brazilian airport operator, Emprese
scheduled for completion by end 2010. This landmark Brasileira de Infra-Estrutura Aeroportuaria, more
project will put us in good stead as we continue to simply known as Infraero, has invested heavily in
build our track record in the US and remain committed airport expansions and modernisation programmes.
towards securing more projects in the future. A further £1.4bn is estimated to be invested in the
nation’s airports during the next five years to offer
South America is growing rapidly in the aviation appropriate levels of service for passengers during
industry and the industry remains unshaken by the the FIFA World Cup in 2014 and Olympics in 2016.
threat of economic crisis. According to the Latin
America and Caribbean Air Transport Association Pteris Global ventured into South America market
(ALTA), the passenger traffic in October 2009 has with the successful completion of its maiden project,
risen by 0.7% as compared on a year-on year period. Tocumen International Airport (Panama) in 2005.
Domestic traffic within the region is also going strong It was a significant milestone for the Group as we
with consecutive three months’ growth between are the first Asian company to have delivered a
May to August 2009 period, an increase of 16% on a successful airport baggage handling system in South
year-to year basis. America. We continued to build on this initial success
and in 2008, we secured our second airport baggage
handling system project in South America for New
Quito International Airport (Ecuador).
64 Pteris Global Limited harmony in motion
annual report 2009
learninganddevelopmentprogram
Pteris Global Learning and Development Program was
rolled out in February 2009. This is a full-scale internal
training program designed to develop our staff’s generic
knowledge on our core engineering systems such as
baggage handling, in-flight catering, air cargo handling
and express courier handling. In addition, the program
also aims to equip as well as upgrade the core skill sets,
both hard and soft, of our new and experienced staff.
The initiative for the Learning and Development
Program kick-started in mid of 2008 and the entire The Program also serves as a platform where cross-
senior management team, together with all the senior functional training is conducted, so as to facilitate inter-
managers and specialists from the respective functions, department knowledge transfer as well as information
were involved in molding the structure of the program. sharing. All participants, especially senior and experienced
A total of 80 training modules were conceptualised; staff, are strongly encouraged to learn as well as contribute
ranging from system overview and design layout to by sharing past experiences, industry best practices and
component selection and installation methodology. project management pitfalls to avoid.
More than 20 internal trainers, comprising senior
managers and function specialists, were identified and The Learning and Development staff program is in
selected to deliver the respective training modules. The line with one of the company’s core values - We value
training is held twice weekly, with a training calendar every member of our team and encourage their
drawn up for the rest of 2009. A comprehensive development. The company remains committed to staff
training feedback cycle is also put in place to facilitate learning and development, and continues to strive towards
continuous improvement to the program. harnessing an active learning culture among our staff.
harmony in motion Pteris Global Limited 65
annual report 2009
companyactivities
New Premises. New Chapter
On 25 April 2009, we drew the curtains on our
former location at 20 Benoi Crescent. We have
outgrown the old facilities and needed a new place
to facilitate our new capabilities and aspirations. We
commenced operations and business at our brand
new and exciting corporate office on 27 April 2009.
The relocation process took more than 2 weeks to
complete, and there was a lot of team work and
coordination involved.
Pteris Global Bowling Day 2009
The Pteris Global Bowling Day was held at Orchid a great opportunity for bonding outside the office
Bowl @ E-hub, Pasir Ris Downtown East on 21 environment.
November 2009. All participating staff, including
our Directors, enjoyed a fun-filled and exciting A total of 42 prizes were given out during the two
afternoon. A sumptuous lunch was served prior to rounds of bowling competition.
the bowling competition, and staff felt that this is
66 Pteris Global Limited harmony in motion
annual report 2009
corporateevents2009
MONTH YEAR EVENTS
JANuARY 2009 • Extraordinary General Meeting - to obtain approval for change of name
• Inter-Roller is now Pteris Global
• Pteris Global Corporate Brand Launch - Internal
FEBRuARY 2009 • Announcement of FY 2008 Full Year Results
MARCH 2009 • Garnered Prestigious Certificate of Approval in USA
APRIL 2009 • Annual General Meeting and Board Committee Changes
• Relocation to new headquarters at 28 Quality Road
• Change in the Registered Office of Pteris Global Limited
MAY 2009 • Announcement of FY 2009 First Quarter Results
• Participated in The Airport Show 2009 in Dubai, United Arab Emirates
JuNE 2009 • Participated in the 81st Annual AAAE Conference and Exposition in Philadelphia,
Pennsylvania
AuGuST 2009 • Announcement of FY 2009 Half Year Results
NOVEMBER 2009 • Announcement of FY 2009 Third Quarter Results
• Rights Issue to Raise Gross Proceeds up to S$17.5 Million
• Pteris Global Bowling Day at Pasir Ris Downtown East
DECEMBER 2009 • Completion of Rights Issue with Over-subscription of 60.4%
JANuARY 2010 • Management Retreat at Pulai Springs Resort, Malaysia
FEBRuARY 2010 • Announcement of FY 2009 Full Year Results
• Analysts’ briefing for FY 2009 Full Year Results
MARCH 2010 • Appointment of Audit Committee Chairman, and Nomination and Remuneration
Committee Chairman
harmony in motion Pteris Global Limited 67
annual report 2009
riskmanagement
“
OuR BuSINESS DYNAMICS
The Group’s main sources of income are from overseas.
Projects are executed in many countries and jurisdictions at any one point in time.
A significant portion of the Group’s revenue and expenditure is foreign currencies.
”
Most projects take more than one year to complete.
Risk management is an integral part of the management of the Group’s business. Risk management
involves identifying the risks, setting policies and mitigation plans. They are reviewed regularly to take
into account the changing market conditions and the activities of the Group. The Group manages risks
using an overall strategy determined by the Board and supported by the Audit Committee. Written
polices and guidelines approved by the Board set the risk management standards and risk tolerance
level for the Group.
Three Broad Categories of Risk Factors
Business Risks
Management
• Securing new orders
• Competition and entry barriers
• Political environment and
regulatory requirements
Operational Risks Financial Risks
Management Management
• Contractual and legal • Liquidity
obligations • Foreign currency exchange
• Human resource • Credit
• Cost control • Interest rate
68 Pteris Global Limited harmony in motion
annual report 2009
riskmanagement
Business Risks Management
Risk Risk Mitigation Plans
Securing new orders
As a project-based engineering company, the In an effort to minimise the risks of over-reliance
Group’s revenue is dependent on the number and on any single geographical region, the Group
size of projects secured. The number of projects has been actively expanding its geographical
that the Group may secure is contingent on its distribution over the years. Other than Southeast
ability to secure projects as well as the availability Asia, the Group has established its foothold in
of airport development projects, which include the Greater China, South Asia, the Middle East and
upgrading, expansion or building of new airports. North America. Backed by a strong track record
and 30 years of engineering knowledge, the Group
will continue to explore new markets.
Other than baggage handling system, the Group
has also diversified into other areas of airport
logistics systems so as to enable us to tap onto
other growth areas within the airport logistics
industry. Acquiring and mastering technical
expertise in air cargo handling systems, express
courier handling systems and in-flight catering
systems have enabled the Group to participate in
more airport logistics system projects in various
parts of the world.
Competition and entry barriers
The Group operates in a niche industry, which The Group does not rest on its laurels and continues
appears to have a relatively high level of barrier to build on its track record and engineering know-
of entry. However, due to the rapid changing how. Knowledge is institutionalised so that it
environment, these barriers of entry may be does not rest on a small group of individuals. New
lowered. If this happens, it will likely result in products and product enhancements are not just the
more intense competition from both existing and sole responsibilities of Research and Development
new industry players. department but a way of life for the Group.
Political environment and regulatory
requirements
The Group executes projects in many countries and While these external risks are beyond the control
jurisdictions at any one point in time. As such, the of the Group, the Group constantly keeps abreast
Group is exposed to various political environment with the political and regulatory requirements
risks and complex regulatory requirements. where the Group operates in.
Changes in governments, regulatory rulings and
requirements, and political riots could present a Regular dialogues are made with the foreign countries’
threat to the execution of projects undertaken. professional advisers and also with Singapore
government agencies such as IE Singapore.
harmony in motion Pteris Global Limited 69
annual report 2009
riskmanagement
Operational Risks Management
Risk Risk Mitigation Plans
Contractual and legal obligations
Contract agreements stipulate our legal obligations To ensure that the Group is able to comply with
to fulfill project requirements such as the systems tender requirements, customers’ specification,
delivery, time frame and other contractual conditions. and contractual terms and conditions, the Group
The Group could be liable for liquidated damages has set up a team of trained personnel to review
in the event of failure to fulfill its contractual and analyse contracts in detail prior to entering
obligations. into any contract. In order to protect the Group’s
interests and to understand the risk exposures,
In addition, if a customer prematurely terminates a external professionals such as lawyers and tax
contract, it is possible that the Group may not be advisors are also engaged to advise the Group on
adequately compensated. Premature termination legal and tax matters whenever required.
may also expose us to claims from our sub-
contractors and/or suppliers in the event that we For material tenders (exceeding a prescribed
terminate their services for the related projects. contract value), a thorough risk analysis is also
Such incidents may adversely affect our business, performed and presented to the Board for approval
financial performance and financial condition. before submission of tender.
To mitigate the financial loss arising from such
risks, the Group has maintained a balanced
insurance coverage. Where possible, insurance
policies are taken up to protect the Group against
any contractual risks that are insurable.
Human resource
In order to develop, support and market the In this respect, the Group places great emphasis
products and services offered by the Group, it is in establishing comprehensive human resource
necessary to hire and retain employees with suitable policies for its recruitment, compensation and
experience. The implementation of the Group’s development of staff. This ensures that the
strategic business could be hindered by failure to Group’s human assets are nurtured and retained;
recruit or retain key personnel, the unexpected loss so that the ability to maintain a skilled workforce
of key senior employees or failure of the Group’s and the Group’s competitive edge is preserved.
succession planning.
The Group also develops a set of in-house training
modules in order to equip the staff with the
essential knowledge and skills needed to excel in
their individual posts.
Staff are recruited from various geographical
regions so as to attract new talents and maintain
a constant talent pool.
70 Pteris Global Limited harmony in motion
annual report 2009
riskmanagement
Operational Risks Management (cont’d)
Risk Risk Mitigation Plans
Cost control
The prices of our contracts are fixed and agreed To manage this risk, the Group has put in place
upon at the point of signing the contracts. As various measures, including but not limited to
project costs are estimated during the tender the following:
period, there is no assurance that actual costs
incurred will not exceed the estimated costs. 1.A system to closely monitor, track and compare
This could be due to under-estimation of costs, the actual and estimated costs as the project
wastages, inefficiencies and cost from reworks progresses.
incurred during the implementation of the
contract. Any such cost over-runs may adversely 2.Ensure good supply chain management so as
affect the Group’s profitability. to take advantage of cost savings through bulk
purchases with favourable credit terms from our
In addition, costs are also subject to global inflation, suppliers.
especially for projects which are implemented
for periods of more than 12 months. 3.Some costs of raw materials and components
are negotiated and firmed up before the start of
the project so as to minimise cost fluctuation.
4. Ensure good quality of our manufactured
systems as well as components purchased. A
team of qualified Quality Assurance personnel
has been specially set up to ensure compliance
with quality standards. Good quality will reduce
the cost of reworks.
While it is not possible to preempt all forms of cost
increase, the Group will as far as possible consider
such possibilities and yet remain competitive.
harmony in motion Pteris Global Limited 71
annual report 2009
riskmanagement
Financial Risks Management
Risk Risk Mitigation Plans
Liquidity
Similar to most other companies in this industry, To manage liquidity risk, the Group monitors its
receivables are based on projects’ milestones. In net operating cash flows closely, maintains an
some projects, the initial down payments may be adequate level of cash and cash equivalents and
furnished by customers. Subsequent payments unutilised credit facilities.
will be based on progressive claims for work
Apart from broadening the Group’s core group
done or when prescribed milestones are met. In of bankers, the Group also makes conscientious
the meantime, payments are made on a monthly efforts to ensure that its bankers understand the
basis for operating activities such as purchases nature of the Group’s businesses and keep them
of materials and components for fabrication. This abreast of the Group’s activities.
creates timing mismatch in terms of cash inflow
and outflow. Consequently, the Group may require The Group also manages its capital prudently. In
high working capital needs. 2009, the Group was of the opinion that the global
financial market was still fragile even though
there were signs of recovery. A rights issue to
raise additional capital was undertaken to further
strengthen the Group’s financial position.
Foreign currency exchange
The Group is exposed to movements in the As a practice, the Group hedges 50%-75% of
exchange rates of foreign currencies as most of its foreign currency exposures, and receipts
the projects are normally denominated in foreign and payments are matched against their source
currencies. The majority of projects that the Group currencies to minimise exchange differences. In
order to minimise unknown risks, the Group does
has currently secured are dominated in USD or
not use complex financial derivatives to hedge its
USD-pegged currencies. foreign currency exposures. All foreign currency
exposures were hedged using simple forward
contracts. The Group does not speculate on
derivative contracts.
As part of risk management practice, the Group
ensures clear segregation of duties. All foreign
exchange trades are triggered, confirmed and
signed off by three different personnel.
In addition to this, our non-executive Directors will
meet with the Group’s bankers. This provides an
avenue for open dialogue sessions between the
non-executive Directors and the Group’s bankers.
By having direct access to the Group’s bankers,
the non-executive Directors can also receive direct
feedback from our bankers and are constantly
keep informed on the type of transactions that the
Group has entered into.
72 Pteris Global Limited harmony in motion
annual report 2009
riskmanagement
Financial Risks Management
Risk Risk Mitigation Plans
Credit
Whilst the Group’s clientele base is mostly airport The Group closely monitors all outstanding debts
authorities, airlines or reputable business partners, and reviews the collectability of receivables
we are still exposed to credit risk. periodically to make specific allowances in the
event that it considers any collection doubtful.
Whenever possible, security such as Letter of
Credit is sought from clients.
Interest rate
The Group’s exposure to interest rate risk arises As the Group does not have significant borrowings
primarily from short-term loans, which are drawn that are subject to interest rate fluctuations,
down as and when the need arises. The Group the Group does not hedge its interest rate risk.
also has an unsecured term loan which is repriced However, continuous monitoring are undertaken
on a quarterly basis. Such loans attract interest to evaluate this risk at all time.
rates at the prevailing market rate whenever the
loans are drawn down or repriced. The Group has readily available interest rate swaps
facilities that can be used to hedge interest rate
risk, as and when the need arises.
harmony in motion Pteris Global Limited 73
annual report 2009
reportoncorporategovernance
Date of report: 26 March 2010
The Group believes in maintaining high standards of corporate governance, which are essential to protect the
interest of the Group, staff and shareholders. It is committed to ensure that effective corporate practices,
supported by a sound system of policies and internal controls, exist to support this belief.
This report details Pteris Global Limited’s main corporate governance practices with references to the principles
as set out in the Code of Corporate Governance 2005 (the “Code”).
As at the date of this report, the status, roles and responsibilities of each Director on the Board are set out in
the table below.
Nomination and
Name of Date of First Board Audit Remuneration
Directors Appointment Membership Committee Committee
Lim Yong Wah 15 Nov 1990 Non-Executive Chairman Chairman -
/ Independent Director
Low Kok Hua 11 Mar 1979 Non-Executive - Member
Director
Haider Mohamedally Sithawalla 01 Nov 1995 Independent Member Chairman
Director
Loh Chin Hua 11 Jan 2000 Independent Member Member
Director
Soon Kong Ann 20 Jul 2008 Independent Member -
Director
Tan Guong Ching 29 Jun 2007 Independent - Member
Director
Oon Chong Howe 01 Jan 2007 Executive - -
Director
John Sng Hee Kwee 26 Aug 2008 Executive - -
Director
(A) BOARD MATTERS
Board’s Conduct of Its Affairs
Principle 1: Every company should be headed by an effective Board to lead and control the company. The
Board is collectively responsible for the success of the Group. The Board works with Management to achieve
this and the Management remains accountable to the Board.
The key roles of the Board are:
• guide the corporate strategy and direction of the Group;
• ensure effective management and leadership of the highest quality and integrity;
• review and approve the Group’s major investments, divestments and funding proposals;
• review the Group’s financial performance, risk management and other corporate governance practices; and
• provide oversight in the proper conduct of the Group’s business.
74 Pteris Global Limited harmony in motion
annual report 2009
reportoncorporategovernance
Certain matters and transactions are reserved specifically for Board’s approval. Such matters include without
limitation to the following:
• tenders, capital expenditures and treasury transactions exceeding the prescribed limits;
• investments in subsidiaries, associate companies and non-quoted companies;
• long term financing including but not limited to borrowings from financial institutions and issuance
of bonds; and
• share issuances, dividends and other returns to shareholders.
The Group has in place financial authority and approval matrix for investments, divestments, loans and lines
of credit.
Directors are given appropriate briefing when they are first appointed to the Board. Orientation programs such
as site visits to the Group’s facilities are conducted to familiarise new Directors with the Group’s business and
corporate governance practices.
Newly appointed Board members who do not have previous experience as a Director in a listed company
in Singapore are given training by way of attending courses conducted by the Singapore Institute of
Directors (“SID”). In 2009, three of our Directors attended three different seminars organised by SID and
SGX-ST. All expenses related to such courses were paid by the Company.
Directors are also updated regularly on the Group’s major developments, financial reporting standards and
regulatory changes and are given appropriate training from time to time.
The Nomination and Remuneration Committee (“NRC”) and the Audit Committee (“AC”) continue to undertake
specific roles. The mattes which are delegated for the consideration of the respective Board Committees are
depicted in the diagram below. Matters which are delegated to Board Committees are reported to and monitored
by the Board. Minutes of meeting of the Board Committees are circulated to the Board for their review.
Board of Directors
Strategic matters, Corporate governance,
Guide, Control and Monitor Management
Nomination and
Audit Committee Remuneration Committee
Interested
Internal Nomination
Financial party Remuneration Employee
Control & Risk of directors &
Reporting transactions Matters share options
Management CEO
(if any)
harmony in motion Pteris Global Limited 75
annual report 2009
reportoncorporategovernance
The Board meets regularly to deliberate strategic policies of the Group, including significant acquisitions and
disposals, the annual forecast, business performance and approval for the release of quarterly, half-yearly and
year-end results announcements. Board members also meet informally on an ad-hoc basis from time to time.
Board members are also encouraged to participate in management retreats held with senior executives of the
Group. In 2009, three non-executive Directors have visited the Group’s subsidiaries in China to obtain a first-
hand knowledge of the progress made by the Group’s subsidiaries in China.
During the year, the Board met five times whereas, the AC and NRC met five times and twice respectively.
The attendance of every member at Board meetings and Board Committee meetings expressed as ratio of the
total number of meetings held during each member’s period of appointment is set out as follows:
Nomination and
Audit Committee Remuneration
Board Meeting Meeting Committee Meeting
Attendance Attendance Attendance
Name of Directors (M) (A) (M) (A) (M) (A)
Lim Yong Wah 5 5 4 4 - -
Low Kok Hua 5 5 - - 2 2
Haider Mohamedally Sithawalla 5 4 5 3 2 2
Loh Chin Hua 5 4 5 4 2 1
Dr. Soon Kong Ann 5 4 4 4 - -
Tan Guong Ching 5 4 - - 2 2
Oon Chong Howe 5 5 - - - -
John Sng Hee Kwee 5 5 - - - -
Rajan Menon (retired 24 April 2009) 1 1 1 1 - -
John Lim Hwee Chiang (retired 24 April 2009) 1 0 1 0 - -
Column (M) denotes the number of applicable meetings.
Column (A) denotes the number of meetings attended.
Board Composition and Guidance
Principle 2: There should be a strong and independent element on the Board, which is able to exercise
objective judgment on corporate affairs independently, in particular, from Management. No individual or small
group of individuals should be allowed to dominate the Board’s decision-making.
Throughout the year, the Board comprised of a mix of independent directors, non-executive directors and
executive directors. As at the date of this report, the Board comprises eight members, five of whom are
Independent Directors, one is Non-Executive Directors and two are Executive Directors. At all times during
the year, at least half the Board members were Independent Directors. As such, the composition of the Board
meets the requirement of having one-third of the Board as independent directors. The Board is of the view
that its size is appropriate, taking into account the scope and nature of the operations of the Group.
76 Pteris Global Limited harmony in motion
annual report 2009
reportoncorporategovernance
Board Composition
31 December 2009
2 Executive
Directors,
(25%) 4 Independent
Directors,
50%
2 Non Executive
Directors,
(25%)
The independence of each Director is reviewed annually by the Nomination and Remuneration Committee,
based on the definition of independence as stated in the Code.
Tests conducted to determine the independence of directors within the definition of the Code:
1. Has the Director been employed by Pteris Global Limited or any of its related corporation for the current
year (2010) or any of the past three financial years (2007 to 2009)?
2. Is the Director a spouse, parent, brother, sister, child, adopted child or step-child of an executive director or
senior executive of Pteris Global Limited or any of its related corporation whose remuneration is determined
by the NRC for the current year (2010) or any of the past three financial years (2007 to 2009)?
3. Is the Director, or an immediate family member of the Director, a substantial shareholder of or a partner
in (with substantial stake), or an executive officer of, or a director of any for-profit business organisation
to which the Company or any of its related companies made, or from which the aforesaid companies
received significant payments in the current year (2010) or immediate past financial year (2009)?
Payments aggregated over any financial year in excess of SGD200,000 shall be deemed to be significant;
A partner with 5% or more stake in a for-profit business organisation shall be deemed to be a partner with
substantial stake;
4. Did the Director or any of his immediate family member accept compensation from Pteris Global Limited
or any of its related corporations other than compensation for board service for the current year (2010) or
immediate past financial year (2009)?
5. Does the Director have any other relationship with Pteris Global Limited or any of its related corporations
which could interfere or be reasonably perceived to interfere with the exercise of independent business
judgment in carrying out the functions as a director or a member of the AC and/or NRC with a view to the
best interests of the Group?
harmony in motion Pteris Global Limited 77
annual report 2009
reportoncorporategovernance
The table below tabularized the results of the tests conducted above:
No Director’s Name 1 2 3 4 5 Results
1 Lim Yong Wah Independent
2 Low Kok Hua Independent
3 Haider M Sithawalla Independent
4 Loh Chin Hua Independent
5 Tan Guong Ching Independent
6 Dr Soon Kong Ann Independent
7 Oon Chong Howe Not independent
8 John Sng Hee Kwee Not independent
– Pass independence test – Fail independent test
Based on the above results, the Committee noted that all directors with the exception of Mr Oon Chong Howe
and Mr John Sng Hee Kwee, both of whom are executive directors, do not have any conflict of interest which
may render them not independent.
For the case of Mr Low Kok Hua, the NRC is of the opinion that he should not be regarded as independent
within the definition of independence in the Code even though he has passed all the independence tests.
This is because Mr Low Kok Hua may be reasonably perceived by the public to be not independent as he is a
substantial shareholder and one of the founders of the Group.
Chairman and Chief Executive Officer
Principle 3: There should be a clear division of responsibilities at the top of the Group – the working of the
Board and the executive responsibility of the company’s business – which will ensure a balance of power and
authority, such that no one individual represents a considerable concentration of power.
The Chairman, Mr Lim Yong Wah, and the Chief Executive Officer (the “CEO”), Mr Oon Chong Howe, are
two separate persons and are not related to each other. They each assume different roles and responsibilities.
None of the Directors and key Management staff is related to each other.
The Chairman, who is non-executive, leads the Board and is responsible for the management of the Board. He
acts independently in the best interests of the Group and its shareholders. The Chairman develops and instills
core corporate values into the Group. He also provides guidance and mentorship to the Management.
The CEO carries out the strategic plan agreed by the Board. He is also responsible for the day-to-day running
of the Group’s business. In addition to this, his role is also to develop an achievable and a sustainable business
model for the Group.
78 Pteris Global Limited harmony in motion
annual report 2009
reportoncorporategovernance
Chairman Lim Yong Wah
CEO
Oon Chong Howe
Formulate and execute
Lead the Board
the approved strategic plans
Develop and instil Develop an achievable and a
core corporate values sustainable business model
Guide and mentor Day to day running of
management the Group’s business
The Chairman ensures that Board meetings are held when necessary and sets the Board meeting agenda with
inputs from the CEO. He reviews the Board papers before they are presented to the Board. He also ensures
that sufficient information is disseminated in a timely manner to the members of the Board to enable them to
carry out their duties.
Board Membership
Principle 4: There should be a formal and transparent process for the appointment of new Directors to the Board.
The Nomination and Remuneration Committee (“NRC”) is responsible for identifying and selecting new
Directors with due consideration of the candidate’s background, experience and knowledge in technology,
business, finance and management skills, qualification, past and other directorships, shareholdings and
independence status. New Directors are appointed by way of a Board resolution, after the NRC makes the
necessary recommendation to the Board.
Our Articles of Association require one-third of our Directors to retire and subject themselves to re-election
by shareholders at every Annual General Meeting (“AGM”). This means no Director stays in office for more
than three years without being re-elected by shareholders. The retirement of Directors is determined on a
rotational basis.
In addition, a newly appointed Director will submit himself for retirement and re-election at the AGM
immediately following his appointment. Thereafter, he is subject to the one-third rotation rule. Directors due
for retirement and seeking re-election are required to submit themselves to the NRC for re-nomination.
harmony in motion Pteris Global Limited 79
annual report 2009
reportoncorporategovernance
26 March 2010
Table below tabularised the dates of re-election of the Directors (who are still in office as at the date of report)
during the last 3 years.
Name of Directors AGM 2007 AGM 2008 AGM 2009 AGM 2010
18 Apr 2007 28 Apr 2008 24 Apr 2009 27 Apr 2010
Lim Yong Wah - - -
Low Kok Hua - - -
Haider Mohamedally Sithawalla
Loh Chin Hua - -
Soon Kong Ann - - -
Tan Guong Ching - -
Oon Chong Howe - -
John Sng Hee Kwee - - -
At the coming AGM to be held in April 2010, Mr Loh Chin Hua, Mr Tan Guong Ching and Mr Oon Chong
Howe will be due for retirement and re-election.
As Mr. Haider M. Sithawalla is over 70 years of age, he will be due for retirement and re-appointment under
Section 153(6) of the Companies Act.
Board Performance
Principle 5: There should be a formal assessment of the effectiveness of the Board as a whole and the
contribution by each Director to the effectiveness of the Board.
Each Board member has equal responsibility to oversee the business and affairs of the Group. The Board’s
performance is ultimately reflected in the performance of the Group. Performance of the Group is measured
by the long-term wealth and value creation of the group. The Board should ensure compliance with applicable
laws. Board members should act in good faith, with due diligence and care, and in the best interests of the
Group and its shareholders. The measure of Board’s performance is also tested through its ability to lend
support to Management at all times and to steer the Group in the right direction.
The financial indicators set out in the Code as guides for the evaluation of Directors, are in the Group’s opinion,
more of a measure of the Management’s performance and hence are less applicable to Directors. Such
financial indicators provide a snapshot of a Group’s previous years’ performance and do not fully measure
performance of the Group.
Reviews of the Board’s performance are undertaken on a continuous basis by the Nomination and Remuneration
Committee with inputs from the other Board members, the Chairman and CEO. Board surveys are conducted
to gather feedback from all members of the Board. Renewals or replacement of Board members do not
necessarily reflect their contributions to-date but may be driven by the need to position and shape the Board
in line with the medium-term needs of the Group.
80 Pteris Global Limited harmony in motion
annual report 2009
reportoncorporategovernance
Access to Information
Principle 6: In order to fulfill their responsibilities, Board members should be provided with complete, adequate
and timely information prior to Board meetings and on an on-going basis.
The Board and the Committees are furnished with adequate and accurate information prior to any meeting so
as to facilitate Directors in the proper and effective discharge of their duties. Board papers are prepared for
each meeting of the Board and are normally circulated in advance of each meeting. The Board papers include
sufficient information from Management on financial, business and corporate issues to enable the Directors
to be properly briefed on issues to be considered at Board meetings.
Where a physical Board meeting is not possible, timely communication with members of the Board is effected
through electronic means, which include emails and teleconferencing. Alternatively, the Management will
arrange to personally meet and brief each Director before seeking the Board’s approval on a particular issue.
The Board has separate and independent access to the Management and the Company Secretary, as well as
to all Board and Board Committee minutes, resolutions and information papers. The members of the Board
seek independent professional advice at the Company’s expenses as and when necessary to enable them to
discharge their responsibilities effectively.
(B) REMuNERATION MATTERS
Procedures for Developing Remuneration Policies
Principle 7: There should be a formal and transparent procedure for developing policy on executive remuneration
and for fixing the remuneration packages of individual Directors. No Director should be involved in deciding
his own remuneration.
The NRC reviews and recommends to the Board for approval the remuneration of all Directors, (including the
CEO and Executive Director) and key executives. The review covers all aspects of remuneration, including but
not limited to, Directors’ fees, salaries, allowances, bonuses, share options and benefits-in-kind. No Director
is involved in deciding his own remuneration.
The NRC also reviews the annual bonus and annual increments on a collective basis of the Management
and Staff, with the aim of building capable and committed management teams through competitive
compensation.
Level and Mix of Remuneration
Principle 8: The level of remuneration should be appropriate to attract, retain and motivate the Directors
needed to run the Group successfully but companies should avoid paying more than is necessary for this
purpose. A significant proportion of executive Directors’ remuneration should be structured so as to link
rewards to corporate and individual performance.
In setting remuneration packages, the Group takes into consideration the remuneration and employment
conditions within the same industry and in comparable companies, as well as the Group’s relative performance
and the performance of individual Directors.
harmony in motion Pteris Global Limited 81
annual report 2009
reportoncorporategovernance
Non-executive Directors receive Director’s fees, in accordance with their contributions, taking into account
factors such as effort and time spend, responsibilities of the Directors and the need to pay competitive fees
to attract, motivate and retain the directors. Directors’ fees are recommended by the Board for approval at
the Group’s AGM. The Directors also took into account the Group’s performance and market practices of
Singapore listed companies in recommending the directors’ fees. In 2008 and 2009, the NRC had proposed
to the Board that the Directors’ Fees be subject to a 10% deduction for the financial years of 2008 and 2009.
This recommendation was approved by the Board.
The remuneration for the executive directors and the key executives comprise a basic salary component and
a variable component which is the annual bonus, based on the performance of the Group as a whole and their
individual performance.
Disclosure of Remuneration
Principle 9: Each company should provide clear disclosure of its remuneration policy, level and mix of
remuneration, and the procedure for setting remuneration in the company’s annual report. It should provide
disclosure in relation to its remuneration policies to enable investors to understand the link between
remuneration paid to Directors and key executives, and performance.
The procedure for setting remuneration and the remuneration policies of the Group are described under
Principle 7 above.
The remuneration of the Directors and top 10 key executives in bands are tabulated below. For the purpose of
calculating the remuneration mix percentages, value of share options awarded during the year are not included.
Remuneration of Directors
The remuneration of Directors for the financial year ended 31 December 2009 is tabularised below.
Share
options
Name of Directors Other awarded
and their respective benefits during
remuneration bands Designation Fees Salaries Bonus in kind the year
S$250,000 to S$499,999
Oon Chong Howe Executive Director/
Chief Executive Officer - 80% 10% 10% -
Below S$250,000
John Sng Hee Kwee Executive Director/
Executive Vice President - 80% 10% 10% -
Below S$100,000
Lim Yong Wah Non-Executive Chairman 100% - - - -
Low Kok Hua Non-Executive Director 100% - - - -
Haider M. Sithawalla Independent Director 100% - - - -
Lim Hwee Chiang Independent Director 100% - - - -
Loh Chin Hua Independent Director 100% - - - -
Rajan Menon Independent Director 100% - - - -
Soon Kong Ann Independent Director 100% - - - -
Tan Guong Ching Independent Director 100% - - - -
The total Directors’ fees proposed for 2009 is S$296,062.
82 Pteris Global Limited harmony in motion
annual report 2009
reportoncorporategovernance
For comparison purposes, the remuneration of Directors for the financial year ended 31 December 2008 is
tabularised below.
Share
options
Name of Directors Other awarded
and their respective benefits during
remuneration bands Designation Fees Salaries Bonus in kind the year
S$250,000 to S$499,999
Oon Chong Howe Executive Director/
Chief Executive Officer - 72% 20% 8% 100,000
John Sng Hee Kwee Executive Director/
Executive Vice President - 75% 19% 6% 75,000
Below S$100,000
Lim Yong Wah Non-Executive Chairman 100% - - - -
Low Kok Hua Non-Executive Director 100% - - - -
Haider M. Sithawalla Independent Director 100% - - - -
Lim Hwee Chiang Independent Director 100% - - - -
Loh Chin Hua Independent Director 100% - - - -
Rajan Menon Independent Director 100% - - - -
Soon Kong Ann Independent Director 100% - - - -
Tan Guong Ching Independent Director 100% - - - -
The total Directors’ fees proposed for 2008 is S$318,098.
Remuneration of the top key executives (who are not Directors)
To maintain confidentiality, the remuneration of the top 10 key executives (who are not Directors) is not
disclosed in individual bands. The remuneration mix below is based on the annual remuneration for all key
personnel listed in the table below.
For Financial Year ended 31 December 2009
Total Share
options
Name of Executive Other awarded
and their No. of benefits during
remuneration bands key executives Salaries Bonus in kind the year
(By alphabetical order)
Below S$250,000
Chai Fook Chuan
Chai Kor Yoon
Chua Choon Beng
Fong Meng Chai
10 84% 8% 8% Nil
Lim Beng Hock
Mohd Taufik Bin Mohd Tahir
Shinomiya Shigeharu
Steven Lwi
Teh Sin Kim @ Tee Sin Kin
Vairakannu Singaram
harmony in motion Pteris Global Limited 83
annual report 2009
reportoncorporategovernance
For Financial Year ended 31 December 2008 (as disclosed in Corporate Governance Report in 2008
Annual Report)
Total Share
options
Name of Executive Other awarded
and their No. of benefits during
remuneration bands key executives Salaries Bonus in kind the year
(By alphabetical order)
Below S$250,000
Chai Fook Chuan
Chai Kor Yoon
Chua Choon Beng
Fong Meng Chai
10 80% 11% 9% 525,000
Lim Beng Hock
Mohd Taufik Bin Mohd Tahir
Shinomiya Shigeharu
Steven Lwi
Teh Sin Kim @ Tee Sin Kin
Vairakannu Singaram
The NRC also administers the Inter-Roller Share Option Scheme 2001 and determines the grant of share
options to the eligible participants. Details of the share options granted to Directors during the year are set
out in the Directors’ Report.
No employee of the Company and its subsidiaries was an immediate family member of any Director, CEO or
substantial shareholders during the year under review.
(C) ACCOuNTABILITY AND AuDIT
Accountability
Principle 10: The Board should present a balanced and understandable assessment of the company’s
performance, position and prospects.
The Board is mindful of its obligation to provide timely, reliable and fair disclosure of material information in
compliance with SGX-ST Listing Manual. In presenting the financial results, the Board has sought to provide
a balanced and reader-friendly assessment of the Group’s performance, position and prospects. The Group’s
financial performance and prospect statements announced in the quarterly and full year financial results
announcements were reviewed carefully during Board meetings before being released.
Financial results are reviewed by AC before they are recommended for adoption by the Board. If required, the
Group’s external auditors’ view will be sought.
84 Pteris Global Limited harmony in motion
annual report 2009
reportoncorporategovernance
Audit Committee
Principle 11: The Board should establish an Audit Committee (“AC”) with written terms of reference, which
clearly set out its authority and duties.
The AC’s terms of reference which describe its major responsibilities are:
(a) Review with external auditors their audit plan and scope of audit examination;
(b) Review with external and internal auditors the adequacy and effectiveness of the Group’s internal controls
and ensure that adequate measures are in place;
(c) Review the assistance given to the external and internal auditors by the Company’s officers;
(d) Review the quarterly announcement of results and the financial statements of the Company and the
Group before submission to the Board for approval and the report of the external auditors;
(e) Recommend the appointment, re-appointment and the remuneration of external auditors; and
(f) Review interested person transactions.
The AC has explicit authority to investigate any matter within its terms of reference, and has full access to
and cooperation of Management, and has full authority to require the attendance of any staff or Directors at
its meetings.
In 2008, the AC recommended the appointment of new external auditors, KPMG. The appointment was
approved by shareholders in the AGM held in 2008. This change is part of a self-imposed rotation of auditors
by the AC. The change was to ensure that the Group’s audit of financial statements constantly receive a fresh
perspective.
The AC has reviewed the non-audit services performed by the external auditors and is satisfied that the
provision of such services has not affected the independence of the external auditors. The AC met with the
external auditors at least once a year without the presence of the Management.
Some but not all of the subsidiaries in the Group were audited by external auditors as some of the subsidiaries
are relatively small size in comparison to the Group in terms of net book value and revenue. The AC is satisfied
that there are sound internal controls applied in these subsidiaries and the scope of audit performed by these
other external auditors is adequate.
harmony in motion Pteris Global Limited 85
annual report 2009
reportoncorporategovernance
Internal Control
Principle 12: The Board should ensure that the Management maintains a sound system of internal controls to
safeguard the shareholders’ investments and the company’s assets.
The Group has put in place internal controls necessary to identify and manage significant business risks. The
Group’s internal audit function provides an independent resource and perspective to the AC by highlighting
any areas of concern discovered during the course of performing such internal audit process.
Management regularly reviews the Group’s business and operational activities to identify areas of significant
business and operational risk as well as measures to control these risks. These include detailed financial and
management reporting, and detailed operational manuals and reports.
The AC reviews the reports submitted by the external and internal auditors relating to the effectiveness of
the Group’s material internal controls, including financial, operational and compliance controls. The Committee
also reviews the effectiveness of the actions taken by Management on the recommendations made by the
internal and external auditors in this respect. The AC is satisfied that there are adequate internal controls in
the Group.
Internal Audit
Principle 13: The Group should establish an internal audit function that is independent of the activities it audits.
In the past, the internal audit function was performed internally. However, as the Group grew, the Board
decided to outsource the internal audit function to an independent professional internal audit firm. This was
carried out in 2008.
The professional internal audit firm is a corporate member of the Singapore branch of the Institute of Internal
Auditors Inc (IIA). The audit work carried out is guided by the Standards for the Professional Practice of Internal
Auditing (“Standards”) developed by the IIA.
A three-year internal audit program was formulated with these three primary objectives:
a) confirming the existence of the internal controls, which are expected to be in place
b) on-going assessment of effectiveness and efficiency of the Group’s control environment
c) ensuring best industry practices are adopted whenever possible and feasible
The three-year program will end in 2010. A new program will be put in place.
The internal auditors plan its internal audit schedules in consultation with the Chief Executive Officer.
The audit plan is submitted to the AC for approval prior to the commencement of the internal audit. All reports
of the Internal Audit are reported to the AC.
Both internal and external auditors have full access to the AC, and the AC has full access to them and may
assign them any specific tasks in relation to their functions.
86 Pteris Global Limited harmony in motion
annual report 2009
reportoncorporategovernance
(D) COMMuNICATION WITH SHAREHOLDERS
Communication with Shareholders
Principle 14: Companies should engage in regular, effective and fair communication with shareholders.
The Group’s policy is to furnish prompt, complete and relevant disclosure in all public announcements,
circular to shareholders and annual reports. The Group believes that shareholders should be given timely
and accurate information.
The Group issues announcements and press releases on an immediate basis, where required, under SGX-ST
Listing Manual. Where immediate disclosure is not practicable, the relevant announcement is made as soon
as possible to ensure that all stakeholders and the public have equal access to the information.
Media and analyst briefings are organised to enable a better appreciation of the Group’s performance and
developments.
Pteris Global website (www.pterisglobal.com) is also a source of information for its shareholders. The Group
recently revamped its web pages. Under the Investor Relations section of the Group’s website, shareholders
can find all announcements, press releases, and corporate presentations. To enhance and encourage
communication with our shareholders and the public, the Group provides an email address for the investors
at investor.relations@pterisglobal.com.
To ensure that the public do not miss out any important announcements, an email alert function is made
available to everyone who subscribes to this function. Email will be sent to subscribers whenever there are
announcements made through SGXNET.
Our recent enhancements to our website also include a simple self-help query function in the Announcements and
Shareholders’ Announcements section. In the Announcements section, users may search for Announcements
by the type and year in which the announcement was made. In the Shareholders’ Announcement section,
users may search for Shareholders’ Announcements by the name and type of Shareholders. With this simple
query tool, users will be able to obtain the information they require in a more efficient manner.
Greater Shareholder Participation
Principle 15: Companies should encourage greater shareholder participation at Annual General Meetings
(AGMs) and allow shareholders the opportunity to communicate their views on various matters affecting
the company.
Shareholders are encouraged to attend general meetings and to participate actively at the AGMs. The notice
of AGM is despatched to shareholders, together with explanatory notes, at least 14 days before the meeting.
Each item of special business included in the notice of the meeting is accompanied, where appropriate, by an
explanation for the proposed resolution.
harmony in motion Pteris Global Limited 87
annual report 2009
reportoncorporategovernance
The Company’s Articles of Association allows a shareholder of the Company to appoint one or two proxies
to attend the AGM and vote in place of the shareholders. Voting in absentia and by electronic mail may only
be possible following careful study to ensure that integrity of information and authentication of the identity of
shareholders through the web is not compromised and is also subject to legislative amendment to recognise
electronic voting.
The Board views the AGM as the principal forum for dialogue with shareholders. It is an opportunity for
shareholders to raise issues and ask the Directors or Management questions regarding the Company and its
operations. Active discussions took place during AGMs. The AC Chairman and NRC Chairman are invited to
address shareholders’ questions relating to the work of these Committees. The Company’s external auditors
are also invited to attend the AGM to assist the Directors in addressing any relevant queries by shareholders
relating to the conduct of audit and the preparation and content of their audit report.
Securities Transactions
The Company has adopted Rule 1207 (18) of the SGX Listing Manual on Dealing in Securities. This has been
incorporated into the Company’s Code of Conduct, which applies to Directors, employees and their immediate
families. The Group requires all Directors, and employees and their immediate families not to trade in Pteris
Global shares during the period beginning one month before and ending on the date of the release of the full
year results as well as during the period beginning two weeks before and ending on the date of the release of
the quarterly results. Reminders are sent via email to remind all Directors and employees.
Interested Person Transactions
There were no interested person transactions during the financial year ended 31 December 2009.
use of proceeds of Rights Issue
S$’000
Proceeds received from Rights Issue 17,004
Proceeds used to repay loan (5,341)
Remaining proceeds as at the date of this report 11,663
88 Pteris Global Limited harmony in motion
annual report 2009
financialstatements
89 Directors’ Report
94 Statement by Directors
95 Independent Auditors’ Report
97 Statements of Financial Position
98 Consolidated Income Statement
99 Consolidated Statement of Comprehensive Income
100 Consolidated Statement of Changes in Equity
102 Consolidated Cash Flow Statement
103 Notes to the Financial Statements
145 Statistics of Shareholdings
146 Share Transactions Statistics
147 Notice of AGM
151 Proxy Form
harmony in motion Pteris Global Limited 89
annual report 2009
directors’report
We submit this annual report to the members of the Company together with the audited financial statements
for the financial year ended 31 December 2009.
Directors
The directors in office at the date of this report are as follows:-
Lim Yong Wah
Low Kok Hua
Haider Mohamedally Sithawalla
Loh Chin Hua
Soon Kong Ann
Tan Guong Ching
Oon Chong Howe
Sng Hee Kwee
Directors’ Interests
According to the register kept by the Company for the purposes of Section 164 of the Companies Act,
Chapter 50 (the Act), particulars of interests of directors who held office at the end of the financial year
(including those held by their spouses, infant children or nominees) in shares and share options in the
Company and in related corporations (other than wholly-owned subsidiaries) are as follows:
Other holdings in which
Holdings in the name the director is deemed
of the director or nominee to have an interest
At beginning At end At beginning At end
of the year of the year of the year of the year
Ordinary shares
Lim Yong Wah 5,534,344 7,748,081 4,080,000 5,712,000
Low Kok Hua 43,534,400 50,948,160 168,000 235,200
Haider Mohamedally Sithawalla 1,246,000 1,744,400 - -
Loh Chin Hua 742,000 1,038,800 - -
Soon Kong Ann 1,026,000 1,800,000 15,338,000 22,173,000
Oon Chong Howe 500,000 2,100,000 - -
Sng Hee Kwee 3,072,100 5,700,940 - -
90 Pteris Global Limited harmony in motion
annual report 2009
directors’report
Note At beginning At end
of the year of the year
In the name of:
Oon Chong Howe
Options to subscribe ordinary shares at:
- $0.735 per share between 16.02.2007 to 15.02.2016 A 150,000 -
- $0.639 per share between 16.02.2007 to 15.02.2016 B - 172,603
- $0.890 per share between 23.02.2008 to 22.02.2017 A 200,000 -
- $0.773 per share between 23.02.2008 to 22.02.2017 B - 230,137
- $0.180 per share between 19.09.2009 to 18.09.2018 A 100,000 -
- $0.156 per share between 19.09.2009 to 18.09.2018 B - 115,068
In the name of:
Sng Hee Kwee
Options to subscribe ordinary shares at:
- $0.890 per share between 23.02.2008 to 22.02.2017 A 75,000 -
- $0.773 per share between 23.02.2008 to 22.02.2017 B - 86,301
- $0.180 per share between 19.09.2009 to 18.09.2018 A 75,000 -
- $0.156 per share between 19.09.2009 to 18.09.2018 B - 86,301
A refers to share options before the rights issue adjustments.
B refers to share options after the rights issue adjustments.
See “Share Options” section below for more details.
Except as disclosed in this report, no director who held office at the end of the financial year had interests
in shares, debentures, warrants or share options of the Company, or of related corporations, either at the
beginning of the financial year, or date of appointment if later, or at the end of the financial year.
There were no changes in any of the above mentioned interests in the Company between the end of the
financial year and 21 January 2010.
Except as disclosed under the “Share Options” section of this report, neither at the end of, nor at any time
during the financial year, was the Company a party to any arrangement whose objects are, or one of whose
objects is, to enable the directors of the Company to acquire benefits by means of the acquisition of shares in
or debentures of the Company or any other body corporate.
Except for salaries, bonuses and fees and those benefits that are disclosed in note 28 to the financial
statements, since the end of the last financial year, no director has received or become entitled to receive a
benefit 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.
harmony in motion Pteris Global Limited 91
annual report 2009
directors’report
Share Options
The Inter-Roller Executives’ Share Option Scheme 2001 (the Scheme) was approved and adopted by its
members at an Extraordinary General Meeting held on 25 May 2001.
The Scheme is administered by the Nomination and Remuneration Committee which comprises the
following Directors:
• Tan Guong Ching (Chairman from 24 April 2009 to 28 February 2010)
• Haider Mohamedally Sithawalla (Appointed as Chairman on 1 March 2010)
• Low Kok Hua
• Loh Chin Hua
In accordance with Rule 845 of the Listing Manual, the maximum size of the Scheme is capped at 15% of the
Company’s total issued share capital. Based on the existing issued share capital at the end of the financial
year of $54,430,885 divided into 465,930,914 shares, the maximum size of the Scheme will be approximately
69,889,637 shares. The Scheme is intended to last for fifteen years.
Other information regarding the Scheme is set out below:
- The exercise prices of the options are set at the market price at the time of grant;
- The options can be exercised one year after the grant. Further vesting period for the exercise of the
options may be set; and
- The options granted expire after five years for non-executive directors and 10 years for the employees of
the Company and its subsidiaries.
On 5 November 2009, the Company announced a renounceable rights issue. Rights shares were issued at
S$0.13 per share on the basis of two rights shares for every five existing shares. As a result of this rights
issue, 133,123,118 of new ordinary shares were issued on 10 December 2009.
Pursuant to Rule 10 of the Inter-Roller Share Option Scheme 2001 (as amended on 18 April 2006)
and as a result of the rights issue announced on 5 November 2009, all unexercised share options as at
5 November 2009 were adjusted. The adjustments made were as follows:
Before adjustment After adjustment
Date of Outstanding Outstanding
options number of Exercise number of Exercise
granted option shares price option shares price
20.02.04 210,000 0.2550 241,644 0.2220
16.02.06 650,000 0.7350 747,944 0.6390
23.02.07 1,225,000 0.8900 1,409,590 0.7730
19.09.08 1,620,000 0.1800 1,864,110 0.1560
3,705,000 4,263,288
92 Pteris Global Limited harmony in motion
annual report 2009
directors’report
At the end of the financial year, details of the options granted under the Scheme on the unissued ordinary
shares of the Company are as follows:
Inter-Roller Engineering Limited Executives’ Share Option Scheme 2001
Options
arising Lapsed/
Date of Balance at Granted from Exercised forfeited Balance at Exercise
options 1 January during rights during during 31 December price per Period
granted 2009 the year issue the year the year 2009 share exercisable
20.02.04 210,000 - 31,644 - - 241,644 $0.222 20.02.05 – 19.02.14
16.02.06 830,000 - 97,944 - (295,068) 632,876 $0.639 16.02.07 – 15.02.16
23.02.07 1,385,000 - 184,590 - (246,301) 1,323,289 $0.773 23.02.08 – 22.02.17
19.09.08 1,810,000 - 244,110 - (224,521) 1,829,589 $0.156 19.09.09 – 18.09.18
4,235,000 - 558,288 - (765,890) 4,027,398
Except as disclosed above, there were no unissued shares of the Company or its subsidiaries under options
granted by the Company or its subsidiaries as at the end of the financial year.
Details of options granted to directors of the Company under the Scheme are as follows:
Addtional
options issued Aggregate Aggregate
arising from options options Aggregate
Options granted rights issue for granted since exercised since options
for financial financial year commencement commencement outstanding
year ended ended of Scheme to of Scheme to as at
31 December 31 December 31 December 31 December 31 December
Name of director 2009 2009 2009 2009 2009
Oon Chong Howe - 67,808 500,000 50,000 517,808
Sng Hee Kwee - 22,602 920,000 770,000 172,602
Mr Oon Chong Howe was appointed as a Director on 1 January 2007. Since his appointment as Director, he
has been granted 300,000 share options. Pursuant to the rights issue undertaken during the financial year,
additional 67,808 share options were issued.
Mr Sng Hee Kwee was appointed as a Director on 26 August 2008. Since his appointment as Director, he
has been granted 75,000 share options. Pursuant to the rights issue undertaken during the financial year,
additional 22,602 share options were issued.
Since the commencement of the Scheme, no options have been granted to the controlling shareholders of the
Company or their associates and no participant under the Scheme has been granted 5% or more of the total
options available under the Scheme.
The options granted by the Company do not entitle the holders of the options, by virtue of such holding, to any
rights to participate in any share issue of any other company.
harmony in motion Pteris Global Limited 93
annual report 2009
directors’report
Audit Committee
The Audit Committee at the date of this report comprises the following members, all of whom are
Independent Directors:
• Haider Mohamedally Sithawalla (Chairman from 24 April 2009 to 28 February 2010)
• Lim Yong Wah (Appointed as Chairman on 1 March 2010)
• Loh Chin Hua
• Soon Kong Ann
The Audit Committee performs the functions set out in Section 201B(5) of the Act, the SGX Listing Manual and
the Code of Corporate Governance.
The Audit Committee held five meetings since the last directors’ report. In performing its functions, the Audit
Committee reviewed the following:
(i) overall scope of both the internal and external audits and the assistance given by the Company’s officers
to the auditors. It met with the Company’s internal and external auditors to discuss the results of their
respective examinations and their evaluation of the Company’s internal accounting controls systems;
(ii) quarterly financial information and annual financial statements of the Group and the Company prior to
their submission to the Directors of the Company for adoption; and
(iii) interested person transactions (as defined in Chapter 9 of the SGX Listing Manual).
The Audit Committee has full access to management and is given the resources required for it to discharge
its functions. It has full authority and the discretion to invite any director or executive officer to attend its
meetings. The Audit Committee recommends the appointment of the external auditors and reviews the level
of audit and non-audit fees (if any).
The Audit Committee is satisfied with the independence and objectivity of the external auditors and has
recommended to the Board of Directors that the auditors, KPMG LLP, be nominated for re-appointment as
auditors at the forthcoming Annual General Meeting of the Company.
Auditors
The auditors, KPMG LLP, have indicated their willingness to accept re-appointment.
On behalf of the Board of Directors
Lim Yong Wah
Director
Oon Chong Howe
Director
26 March 2010
94 Pteris Global Limited harmony in motion
annual report 2009
statementbydirectors
In our opinion:
(a) the financial statements set out on pages 97 to 144 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 31 December 2009 and of the results, changes in
equity and cash flows of the Group for the year ended on that date in accordance with the provisions of
the Singapore Companies Act, Chapter 50 and Singapore Financial Reporting Standards; and
(b) at the date of this statement, there are reasonable grounds to believe that the Company will be able to
pay its debts as and when they fall due.
The Board of Directors has, on the date of this statement, authorised these financial statements for issue.
On behalf of the Board of Directors
Lim Yong Wah
Director
Oon Chong Howe
Director
26 March 2010
harmony in motion Pteris Global Limited 95
annual report 2009
independentauditors’report
Members of the Company
Pteris Global Limited
We have audited the accompanying financial statements of Pteris Global Limited (the Company) and its
subsidiaries (the Group), which comprise the statements of financial position of the Group and of the Company
as at 31 December 2009, statement of comprehensive income, statement of changes in equity and cash flow
statement of the Group for the year then ended, and a summary of significant accounting policies and other
explanatory notes, as set out on pages 97 to 144.
Management’s responsibility for the financial statements
Management is responsible for the preparation and fair presentation of these financial statements in accordance
with the provisions of the Singapore Companies Act, Chapter 50 (the Act) and Singapore Financial Reporting
Standards. This responsibility includes:
(a) devising and maintaining a system of internal accounting controls sufficient to provide a reasonable
assurance that assets are safeguarded against loss from unauthorised use or disposition; and transactions
are properly authorised and that they are recorded as necessary to permit the preparation of true and fair
profit and loss accounts and balance sheets and to maintain accountability of assets;
(b) selecting and applying appropriate accounting policies; and
(c) 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 management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
audit opinion.
96 Pteris Global Limited harmony in motion
annual report 2009
independentauditors’report
Opinion
In our opinion:
(a) the consolidated financial statements of the Group and the statement of financial position of the Company
are properly drawn up in accordance with the provisions of the Act and Singapore Financial Reporting
Standards to give a true and fair view of the state of affairs of the Group and of the Company as at 31
December 2009 and of the results, changes in equity and cash flows of the Group 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.
KPMG LLP
Public Accountants and
Certified Public Accountants
Singapore
26 March 2010
harmony in motion Pteris Global Limited 97
annual report 2009
statementsoffinancialposition
As At 31 December 2009
Group Company
Note 2009 2008 2009 2008
$’000 $’000 $’000 $’000
Non-Current Assets
Property, plant and equipment 3 40,128 27,120 27,138 15,685
Subsidiaries 4 - - 14,281 18,528
Goodwill on consolidation 5 - 1,500 - -
Other financial assets 6 169 170 160 160
Deferred tax assets 7 215 359 - 268
40,512 29,149 41,579 34,641
Current Assets
Inventories 8 2,285 4,360 1,577 3,124
Contract work-in-progress 9 45,168 46,168 41,848 40,812
Trade and other receivables 10 23,866 21,238 26,637 21,042
Other financial assets 6 1,095 2,324 1,043 2,271
Cash and cash equivalents 11 23,855 17,781 17,289 15,901
96,269 91,871 88,394 83,150
Total Assets 136,781 121,020 129,973 117,791
Equity Attributable to Equity
Holders of the Company
Share capital 12 54,431 37,427 54,431 37,427
Reserves 13 34,416 29,642 26,155 29,454
Total Equity 88,847 67,069 80,586 66,881
Non-Current Liabilities
Deferred tax liabilities 7 1,091 328 555 -
Financial liabilities 14 8,008 11,026 5,556 7,778
9,099 11,354 6,111 7,778
Current Liabilities
Trade and other payables 15 15,933 18,044 21,523 22,718
Excess of progress billing over
contract work-in-progress 9 3,974 4,165 3,886 4,081
Financial liabilities 14 16,663 14,316 15,746 12,669
Provision for warranties 16 2,074 2,998 2,074 2,998
Provision for taxation 191 3,074 47 666
38,835 42,597 43,276 43,132
Total Liabilities 47,934 53,951 49,387 50,910
Total Equity and Liabilities 136,781 121,020 129,973 117,791
The accompanying notes form an integral part of these financial statements.
98 Pteris Global Limited harmony in motion
annual report 2009
consolidatedincomestatement
Year Ended 31 December 2009
Note 2009 2008
$’000 $’000
Revenue 17 87,296 75,945
Other income 18 614 2,783
Materials, subcontract and other direct cost (58,048) (46,608)
Staff costs 19 (18,896) (20,644)
Depreciation and amortisation 3 (1,904) (1,300)
Foreign exchange differences and hedging cost 20 402 (1,952)
Other operating expenses 21 (8,449) (8,885)
Impairment loss on goodwill on consolidation 5 (1,500) (1,335)
Finance expense 22 (817) (572)
Loss before income tax (1,302) (2,568)
Income tax expense 23 2,005 (484)
Profit/(Loss) for the year and attributable to
equity holders of the Company 703 (3,052)
Earnings/(Loss) per share
- basic (cents) 24 0.18 (0.80)
- diluted (cents) 24 0.18 (0.80)
The accompanying notes form an integral part of these financial statements.
harmony in motion Pteris Global Limited 99
annual report 2009
consolidatedstatementofcomprehensiveincome
Year Ended 31 December 2009
2009 2008
$’000 $’000
Profit/(Loss) for the year 703 (3,052)
Other comprehensive income
Translation differences relating to financial statements of foreign subsidiaries (525) 85
Effective portion of changes in fair value of cash flow hedges, net of tax (500) 731
Revaluation of property, plant and equipment, net of tax 5,047 -
Other comprehensive income for the year, net of tax 4,022 816
Total comprehensive income for the year 4,725 (2,236)
The accompanying notes form an integral part of these financial statements.
Foreign
100
currency Share
Share Revaluation translation Statutory Dividend option Hedging Accumulated Total
capital reserve reserve reserve reserve reserve reserve profits equity
Group $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000
At 1 January 2008,
as previously reported 37,427 5,675 (435) 68 1,664 628 (213) 28,720 73,534
Adjustment to correct project
revenue recognition - - - - - - - (2,621) (2,621)
Year Ended 31 December 2009
At 1 January 2008, as restated 37,427 5,675 (435) 68 1,664 628 (213) 26,099 70,913
annual report 2009
Total comprehensive
Pteris Global Limited
income/(loss) for the year
Loss for the year - - - - - - - (3,052) (3,052)
Other comprehensive income
Translation differences relating
to financial statements of
foreign subsidiaries - - 85 - - - - - 85
Effective portion of changes
in fair value of cash flow
hedges, net of tax - - - - - - 731 - 731
Total other comprehensive
income - - 85 - - - 731 - 816
Total comprehensive
loss for the year - - 85 - - - 731 (3,052) (2,236)
Transactions with owners,
recorded directly in equity
harmony in motion
Contributions by and
distributions to owners
Transfer arising from share
options forfeited/lapsed - - - - - (119) - 119 -
Share-based option expense - - - - - 56 - - 56
Reclassification of revaluation
surplus to accumulated
profits upon sale of
leasehold properties - (5,118) - - - - - 5,118 -
2007 fourth quarter and final
one-tier tax-exempt
dividend of 0.5 cents per
share paid - - - - (1,664) - - - (1,664)
consolidatedstatementofchangesinequity
Total transactions with owners - (5,118) - - (1,664) (63) - 5,237 (1,608)
At 31 December 2008 37,427 557 (350) 68 - 565 518 28,284 67,069
The accompanying notes form an integral part of these financial statements.
Foreign
currency Share
Share Revaluation translation Statutory option Hedging Accumulated Total
capital reserve reserve reserve reserve reserve profits equity
Group $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000
At 1 January 2009 37,427 557 (350) 68 565 518 28,284 67,069
Total comprehensive income/
(loss) for the year
Year Ended 31 December 2009
Profit for the year - - - - - - 703 703
Other comprehensive income
Translation differences relating to financial
statements of foreign subsidiaries - - (525) - - - - (525)
Effective portion of changes in fair value of
cash flow hedges, net of tax - - - - - (500) - (500)
Revaluation of property, plant and equipment,
net of tax - 5,047 - - - - - 5,047
Total other comprehensive income - 5,047 (525) - - (500) - 4,022
Total comprehensive income for the year - 5,047 (525) - - (500) 703 4,725
Transactions with owners, recorded
directly in equity
Contributions by and distributions
harmony in motion
to owners
Transfer arising from share options
forfeited/lapsed - - - - (124) - 124 -
Share-based option expense - - - - 49 - - 49
Issuance of new shares arising from
rights issue 17,004 - - - - - - 17,004
Total transactions with owners 17,004 (75) 124 17,053
At 31 December 2009 54,431 5,604 (875) 68 490 18 29,111 88,847
annual report 2009
Pteris Global Limited
consolidatedstatementofchangesinequity
101
The accompanying notes form an integral part of these financial statements.
102 Pteris Global Limited harmony in motion
annual report 2009
consolidatedcashflowstatement
Year Ended 31 December 2009
Note 2009 2008
$’000 $’000
Operating Activities
Loss before income tax (1,302) (2,568)
Adjustments for:
Depreciation and amortisation of property, plant and equipment 3 1,904 1,300
Equity-settled share-based payment transactions 19 49 56
Loss/(Gain) on disposal of property, plant and equipment
and asset held for sale 31 (2,514)
Unrealised loss of financial asset held for trading 1 37
Unrealised exchange differences on cash and cash equivalents (183) -
Impairment loss on goodwill on consolidation 5 1,500 1,335
Write-off on property, plant and equipment 21 5 646
Provision for warranty 16 1,127 1,770
Dividend income 18 (93) (46)
Interest income 18 (31) (77)
Interest expense 817 572
Operating profit before working capital changes 3,825 511
Changes in working capital:
Trade and other receivables (2,112) (726)
Inventories and contract work-in-progress 3,071 7,403
Trade and other payables and accruals (3,320) (586)
Provision utilised (2,051) (1,639)
Income taxes paid (727) (1,076)
Cash flows from operating activities (1,314) 3,887
Investing Activities
Proceeds from sale of property, plant and equipment and
asset held for sale - 11,418
Purchase of property, plant and equipment (9,261) (13,028)
Interest received 31 77
Dividend received 93 46
Cash flows from investing activities (9,137) (1,487)
Financing Activities
Net proceeds from rights issue 17,004 -
(Repayment)/Proceeds from long-term borrowings (3,018) 10,000
Net proceeds of short-term borrowings from banks 3,327 1,559
Dividends paid - (1,664)
Interest paid (817) (572)
Cash flows from financing activities 16,496 9,323
Net increase in cash and cash equivalents 6,045 11,723
Cash and cash equivalents at beginning of year 17,781 5,753
Effects of exchange rate fluctuations 29 305
Cash and cash equivalents at end of year 23,855 17,781
The accompanying notes form an integral part of these financial statements.
harmony in motion Pteris Global Limited 103
annual report 2009
notestothefinancialstatements
These notes form an integral part of the financial statements.
The financial statements were authorised for issue by the Board of Directors on 26 March 2010.
1 Domicile and Activities
Pteris Global Limited (the Company) is incorporated in the Republic of Singapore and has its registered
office at 28 Quality Road, Singapore 618828.
The principal activities of the Company and its subsidiaries (the Group) consist of the provision of
engineering and computer software solutions of airport logistics and material handling. These include
engineering, design, manufacture, installation and maintenance works.
2 Summary of Significant Accounting Policies
2.1 Basis of Preparation
The financial statements have been prepared in accordance with Singapore Financial Reporting
Standards (FRS).
The financial statements have been prepared on the historical cost basis except for land and buildings,
and certain financial assets and liabilities which are measured at fair value.
The financial statements are presented in Singapore dollars which is the Company’s functional
currency. All financial information presented in Singapore dollars has been rounded to the nearest
thousand, unless otherwise stated.
The preparation of financial statements in conformity with FRS requires management to make
judgements, estimates and assumptions that affect the application of accounting policies and
the reported amounts of assets, liabilities, income and expenses. Actual results may differ from
these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting
estimates are recognised in the period in which the estimate is revised and in any future
periods affected.
In particular, information about significant areas of estimation uncertainty and critical judgements in
applying accounting policies that have the most significant effect on the amount recognised in the
financial statements are described in the following notes:
• Note 5 – assumptions relating to recoverable amounts of goodwill on consolidation
•
Note 9 – assumptions on the valuation and the percentage of completion of contract
work-in-progress
• m
Note 16 – easurement of provision for warranties
•
Note 26 – valuation of derivative financial instruments
The accounting policies set out below have been applied consistently by the Group to all periods
presented in these financial statements.
104 Pteris Global Limited harmony in motion
annual report 2009
notestothefinancialstatements
2 Summary of Significant Accounting Policies (cont’d)
2.1 Basis of Preparation (cont’d)
Changes in accounting policies
Overview
Starting 1 January 2009 on adoption of new/revised FRSs, the Group has changed its accounting
policies in the following areas:
• Determination and presentation of operating segments
• Presentation of financial statements
• Disclosure of contractual maturity analysis
Determination and presentation of operating segments
As of 1 January 2009, the Group determines and presents operating segments based on the information
provided to the Chief Executive Officer (CEO), who is the Group’s chief operating decision maker.
This change in accounting policy is due to the adoption of FRS 108 Operating Segments. Previously
operating segments were determined and presented in accordance with FRS 14 Segment Reporting.
The new accounting policy in respect of operating segment disclosures is presented as follows:
Comparative segment information has been re-presented in conformity with the transitional
requirements of such standard. Since the change in accounting policy only impacts presentation and
disclosure aspects, there is no impact on earnings per share.
An operating segment is a component of the Group that engages in business activities from which it
may earn revenues and incur expenses, including revenues and expenses that relate to transactions
with any of the Group’s other components. An operating segment’s operating results are reviewed
regularly by the CEO to make decisions about resources to be allocated to the segment and assess
its performance, and for which discrete financial information is available. For this purpose, the Group
determines that it has only one operating segment relating to the provision of engineering and
computer software solutions of airport logistics and material handling.
Segment results that are reported to the CEO include items directly attributable to a segment as well
as those that can be allocated on a reasonable basis. Unallocated items comprise mainly corporate
assets (primarily the Company’s headquarters), head office expenses, and income tax assets
and liabilities.
Segment capital expenditure is the total cost incurred during the period to acquire property, plant and
equipment, and intangible assets other than goodwill.
Presentation of financial statements
The Group applies revised FRS 1 Presentation of Financial Statements (2008), which became effective
as of 1 January 2009. As a result, the Group presents in the consolidated statement of changes in
equity all owner changes in equity, whereas all non-owner changes in equity are presented in the
consolidated statement of comprehensive income.
Comparative information has been re-presented so that it is also in conformity with the revised
standard. Since the change in accounting policy only impacts presentation, there is no impact on
earnings per share.
harmony in motion Pteris Global Limited 105
annual report 2009
notestothefinancialstatements
2 Summary of Significant Accounting Policies (cont’d)
2.1 Basis of Preparation (cont’d)
Disclosure of contractual maturity analysis
The Group applies the amendments to FRS 107 Financial Instruments: Disclosures, which became
effective as of 1 January 2009. As a result, the Group discloses the maximum amount of issued
financial guarantees in the earliest time period for which the guarantees could be called upon in
the contractual maturity analysis. Previously, the Group disclosed the maximum amount of issued
financial guarantees in the contractual maturity analysis only if the Group assessed that it is probable
that the guarantee would be called upon (see note 26).
Since the change in accounting policy only impacts presentation and disclosure, there is no impact
on earnings per share.
The accounting policies set out below have been applied consistently to all periods presented
in these financial statements, and have been applied consistently by Group entities, except as
explained above.
2.2 Consolidation
Business combinations
Business combinations are accounted for under the purchase method. The cost of an acquisition is
measured at the fair value of the assets given, equity instruments issued and liabilities incurred or
assumed at the date of exchange, plus costs directly attributable to the acquisition.
The excess of the Group’s interest in the net fair value of the identifiable assets, liabilities and
contingent liabilities over the cost of acquisition, representing negative goodwill, is credited to the
income statement in the period of the acquisition.
Subsidiaries
Subsidiaries are entities controlled by the Group. The financial statements of subsidiaries are included
in the consolidated financial statements from the date that control commences until the date that
control ceases. The accounting policies of subsidiaries have been changed when necessary to align
them with policies adopted by the Group.
Transactions eliminated on consolidation
Intra-group balances and transactions, and any unrealised income or expenses arising from intra-
group transactions, are eliminated in preparing the consolidated financial statements.
Accounting for subsidiaries by the Company
Investments in subsidiaries are stated in the Company’s balance sheet at cost less accumulated
impairment losses.
106 Pteris Global Limited harmony in motion
annual report 2009
notestothefinancialstatements
2 Summary of Significant Accounting Policies (cont’d)
2.3 Foreign Currencies
Foreign currency transactions
Transactions in foreign currencies are translated at the respective functional currencies of Group
entities at the exchange rate at the date of the transaction. Monetary assets and liabilities denominated
in foreign currencies at the reporting date are retranslated to the functional currency at the exchange
rate at the reporting date. Non-monetary assets and liabilities denominated in foreign currencies that
are measured at fair value are retranslated to the functional currency at the exchange rate at the date
on which the fair value was determined.
Foreign currency differences arising on retranslation are recognised in the income statement except
for differences arising on the retranslation of monetary items that in substance form part of the
Group’s net investment in a foreign operation (see below).
Foreign operations
The assets and liabilities of foreign operations are translated to Singapore dollars at exchange rates
prevailing at the reporting date. The income and expenses of foreign operations are translated to
Singapore dollars at exchange rates prevailing at the dates of the transactions. Goodwill and fair value
adjustments arising on the acquisition of a foreign operation on or after 1 January 2005 are treated as
assets and liabilities of the foreign operation and translated at the closing rate. For acquisitions prior
to 1 January 2005, the exchange rates at the date of acquisition were used.
Foreign currency differences are recognised in other comprehensive income. When a foreign
operation is disposed of, in part or in full, the relevant amount in the foreign exchange translation
reserve is transferred to the income statement.
When the settlement of a monetary item receivable from or payable to a foreign operation is neither
planned nor likely in the foreseeable future, foreign exchange gains and losses arising from such
a monetary item are considered to form part of a net investment in a foreign operation and are
recognised in other comprehensive income, and are presented within equity in the foreign currency
translation reserve.
2.4 Property, Plant and Equipment
Property, plant and equipment are stated at cost less accumulated depreciation and impairment losses
except for land and buildings, which are stated at their revalued amounts. The revalued amount is the
fair value at the date of revaluation less any subsequent accumulated depreciation and subsequent
accumulated impairment losses. Revaluations are carried out by independent professional valuers
regularly such that the carrying amount of these assets does not differ materially from that which
would be determined using fair values at the balance sheet date.
Any increase in the revaluation amount is recognised in other comprehensive income statement
and presented in the revaluation reserve in equity unless it offsets a previous decrease in value of
the same asset that was recognised in the income statement. A decrease in value is recognised
in the income statement where it exceeds the increase previously recognised in the revaluation
reserve. Upon disposal, any related revaluation reserve is transferred from the revaluation reserve to
accumulated profits and is not taken into account in arriving at the gain or loss on disposal.
harmony in motion Pteris Global Limited 107
annual report 2009
notestothefinancialstatements
2 Summary of Significant Accounting Policies (cont’d)
2.4 Property, Plant and Equipment (cont’d)
Cost includes expenditure that is directly attributable to the acquisition of the asset. The cost of self-
constructed assets includes the cost of materials and direct labour, any other costs directly attributable
to bringing the asset to a working condition for its intended use, and the cost of dismantling and
removing the items and restoring the site on which they are located, and capitalised borrowing costs.
Purchased software that is integral to the functionality of the related equipment is capitalised as part
of that equipment.
When parts of an item of property, plant and equipment have different useful lives, they are accounted
for as separate items (major components) of property, plant and equipment.
The cost of replacing part of an item of property, plant and equipment is recognised in the carrying
amount of the item if it is probable that the future economic benefits embodied within the part will
flow to the Group and its cost can be measured reliably. The costs of the day-to-day servicing of
property, plant and equipment are recognised in the income statement as incurred.
Freehold land and asset under construction are not depreciated. Depreciation on other property, plant
and equipment is recognised in the income statement on a straight-line basis over the estimated
useful lives of each part of an item of property, plant and equipment.
The estimated useful lives are as follows:
• Leasehold properties R
emaining life of the lease, subject to a maximum of 80 years
• Motor vehicles 7 years
• Plant and machinery 3 - 10 years
• Computer systems 3 years
• Others 3 - 10 years
Depreciation methods, useful lives and residual values are reviewed, and adjusted as appropriate, at
each reporting date. Fully depreciated assets are retained in the financial statements until they are
no longer in use.
2.5 Goodwill on Consolidation
Goodwill acquired in a business combination is 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 of the acquiree. Following initial recognition, goodwill is measured
at cost less any accumulated impairment losses. Goodwill is tested for impairment annually or more
frequently if events or changes in circumstances indicate that the carrying value may be impaired.
2.6 Inventories
Consumables and raw materials
Inventories, comprising mainly consumables and raw materials acquired by the Group, are stated at
the lower of cost and net realisable value. Cost is calculated using the weighted average cost formula
and comprises all costs of purchase, costs of conversion and other costs incurred in bringing the
inventories to their present location and condition. Net realisable value is the estimated selling price
in the ordinary course of business less the estimated costs of completion and selling expenses.
108 Pteris Global Limited harmony in motion
annual report 2009
notestothefinancialstatements
2 Summary of Significant Accounting Policies (cont’d)
2.6 Inventories (cont’d)
Contract work-in-progress
Contract work-in-progress represents the gross unbilled amount expected to be collected from
customers for contract work performed to date. It is measured at cost plus profit recognised to date
less progress billings and recognised losses. Cost includes all expenditure related directly to specific
projects and an allocation of fixed and variable overheads incurred in the Group’s contract activities
based on normal operating capacity.
If payments received from customers exceed the income recognised, the difference is presented as
excess of progress billing over contract work-in-progress in the statement of financial position.
2.7 Financial Instruments
Financial instruments can be classified into non-derivative financial instruments and derivative
financial instruments.
Non-derivative financial instruments are financial assets and financial liabilities which comprise
investments in equity securities, trade and other receivables, cash and cash equivalents, borrowings,
and trade and other payables.
Derivative financial instruments comprise foreign exchange forward contracts which are entered to
hedge foreign currency risk exposures.
Non-derivative financial instruments
Non-derivative financial instruments are recognised initially at fair value plus any directly attributable
transaction costs. Subsequent to initial recognition, non-derivative financial instruments are measured
as described below.
A financial instrument is recognised if the Group becomes a party to the contractual provisions
of the instrument. Financial assets are derecognised if the Group’s contractual rights to the cash
flows from the financial assets expire or if the Group transfers the financial asset to another party
without retaining control or transfers substantially all the risks and rewards of the asset. Regular
way purchases and sales of financial assets are accounted for at trade date, i.e., the date that the
Group commits itself to purchase or sell the asset. Financial liabilities are derecognised if the Group’s
obligations specified in the contract expire or are discharged or cancelled.
Cash and cash equivalents comprise cash balances and bank deposits. Bank overdrafts that are
repayable on demand and that form an integral part of the Group’s cash management are included as
a component of cash and cash equivalents for the purpose of the statement of cash flows.
Financial assets at fair value through profit or loss
An instrument is classified as at fair value through profit or loss if it is classified as held for trading or is
designated as such upon initial recognition. Financial instruments are designated as fair value through
profit or loss if the Group manages such investments and makes purchase and sale decisions based
on their fair value in accordance with the Group’s documented risk management and investment
strategies. Upon initial recognition, attributable transaction costs are recognised in the income
statement when incurred. Financial instruments at fair value through profit or loss are measured at
fair value, and changes therein are recognised in the income statement.
harmony in motion Pteris Global Limited 109
annual report 2009
notestothefinancialstatements
2 Summary of Significant Accounting Policies (cont’d)
2.7 Financial Instruments (cont’d)
Other investments
Unquoted equity securities, which do not have a quoted market price in an active market and whose
fair value cannot be reliably measured, are stated at cost less impairment losses.
Gains or losses on disposal of equity securities, are determined as the difference between the net
disposal proceeds and the carrying amount of the investments and are accounted for in the income
statement as they arise.
Others
Other non-derivative financial instruments are measured at amortised cost using the effective interest
method, less any impairment losses.
Derivative financial instruments and hedging activities
The Group holds derivative financial instruments to hedge its foreign currency risk exposures.
On initial designation of the hedge, the Group formally documents the relationship between the
hedging instruments and hedged items, including the risk management objectives and strategy
in undertaking the hedge transaction, together with the methods that will be used to assess the
effectiveness of the hedging relationship. The Group makes an assessment, both at the inception of
the hedge relationship as well as on an ongoing basis, whether the hedging instruments are expected
to be “highly effective” in offsetting the changes in the fair value or cash flows of the respective
hedged items during the period for which the hedge is designated, and whether the actual results of
each hedge are within a range of 80% - 125%. For a cash flow hedge of a forecast transaction, the
transaction should be highly probable to occur and should present an exposure to variations in cash
flows that could ultimately affect reported net income.
Derivative financial instruments are recognised initially at fair value; attributable transaction costs
are recognised in the income statement when incurred. Subsequent to initial recognition, derivative
financial instruments are measured at fair value.
The gain or loss on remeasurement to fair value is recognised immediately in the income statement.
However, where derivatives qualify for hedge accounting, recognition of any resultant gain or loss
depends on the nature of the item being hedged as described below.
Cash flow hedges
Changes in the fair value of the derivative hedging instrument designated as a cash flow hedge are
recognised directly in other comprehensive income and presented in the hedging reserve in equity
to the extent that the hedge is effective. To the extent that the hedge is ineffective, changes in fair
value are recognised in the income statement.
110 Pteris Global Limited harmony in motion
annual report 2009
notestothefinancialstatements
2 Summary of Significant Accounting Policies (cont’d)
2.7 Financial Instruments (cont’d)
Cash flow hedges (cont’d)
If the hedging instrument no longer meets the criteria for hedge accounting, expires or is sold,
terminated or exercised, hedge accounting is discontinued prospectively. The cumulative gain or
loss previously recognised in other comprehensive income and presented in the hedging reserve in
equity remains there until the forecast transaction occurs. When the hedged item is a non-financial
asset, the amount recognised in other comprehensive income is transferred to the carrying amount
of the asset when it is recognised. In other cases, the amount recognised in other comprehensive
income is transferred to the income statement in the same period that the hedged item affects the
income statement.
When the hedged transaction is no longer expected to occur, the gains and losses that were
previously recognised in the other comprehensive income are transferred to the income statement
immediately.
Impairment of financial assets
A financial asset is assessed at each reporting date to determine whether there is any objective
evidence that it is impaired. A financial asset is considered to be impaired if objective evidence
indicates that one or more events have had a negative effect on the estimated future cash flows of
that asset.
Objective evidence that financial assets (including equity securities) are impaired can include default or
delinquency by a debtor, restructuring of an amount due to the Group on terms that the Group would
not consider otherwise, indications that a debtor or issuer will enter bankruptcy, the disappearance
of an active market for a security. In addition, for an investment in an equity security, a significant or
prolonged decline in its fair value below its cost is objective evidence of impairment.
An impairment loss in respect of a financial asset measured at amortised cost is calculated as the
difference between its carrying amount, and the present value of the estimated future cash flows
discounted at the original effective interest rate.
Individually significant financial assets are tested for impairment on an individual basis. The remaining
financial assets are assessed collectively in groups that share similar credit risk characteristics.
In assessing collective impairment, the Group uses historical trends of the probability of default,
timing of recoveries and the amount of loss incurred, adjusted for management’s judgement as
to whether current economic and credit conditions are such that the actual losses are likely to be
greater or less than suggested by historical trends.
All impairment losses are recognised in the income statement.
Impairment losses in respect of financial assets measured at amortised cost are reversed if the
subsequent increase in fair value can be related objectively to an event occurring after the impairment
loss was recognised.
harmony in motion Pteris Global Limited 111
annual report 2009
notestothefinancialstatements
2 Summary of Significant Accounting Policies (cont’d)
2.7 Financial Instruments (cont’d)
Impairment of financial assets (cont’d)
Impairment losses recognised in a previous interim period in respect of financial assets carried at
cost are not reversed even if the impairment losses would have been reduced or avoided had the
impairment assessment been made at subsequent reporting or balance sheet date.
Intra-group financial guarantee
The Company has issued corporate guarantees to banks for borrowings of its subsidiaries. These
guarantees are financial guarantees as they require the Company to reimburse the banks if the
subsidiaries fail to make principal or interest payments when due in accordance with the terms of
their borrowings.
Financial guarantees are initially recognised at their fair values plus transaction costs in the Company’s
balance sheet. Financial guarantees are subsequently amortised to the income statement over the
period of the subsidiaries’ borrowings, unless it is probable that the Company will reimburse the bank
for an amount higher than the unamortised amount. In this case, the financial guarantees shall be
carried at the expected amount payable to the bank in the Company’s balance sheet. When financial
guarantees are terminated before their original expiry date, the carrying amount of the financial
guarantees is transferred to the income statement.
Share capital
Ordinary shares are classified as equity.
Incremental costs directly attributable to the issue of ordinary shares and share options are recognised
as a deduction from equity, net of tax effects.
2.8 Impairment – Non-Financial Assets
The carrying amounts of the Group’s non-financial assets are reviewed at each reporting date to
determine whether there is any indication of impairment. If any such indication exists, the assets’
recoverable amounts are estimated. For goodwill, recoverable amount is estimated at each reporting
date, and as when indicators of impairment are identified.
An impairment loss is recognised if the carrying amount of an asset or its cash-generating unit
exceeds its recoverable amount. A cash-generating unit is the smallest identifiable asset group that
generates cash flows that largely are independent from other assets and groups. Impairment losses
are recognised in the income statement. Impairment losses recognised in respect of cash-generating
units are allocated first to reduce the carrying amount of any goodwill allocated to the units and then
to reduce the carrying amount of the other assets in the unit (group of units) on a pro rata basis.
The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its
fair value less costs to sell. In assessing value in use, the estimated future cash flows are discounted
to their present value using a pre-tax discount rate that reflects current market assessments of the
time value of money and the risks specific to the asset or cash-generating unit.
112 Pteris Global Limited harmony in motion
annual report 2009
notestothefinancialstatements
2 Summary of Significant Accounting Policies (cont’d)
2.8 Impairment – Non-Financial Assets (cont’d)
An impairment loss in respect of goodwill is not reversed. In respect of other assets, impairment
losses recognised in prior periods are assessed at each reporting date for any indications that the
loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in
the estimates used to determine the recoverable amount. An impairment loss is reversed only to the
extent that the asset’s carrying amount does not exceed the carrying amount that would have been
determined, net of depreciation, if no impairment loss had been recognised.
2.9 Provision for Warranties
A provision is recognised if, as a result of a past event, the Group has a present legal or constructive
obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will
be required to settle the obligation. Provisions are determined by discounting the expected future
cash flows at a pre-tax rate that reflects current market assessments of the time value of money and
the risks specific to the liability.
A provision for warranties is recognised when the underlying services are rendered. The provision is
based on historical warranty data and a weighting of all possible outcomes against their associated
probabilities.
2.10 Employee Benefits
Defined contribution plans
Obligations for contributions to defined contribution plans are recognised as an expense in the income
statement during which services are rendered by employees.
Short-term benefits
Short-term employee benefit obligations are measured on an undiscounted basis and are expensed
as the related service is provided.
A provision is recognised for the amount expected to be paid under short-term cash bonus if the
Group has a present legal or constructive obligation to pay this amount as a result of past service
provided by the employee and the obligation can be estimated reliably.
Share-based payment transactions
The share option programme allows Group employees to acquire shares of the Company. The fair
value of options granted is recognised as an employee expense with a corresponding increase in
equity. The fair value is measured at grant date and spread over the vesting period during which
the employees become unconditionally entitled to the options. At each balance sheet date, the
Company revises its estimates of the number of options that are expected to become exercisable. It
recognises the impact of the revision of original estimates in employee expense and in a corresponding
adjustment to equity over the remaining vesting period.
The proceeds received net of any directly attributable transaction costs are credited to share capital
when the options are exercised.
harmony in motion Pteris Global Limited 113
annual report 2009
notestothefinancialstatements
2 Summary of Significant Accounting Policies (cont’d)
2.11 Revenue Recognition
When the outcome of a contract can be estimated reliably, revenue from a fixed price contract is
recognised using the percentage of completion method, measured by reference to the percentage
of contract costs incurred to date to estimated total contract costs for the contract. Contract revenue
includes the initial amount agreed in the contract plus any variations in contract work, claims and
incentive payments to the extent that it is probable that they will result in revenue and can be
measured reliably.
When the outcome of a contract cannot be estimated reliably, revenue is recognised only to the
extent of contract costs incurred that is probable of recovery. An expected loss on a contract is
recognised immediately in the income statement.
2.12 Finance Expenses and Other Income
Finance expenses comprise interest expense on borrowings that is recognised in the income
statement. All borrowing costs are recognised in the income statement using the effective interest
method, except to the extent that they are capitalised as being directly attributable to the acquisition,
construction or production of an asset which necessarily takes a substantial period of time to be
prepared for its intended use or sale.
Other income comprises interest income and dividend income that are recognised in the income
statement. Interest income is recognised as it accrues, using the effective interest method. Dividend
income is recognised on the date that the Group’s right to receive payment is established, which in
the case of quoted securities is the ex-dividend date.
Foreign currency gains and losses are presented on a net basis.
2.13 Income Tax Expense
Income tax expense comprises current and deferred tax. Income tax expense is recognised in the
income statement except to the extent that it relates to items recognised directly in equity, in which
case it is recognised in equity or in other comprehensive income.
Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted
or substantively enacted at the reporting date, and any adjustment to tax payable in respect of
previous years.
Deferred tax is recognised using the balance sheet method, providing for temporary differences
between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts
used for taxation purposes. Deferred tax is not recognised for the following temporary differences: the
initial recognition of goodwill, the initial recognition of assets or liabilities in a transaction that is not a
business combination and that affects neither accounting nor taxable profit, and differences relating
to investments in subsidiaries to the extent that they probably will not reverse in the foreseeable
future. Deferred tax is measured at the tax rates that are expected to be applied to the temporary
differences when they reverse, based on the laws that have been enacted or substantively enacted
by the reporting date. Deferred tax assets and liabilities are offset if there is a legally enforceable
right to offset current tax liabilities and assets and they relate to income taxes levied by the same tax
authority on the same taxable entity, or on different tax entities, but they intend to settle current tax
liabilities and assets on a net basis or their tax assets and liabilities will be realised simultaneously.
114 Pteris Global Limited harmony in motion
annual report 2009
notestothefinancialstatements
2 Summary of Significant Accounting Policies (cont’d)
2.13 Income Tax Expense (cont’d)
A deferred tax asset is recognised to the extent that it is probable that future taxable profits will be
available against which temporary differences can be utilised. Deferred tax assets are reviewed at
each reporting date and are reduced to the extent that it is no longer probable that the related tax
benefit will be realised.
2.14 Operating Leases
Where the Group has the use of assets under operating leases, payments made under the leases
are recognised in the income statement on a straight-line basis over the term of the lease. Lease
incentives received are recognised in the income statement as an integral part of the total lease
payments made.
2.15 Government Grants
Cash grants received from the government are recognised in the income statement upon receipt.
2.16 Earnings Per Share
The Group presents basic and diluted earnings per share (EPS) data for its ordinary shares. Basic EPS
is calculated by dividing the profit or loss attributable to ordinary shareholders of the Company by the
weighted average number of ordinary shares outstanding during the period, adjusted for own shares
held. Diluted EPS is determined by adjusting the profit or loss attributable to ordinary shareholders
and the weighted average number of ordinary shares outstanding, adjusted for own shares held,
for the effects of all dilutive potential ordinary shares, which comprise convertible notes and share
options granted to employees.
2.17 Segment Reporting
An operating segment is a component of the Group that engages in business activities from which it
may earn revenues and incur expenses, including revenues and expenses that relate to transactions
with any of the Group’s other components. All operating segments’ operating results are reviewed
regularly by the Group’s CEO to make decisions about resources to be allocated to the segment and
assess its performance, and for which discrete financial information is available.
3 Property, Plant and Equipment
Leasehold Freehold
land land and Motor Plant and Computer Assets under
Group and buildings buildings vehicles machinery systems Others construction Total
$’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000
Cost/Valuation
At 1 January 2008 6,416 3,621 846 6,444 3,009 2,079 3,075 25,490
Additions - 43 33 143 273 291 12,245 13,028
Transfer - - - 1,555 - - (1,555) -
Disposals and write-off - - (261) (343) - (183) (646) (1,433)
Translation differences on consolidation (229) (162) (2) 13 (9) 4 11 (374)
At 31 December 2008 6,187 3,502 616 7,812 3,273 2,191 13,130 36,711
Additions 47 2 73 162 336 327 8,314 9,261
Surplus on revaluation 4,467 1,391 - - - - - 5,858
Transfer 17,180 - - 3,367 139 571 (21,257) -
Reversal of depreciation on revaluation (780) (151) - - - - - (931)
Disposals and write-off - - (56) (581) (36) (62) - (735)
Translation differences on consolidation (88) 9 (1) 113 (3) (18) (187) (175)
At 31 December 2009 27,013 4,753 632 10,873 3,709 3,009 - 49,989
Accumulated depreciation
and amortisation
harmony in motion
At 1 January 2008 235 68 498 4,316 2,511 1,445 - 9,073
Depreciation and amortisation
for the year 76 44 72 558 334 216 - 1,300
Disposals and write-off - - (158) (343) - (148) - (649)
Translation differences on consolidation (11) (3) (2) (71) (9) (37) - (133)
At 31 December 2008 300 109 410 4,460 2,836 1,476 - 9,591
notestothefinancialstatements
Depreciation and amortisation for the year 484 44 68 673 341 294 - 1,904
Reversal of depreciation on revaluation (780) (151) - - - - - (931)
Disposals and write-off - - (28) (579) (36) (56) - (699)
Translation differences on consolidation (4) (2) - 11 (2) (7) - (4)
At 31 December 2009 - - 450 4,565 3,139 1,707 - 9,861
Carrying amount
At 1 January 2008 6,181 3,553 348 2,128 498 634 3,075 16,417
At 31 December 2008 5,887 3,393 206 3,352 437 715 13,130 27,120
At 31 December 2009 27,013 4,753 182 6,308 570 1,302 - 40,128
annual report 2009
Pteris Global Limited
115
3 Property, Plant and Equipment (cont’d)
116
Leasehold
land Motor Plant and Computer Assets under
Company and buildings vehicles machinery systems Others construction Total
$’000 $’000 $’000 $’000 $’000 $’000 $’000
Valuation
Cost/Valuation
At 1 January 2008 - 777 3,701 2,857 1,220 2,878 11,433
annual report 2009
Additions - 6 26 233 56 12,273 12,594
Pteris Global Limited
Transfer - - 1,555 - - (1,555) -
Disposals and write-off - (261) (343) - (182) (646) (1,432)
At 31 December 2008 - 522 4,939 3,090 1,094 12,950 22,595
Additions 45 23 15 308 194 8,307 8,892
Surplus on revaluation 3,919 - - - - - 3,919
Transfer 17,180 - 3,367 139 571 (21,257) -
Reversal of depreciation on revaluation (409) - - - - - (409)
Disposals and write-off - - (551) (36) (17) - (604)
At 31 December 2009 20,735 545 7,770 3,501 1,842 - 34,393
Accumulated depreciation
At 1 January 2008 - 455 2,967 2,419 1,009 - 6,850
Depreciation for the year - 64 307 296 42 - 709
Disposals and write-off - (158) (343) - (148) - (649)
At 31 December 2008 - 361 2,931 2,715 903 - 6,910
harmony in motion
Depreciation for the year 409 57 467 302 121 - 1,356
Reversal of depreciation on revaluation (409) - - - - - (409)
notestothefinancialstatements
Disposals and write-off - - (549) (36) (17) - (602)
At 31 December 2009 - 418 2,849 2,981 1,007 - 7,255
Carrying amount
At 1 January 2008 - 322 734 438 211 2,878 4,583
At 31 December 2008 - 161 2,008 375 191 12,950 15,685
At 31 December 2009 20,735 127 4,921 520 835 - 27,138
Leasehold land and buildings for the Group include pre-paid leasehold land with a carrying amount of $1,220,000 (2008: $1,254,000) at
31 December 2009.
harmony in motion Pteris Global Limited 117
annual report 2009
notestothefinancialstatements
3 Property, Plant and Equipment (cont’d)
Freehold and leasehold land and buildings held by the wholly-owned subsidiary, Pteris Global Sdn Bhd
were revalued by PA International Property Consultants Sdn Bhd, a firm of independent professional
valuers, at an open market value on an existing use basis as at 31 December 2009. The revaluation
surplus amounting to $1,939,000 (2008: $557,000) was credited to revaluation reserve.
Leasehold building of the Company was revalued by DTZ Debenham Tie Leung (SEA) Pte Ltd, a firm of
independent professional valuers, at an open market value on an existing use basis as at 31 December 2009.
The revaluation surplus amounting to $3,919,000 (2008: NIL) was credited to revaluation reserve.
Had the land and buildings has been carried at cost less accumulated depreciation, their carrying value
would have been as follows:
Group Company
2009 2008 2009 2008
$’000 $’000 $’000 $’000
Leasehold land and buildings 21,023 4,321 16,816 -
Freehold land and buildings 353 358 - -
21,376 4,679 16,816 -
The following property, plant and equipment are pledged as security to secure bank loans:
Group
2009 2008
$’000 $’000
Freehold land 1,269 805
Freehold and leasehold buildings 7,077 6,719
Pre-paid leasehold land 1,220 1,254
9,566 8,778
Assets under construction
Assets under construction comprise the following:
Group Company
2009 2008 2009 2008
$’000 $’000 $’000 $’000
New headquarters in Singapore - 11,214 - 11,214
New factory facilities in Suzhou - 160 - -
New equipment for testing - 1,619 - 1,599
Enterprise resource planning system - 137 - 137
- 13,130 - 12,950
4 Subsidiaries
Company
2009 2008
$’000 $’000
Unquoted equity investments, at cost 12,138 11,357
Impairment losses (4,673) (1,506)
7,465 9,851
Loans to subsidiaries, at cost 10,101 8,677
Impairment of loan receivables (3,285) -
14,281 18,528
Loans to subsidiaries are unsecured, interest-free, and settlement is neither planned nor likely to occur
within the next 12 months. As these loans are, in substance, part of the Company’s net investment in the
subsidiaries, they are stated at cost, less impairment losses.
118 Pteris Global Limited harmony in motion
annual report 2009
notestothefinancialstatements
4 Subsidiaries (cont’d)
Movement in impairment losses of investment in subsidiary:
Company
2009 2008
$’000 $’000
At beginning of the year 1,506 1,506
Impairment losses 3,167 -
At end of the year 4,673 1,506
Due to the economic downturn in Europe during the year, the Group scaled down the operations of its
wholly-owned subsidiary, CDG Systems Limited. As a result, the cost of investment in and the loan to this
subsidiary amounting to $3,167,000 and $3,285,000 were fully impaired in 2009. The impairment charges
were recognised in the income statement.
Details of the subsidiaries are as follows:
Effective
Equity
Country of Interest held
Incorporation by the Group
Name of Subsidiary Note Principal Activities and Business 2009 2008
% %
Inter-Roller Investments (a) Investment holding Singapore 100 100
Pte Ltd
Inter-Roller Engineering (a) Infrastructural engineering Singapore 100 100
Services Pte Ltd and maintenance services
Pteris Pte Ltd (a) Investment holding Singapore 100 100
Pteris Global Sdn Bhd (b) Manufacture of airport Malaysia 100 100
logistics system and
equipment
IR (Middle East) LLC (b) Engineering works United Arab 100 100
Emirates
Pteris Global (Beijing) Ltd (c) Engineering works China 100 100
(formerly known as and after sales services
Inter-Roller Engineering
(Beijing) Co., Ltd)
Pteris Global (Suzhou) (d) Design and manufacture China 100 100
Ltd (formerly known as of airport logistics system
Inter-Roller Airport
Logistics System
(Suzhou) Co., Ltd
CDG Systems Ltd (e) Design and supply of air United 100 100
cargo systems Kingdom
harmony in motion Pteris Global Limited 119
annual report 2009
notestothefinancialstatements
4 Subsidiaries (cont’d)
Effective
Equity
Country of Interest held
Incorporation by the Group
Name of Subsidiary Note Principal Activities and Business 2009 2008
% %
Pteris Global (USA) Inc. (f) Supply and maintenance USA 100 100
of airport logistics system
and equipment
Pteris Global (Canada) Inc. (f) Supply and maintenance Canada 100 100
of airport logistics system
and equipment
(a) Audited by KPMG LLP, Singapore.
(b) Audited by member firms of KPMG International.
(c) Audited by Beijing Run Sheng Jia Hua CPA Firm Ltd.
(d) Audited by Shanghai JiaLiang CPAs Limited.
(e) Audited by Wise and Co., Chartered Accountants and Registered Auditors.
(f) Not required to be audited.
5 Goodwill on Consolidation
Group
$’000
Cost
At 1 January 2008, 31 December 2008 and 31 December 2009 2,835
Accumulated impairment losses
At 1 January 2008 -
Impairment charge during the year 1,335
At 31 December 2008 1,335
Impairment charge during the year 1,500
At 31 December 2009 2,835
Carrying amount
At 1 January 2008 2,835
At 31 December 2008 1,500
At 31 December 2009 -
Goodwill on consolidation represents the excess of the cost of the acquisition over the Group’s interest
in the net fair value of the identifiable assets and liabilities of CDG Systems Limited.
As disclosed in note 4, the operation of CDG Systems Limited was scaled down. Consequently, the
Group has fully impaired the goodwill amount of $1,500,000. The impairment was recognised in the
consolidated income statement.
120 Pteris Global Limited harmony in motion
annual report 2009
notestothefinancialstatements
6 Other Financial Assets
Group Company
2009 2008 2009 2008
$’000 $’000 $’000 $’000
Non-current
Unquoted equity securities, at cost 10 10 10 10
Club memberships, at cost 159 160 150 150
169 170 160 160
Current
Quoted equity securities at fair value
through profit or loss 52 53 - -
Financial derivative assets 1,043 2,271 1,043 2,271
1,095 2,324 1,043 2,271
Financial derivative assets refer to the marked-to-market gain arising from the Group’s outstanding foreign
exchange forward contracts as at balance sheet date which are entered for the purpose of hedging the
Group’s currency exposures.
The Group’s exposure to currency risk is disclosed in note 26.
7 Deferred Tax
Movements in deferred tax assets and liabilities of the Group (prior to offsetting of balances) during the
year are as follows:
Recognised Recognised Recognised
At in income At 31 in income in other At 31
1 January statement Exchange December statement comprehensive Exchange December
2008 (Note 23) differences 2008 (Note 23) income differences 2009
Group $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000
Deferred tax assets
Property, plant and
equipment - - - - 93 - (2) 91
Provisions 612 - - 612 (78) - 14 548
Tax loss carry-forward 98 - 4 102 (13) - (1) 88
Deductible temporary
differences - - - - 439 - 17 456
Other items - - - - 13 - - 13
710 - 4 714 454 - 28 1,196
Deferred tax
liabilities
Property, plant and
equipment (697) 2 12 (683) (499) (811) 26 (1,967)
Other items - - - - (107) - 2 (105)
(697) 2 12 (683) (606) (811) 28 (2,072)
harmony in motion Pteris Global Limited 121
annual report 2009
notestothefinancialstatements
7 Deferred Tax (cont’d)
Recognised Recognised Recognised
At in income At 31 in income in other At 31
1 January statement Exchange December statement comprehensive Exchange December
2008 (Note 23) differences 2008 (Note 23) income differences 2009
Company $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000
Deferred tax assets
Provisions 612 - - 612 (64) - - 548
Deductible temporary
differences - - - - 330 - - 330
Deferred tax
liabilities
Property, plant and
equipment (344) - - (344) (423) (666) - (1,433)
268 - - 268 (157) (666) - (555)
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 the deferred taxes relate to the same tax authority. The
amounts determined after appropriate offsetting are included in the balance sheet as follows:
Group Company
2009 2008 2009 2008
$’000 $’000 $’000 $’000
Deferred tax assets 215 359 - 268
Deferred tax liabilities 1,091 328 555 -
8 Inventories
Group Company
2009 2008 2009 2008
$’000 $’000 $’000 $’000
Raw materials, at cost 2,285 4,360 1,577 3,124
Raw materials recognised in the income statement as material cost amounted to $6,657,000 (2008:
$8,729,000).
122 Pteris Global Limited harmony in motion
annual report 2009
notestothefinancialstatements
9 Contract Work-in-Progress
Group Company
2009 2008 2009 2008
$’000 $’000 $’000 $’000
Costs incurred and attributable profits 345,396 301,282 344,549 283,914
Progress billings (303,147) (257,605) (305,406) (245,377)
Effects of differences in exchange rates
between transaction date
and year end (1,055) (1,674) (1,181) (1,806)
41,194 42,003 37,962 36,731
Presented as:
Contract work-in-progress 45,168 46,168 41,848 40,812
Excess of progress billing over contract
work-in-progress (3,974) (4,165) (3,886) (4,081)
41,194 42,003 37,962 36,731
Percentage of completion of contract work-in-progress
The Group uses the percentage-of-completion method in accounting for its contract revenue where it is
probable that contract costs are recoverable. The stage of completion is measured by reference to the
contract costs incurred to date to the estimated total costs for the contract.
Significant judgement is required to determine the stage of completion, the extent of the contract costs
incurred, the estimated total contract revenue and contract costs, as well as the recoverability of the
contract costs. Total contract revenue also includes an estimation of the variation works and claims that
are recoverable from the customers. In making the judgement, the Group has relied on past experience,
specific events and the work of specialists.
10 Trade and Other Receivables
Group Company
2009 2008 2009 2008
$’000 $’000 $’000 $’000
Trade receivables 13,058 12,923 11,499 10,196
Allowance for doubtful debts (255) - - -
12,803 12,923 11,499 10,196
Retention receivables 5,905 4,108 4,991 3,827
Deposits and prepayments 616 959 222 456
Other receivables 4,542 3,248 3,796 2,830
Amounts due from subsidiaries (trade) - - 6,129 3,733
23,866 21,238 26,637 21,042
Amounts due from subsidiaries are unsecured, interest-free and repayable on demand. There is no
allowance for doubtful debts arising from the outstanding balances.
harmony in motion Pteris Global Limited 123
annual report 2009
notestothefinancialstatements
10 Trade and Other Receivables (cont’d)
The aging of trade receivables, retention receivables, other receivables and amount due from subsidiaries
at the balance sheet date is:
Gross Allowance Gross Allowance
2009 2009 2008 2008
$’000 $’000 $’000 $’000
Group
Not past due 15,326 - 9,388 -
Past due 0 – 30 days 1,311 - 1,472 -
Past due 31 – 120 days 4,443 - 2,038 -
More than 120 days past due 2,425 (255) 7,381 -
23,505 (255) 20,279 -
Company
Not past due 19,412 - 11,863 -
Past due 0 – 30 days 1,128 - 1,150 -
Past due 31 – 120 days 3,979 - 1,595 -
More than 120 days past due 1,896 - 5,978 -
26,415 - 20,586 -
Based on historical default rates, the Group believes that apart from the above, no impairment allowance
is necessary as they relate to customers that have a good record with the Group.
The movement in the allowance for doubtful debts in respect of receivables during the year is as follows:
Group
2009 2008
$’000 $’000
At 1 January - -
Allowance for doubtful debts 255 -
At 31 December 255 -
The Group’s and the Company’s exposure to credit and currency risks is disclosed in note 26.
124 Pteris Global Limited harmony in motion
annual report 2009
notestothefinancialstatements
11 Cash and Cash Equivalents
Group Company
2009 2008 2009 2008
$’000 $’000 $’000 $’000
Cash and bank balances 10,521 8,722 3,955 6,842
Fixed deposits 13,334 9,059 13,334 9,059
Cash and cash equivalents in
the cash flow statement 23,855 17,781 17,289 15,901
The effective interest rates per annum relating to cash and cash equivalents at the balance sheet date
for the Group and Company range from 0.1% to 0.2% (2008: 0.1% to 1.0%). Interest rates reprice at
intervals of one, three or six months.
The Group and Company’s exposure to interest rate risk and a sensitivity analysis for financial assets and
liabilities are disclosed in note 26.
12 Share Capital
Group and Group and
Company Company
2009 2008 2009 2008
No. of No. of
shares shares
’000 ’000 $’000 $’000
Fully paid ordinary shares,
with no par value:
Balance at beginning of year 332,808 332,808 37,427 37,427
Shares issued pursuant to rights issue 133,123 - 17,004 -
Balance at end of year 465,931 332,808 54,431 37,427
The holders of ordinary shares are entitled to receive dividends as declared from time to time and are
entitled to one vote per share at meetings of the Company. All shares rank equally with regard to the
Company’s residual assets.
On 5 November 2009, the Company announced a renounceable rights issue at an issue price of $0.13 per
rights share as the basis of 2 rights share for every 5 existing shares.
On 10 December 2009, the Company allotted and issued 133,123,118 rights shares for a gross consideration
of $17,306,000. After deducting issuing expenses, the net consideration received was $17,004,000.
Capital management
The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a
going concern and to maintain an optimal capital structure so as to maximise shareholders’ value. In
order to maintain or achieve an optimal capital structure, the Group may adjust the amount of dividend
payment, return capital to shareholders, issue new shares, obtain new borrowings or sell assets to reduce
borrowings.
harmony in motion Pteris Global Limited 125
annual report 2009
notestothefinancialstatements
12 Share Capital (cont’d)
Capital management (cont’d)
Management monitors capital based on a net gearing ratio. The Group’s and Company’s strategy is
to maintain an acceptable gearing ratio. The Group’s and Company’s net gearing ratio has thus far not
exceeded 60%.
Net gearing ratio is calculated as net debt divided by shareholders’ equity. Net debt is calculated as
borrowings less cash and cash equivalents.
The Group’s net debt to equity ratio at the end of the reporting period was as follows:
Group
2009 2008
$’000 $’000
Total borrowings 24,204 23,896
Less: Cash and cash equivalents 23,855 17,781
Net debt 349 6,115
Total equity 88,847 67,069
Net debt to equity ratio at 31 December 0.4% 9.1%
There were no changes in the Group’s approach to capital management during the year.
The Company and its subsidiaries are not subject to any material externally imposed capital requirements.
13 Reserves
Group Company
Note 2009 2008 2009 2008
$’000 $’000 $’000 $’000
Revaluation reserve (a) 5,604 557 3,252 -
Foreign currency translation
reserve (b) (875) (350) - -
Statutory reserve (c) 68 68 - -
Share option reserve (d) 490 565 490 565
Hedging reserve (e) 18 518 18 571
Accumulated profits 29,111 28,284 22,395 28,318
34,416 29,642 26,155 29,454
(a) Revaluation reserve arises from the surplus on revaluation of leasehold and freehold land and buildings.
(b) The foreign currency translation reserve comprises:
(i) foreign exchange differences arising from the translation of the financial statements of foreign
operations whose functional currencies are different from the functional currency of the
Company; and
(ii) the exchange differences on monetary items which form part of the Group’s net investment in
foreign operations.
126 Pteris Global Limited harmony in motion
annual report 2009
notestothefinancialstatements
13 Reserves (cont’d)
(c) Statutory reserve comprises profits which have been set aside under the regulations of the countries
in which subsidiaries operate. Statutory reserve is not available for dividend distribution.
(d) Share option reserve comprises the cumulative value of services received from employees for the
issue of employees’ share options.
(e) Hedging reserve comprises the effective portion of the cumulative net change in fair value of cash
flow hedging instruments relating to forecast hedged transactions.
14 Financial Liabilities
Group Company
Note 2009 2008 2009 2008
$’000 $’000 $’000 $’000
Non-current liabilities
Unsecured term loans 5,556 7,778 5,556 7,778
Secured term loans (a) 2,452 3,248 - -
8,008 11,026 5,556 7,778
Current liabilities
Unsecured term loans 2,222 2,222 2,222 2,222
Secured term loans (a) 508 557 - -
Unsecured short-term loans 13,466 10,091 13,057 9,001
Financial derivatives liabilities (b) 467 1,446 467 1,446
16,663 14,316 15,746 12,669
Total financial liabilities 24,671 25,342 21,302 20,447
(a) Secured term loans refer to fixed-rate term loans obtained by the Group’s wholly-owned subsidiary,
Pteris Global Sdn Bhd. The secured term loans are secured by a first and second legal charge over
the Group’s land and buildings in Malaysia and continuing corporate guarantee from the Company.
(b) Financial derivatives liabilities refer to the marked-to-market losses arising from the Group’s
outstanding foreign exchange forward contracts as at balance sheet date which are entered for the
purpose of hedging its foreign currency exposures.
harmony in motion Pteris Global Limited 127
annual report 2009
notestothefinancialstatements
14 Financial Liabilities (cont’d)
Terms and debt repayment schedule
Terms and conditions of outstanding loans and borrowings are as follows:
Nominal Year of Face Carrying Face Carrying
interest rate maturity value amount value amount
$’000 $’000 $’000 $’000
Group
S$ floating rate Cost of fund +
term loan credit spread 2009 - 2013 7,778 7,778 10,000 10,000
MYR fixed rate
term loans 7.35% 2013 - 2015 2,960 2,960 3,805 3,805
S$ floating rate
short-term Cost of fund +
loans credit spread 2009 - 2010 13,057 13,057 10,091 10,091
MYR floating rate Bank base
short-term lending rate +
loan cost of fund 2009 - 2010 409 409 - -
24,204 24,204 23,896 23,896
Company
S$ floating rate Cost of fund +
term loan credit spread 2009 - 2013 7,778 7,778 10,000 10,000
S$ floating rate
short-term Cost of fund +
loans credit spread 2009 - 2010 13,057 13,057 9,001 9,001
20,835 20,835 19,001 19,001
15 Trade and Other Payables
Group Company
2009 2008 2009 2008
$’000 $’000 $’000 $’000
Trade payables 11,330 11,532 8,215 9,480
Accruals and other payables 4,603 6,512 3,441 5,674
Amount due to subsidiaries (trade) - - 4,289 1,976
Amount due to a subsidiary (non-trade) - - 5,578 5,588
15,933 18,044 21,523 22,718
Outstanding balances with subsidiaries are unsecured, interest-free and are repayable on demand.
The Group’s and the Company’s exposure to currency and liquidity risk is disclosed in note 26.
128 Pteris Global Limited harmony in motion
annual report 2009
notestothefinancialstatements
16 Provision for Warranties
Group Company
2009 2008 2009 2008
$’000 $’000 $’000 $’000
At 1 January 2,998 2,867 2,998 2,867
Provision utilised (2,051) (1,639) (2,051) (1,639)
Allowance made 1,772 1,770 1,772 1,770
Provision reversed (645) - (645) -
At 31 December 2,074 2,998 2,074 2,998
Provision for warranties
Provision for warranties is made in respect of defect liabilities and claims from owners and/or main
contractors against the Group. The provision is based on management’s expectation and estimates of
claims arising, using past experience and complexity of work performed as a guide. When the final
outcomes of such warranty claims are known, adjustments are made when the provisions are inadequate
or excessive. The Group expects to incur the liability over the defect liability period of up to two years.
17 Revenue
Revenue represents the total contract value of completed jobs and net additions to or deductions from
work-in-progress for the year and services at invoiced value less discounts and returns. Revenue excludes
applicable goods and services tax.
Revenue of the Group excludes sales between Group companies.
18 Other Income
Group
2009 2008
$’000 $’000
Dividend income 93 46
Gain on sale of asset held for sale - 2,514
Interest income 31 77
Others 490 146
614 2,783
19 Staff Costs
Group
2009 2008
$’000 $’000
Wages and salaries 17,039 17,726
Contributions to defined contribution plan 1,173 1,305
Other benefits 1,273 1,557
Share-based payment expense 49 56
Jobs credit scheme (638) -
18,896 20,644
harmony in motion Pteris Global Limited 129
annual report 2009
notestothefinancialstatements
19 Staff Costs (cont’d)
Share-based payment expense
Share-based payment expense refers to expenses arising from the grant of employees’ share options.
The Inter-Roller Executives’ Share Option Scheme 2001 (the “Scheme”) was approved by shareholders
at an Extraordinary General Meeting of the Company held on 25 May 2001. The Scheme is administered
by the Nomination and Remuneration Committee.
Movements in the number of share options and their related weighted average exercise prices held by
executive directors and employees are as follows:
Weighted Weighted
average Number average Number
exercise price of options exercise price of options
$ ’000 $ ’000
Outstanding options at beginning of year 0.52 4,235 0.79 3,075
Options granted - - 0.18 1,860
Adjustment arising from rights issue - 558 - -
Options forfeited/lapsed 0.19 (766) 0.79 (700)
Outstanding options at end of year 0.44 4,027 0.53 4,235
Exercisable at year end 0.44 4,027 0.78 2,425
No options were granted in 2009 (2008: 1,860,000). There were no options exercised in 2009 (2008: NIL).
Adjustment arising from rights issue
On 5 November 2009, all the unexercised share options granted under the Scheme was adjusted
(“Adjustment”) to compensate for the decline in fair value of the share options due to the rights issue
on 5 November 2009. Adjustments took effect from 16 November 2009. As a result, the number of
unexercised share options as at 5 November 2009 was increased by 558,288. Additional information on
the Scheme can be found in the Directors’ Report.
The fair value of share options as at the date of grant is estimated by using a binomial model, taking into
account the terms and conditions upon which the options were granted. The inputs to the model used in
the measurement of the fair value at grant date of the share-based payment plans are shown below.
19 September
Date of grant of options 2008
Weighted average share price $0.17
Weighted average exercise price $0.18
Implied volatility 52.9%
Expected option life (years) 4.5
Risk-free interest rate 3.0%
Expected dividend yield 18.4%
Fair value at measurement date $0.04
The expected life of the options granted in 2008 is based on the assumption that the options would be
exercised at an average of 4.5 years after the vesting date and is not necessarily indicative of exercise
patterns that may occur. The implied volatility reflects the assumption that the historical volatility is
indicative of future trends, which may not necessarily be the actual outcome. No other feature of the
option grant was incorporated into the measurement of fair value.
130 Pteris Global Limited harmony in motion
annual report 2009
notestothefinancialstatements
20 Foreign Exchange Differences and Hedging Cost
Group
2009 2008
$’000 $’000
Net foreign exchange gain (779) (20)
Hedging cost 377 1,972
(402) 1,952
Hedging cost relates to cost incurred by the Group with respect to foreign exchange forward contracts
entered for the purpose of hedging its foreign currency risk exposures. These costs arose from interest
rate differentials between SGD and the currencies which were being hedged (primarily USD) as at the
date of entry of forward contracts and as at the balance sheet date.
21 Other Operating Expenses
Group
2009 2008
$’000 $’000
Non-audit fee paid/payable to auditors of the Company 3 4
Administrative expenses 6,574 6,925
Loss on disposal of property, plant and equipment 31 -
Allowance for doubtful debts 255 -
Property, plant and equipment written off 5 646
Operating lease expense 1,581 1,310
8,449 8,885
22 Finance Expense
Group
2009 2008
$’000 $’000
Bank borrowings
- Short-term 427 296
- Long-term 369 250
Others 21 26
817 572
harmony in motion Pteris Global Limited 131
annual report 2009
notestothefinancialstatements
23 Income Tax Expense
Group
2009 2008
$’000 $’000
Current tax expense
- Current year 416 666
- Overprovision in prior years (2,573) (180)
(2,157) 486
Deferred tax expense
- Movements in temporary differences 90 (343)
- Changes in tax rate 6 (16)
- Underprovision in prior years 56 357
152 (2)
(2,005) 484
Reconciliation of effective tax rate
Loss before income tax (1,302) (2,568)
Income tax at 17% (2008: 18%) (221) (462)
Effect of tax rates in foreign jurisdictions 464 (119)
Expenses not deductible for tax purposes 404 1,095
Income not subjected to tax (232) (365)
Deferred tax benefits not recognised 85 -
Effect of changes in tax rate 6 (16)
(Over)/Underprovision in prior years
- current tax (2,573) (180)
- deferred tax 56 357
Others 6 174
(2,005) 484
The Singapore corporate tax rate has been reduced from 18% to 17% with effect from 22 January 2009
for the Year of Assessment 2010.
24 Earnings/(Loss) Per Share
Group
2009 2008
Basic earnings/(loss) per share $’000 $’000
Basic earnings/(loss) per share is based on:
Net profit/(loss) attributable to ordinary shareholders 703 (3,052)
Group
Number of shares
2009 2008
’000 ’000
Number of ordinary shares outstanding at the beginning of the year 332,808 332,808
Adjustment for rights issue 24,302 47,207
Restated weighted average number of ordinary shares 357,110 380,015
Effects of rights issue 28,083 -
Weighted average number of ordinary shares at the end of the year 385,193 380,015
132 Pteris Global Limited harmony in motion
annual report 2009
notestothefinancialstatements
24 Earnings/(Loss) Per Share (cont’d)
Group
2009 2008
Diluted earnings/(loss) per share $’000 $’000
Diluted earnings/(loss) per share is based on:
Net profit/(loss) attributable to ordinary shareholders 703 (3,052)
The effect of the exercise of share options on the weighted average number of ordinary shares in issue
is as follows:
Group
Number of shares
2009 2008
’000 ’000
Weighted average number of ordinary shares used in calculation
of basic earnings per share 385,193 380,015
Weighted average number of dilutive potential ordinary shares
issuable under share options 107 53
Weighted average number of ordinary issued and potential shares
assuming full conversion 385,300 380,068
For the purpose of calculation of the diluted earnings/(loss) per ordinary share, the weighted average
number of ordinary shares in issue during the year is adjusted to take into account the dilutive effect arising
from the dilutive share options, with the potential ordinary shares weighted for the period outstanding.
25 Operating Segments
The Group has one reportable segment relating to the provision of engineering and computer software
solutions of airport logistics and material handling. The Group’s Chief Executive Officer (“CEO”) manages
and monitors the Group’s business as a whole and reviews the internal managment report at least on a
quarterly basis. The accounting policies of the reportable segment are the same as described in note 2.
Performance is measured based on earnings before interest, tax, depreciation and amortisation (“adjusted
EBITDA”). This measurement basis excludes the offsets of expenditure from operating segment such as
impairment of goodwill on consolidation that is not expected to recur regularly in every period. Information
regarding the results of the reportable segment is included below.
Adjusted EBITDA is used to measure performance as management believes that such information is the
most relevant in evaluating the results of the operating segment.
harmony in motion Pteris Global Limited 133
annual report 2009
notestothefinancialstatements
25 Operating Segments (cont’d)
Reconciliations of reportable segment revenues, profit or loss, assets and liabilities
2009 2008
$’000 $’000
Revenue
Total revenue for the reportable segment/consolidated revenue 87,296 75,945
Profit or loss
Adjusted EBITDA for the reportable segment 2,919 639
Depreciation and amortisation (1,904) (1,300)
Finance expense (817) (572)
Impairment in goodwill on consolidation (1,500) (1,335)
Consolidated loss before income tax (1,302) (2,568)
Assets
Total assets for the reportable segment 136,781 119,520
Other unallocated amounts - 1,500
Consolidated total assets 136,781 121,020
Liabilities
Total liabilities for the reportable segment/consolidated total liabilities 47,934 53,951
Geographical segments
The Group operates from its facilities in Singapore, Malaysia, Middle East, China, United States of America
and United Kingdom.
In presenting information on the basis of geographical segments, segment revenue is based on the
geographical location of facilities. Segment assets are based on the geographical location of the assets.
Geographical information
2009 2008
$’000 $’000
Revenue
Singapore 81,062 68,694
Malaysia 9,091 6,242
Middle East 5,022 2,999
China 9,559 7,980
United States of America 9,503 -
Other countries 461 4,818
Elimination of geographical inter-segment revenue (27,402) (14,788)
87,296 75,945
134 Pteris Global Limited harmony in motion
annual report 2009
notestothefinancialstatements
25 Operating Segments (cont’d)
Geographical information (cont’d)
2009 2008
$’000 $’000
Non-current assets
Singapore 27,375 16,080
Malaysia 12,306 10,801
Middle East 110 28
China 707 711
United States of America 14 -
Other countries - 29
Other unallocated amounts - 1,500
40,512 29,149
26 Financial Risk Management
Overview
Risk management is integral to the whole business of the Group. The management continually monitors
the Group’s risk management process to ensure that an appropriate balance between risk and control
is achieved. Risk management policies and systems are reviewed regularly to reflect changes in market
conditions and the Group’s activities.
The Audit Committee oversees how management monitors compliance with the Group’s risk management
policies and procedures and reviews the adequacy of the risk management framework in relation to the
risks faced by the Group. The Audit Committee is assisted in its oversight role by Internal Audit. Internal
Audit undertakes both regular and ad hoc reviews of risk management controls and procedures, the
results of which are reported to the Audit Committee.
Credit risk
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument
fails to meet its contractual obligations, and arises principally from the Group’s receivables from customers
and investment securities.
Revenue from one customer of the Group represent approximately 19% (2008: 13%) of the
Group’s total revenue. As the Group’s customer base is mostly airport authorities, airlines or
reputable business partners, the exposure to credit risks is limited. Notwithstanding, management
closely monitors all outstanding debts and reviews the recoverability of receivables periodically
to ascertain debt collectibility. Whenever possible, securities, such as Letter of Credits and Standby
Letter of Credits, are sought from customers. The Group maintains its cash balances only with
reputable banks.
The Group’s historical experience in the collection of accounts receivable falls within the recorded
allowances. Due to these factors, management believes that no additional credit risk beyond amounts
provided for collection losses is inherent in the Group’s trade receivables.
harmony in motion Pteris Global Limited 135
annual report 2009
notestothefinancialstatements
26 Financial Risk Management (cont’d)
Credit risk (cont’d)
The maximum exposure to credit risk for trade receivables and retention receivables at the balance sheet
date by customers are as follows:
Group Company
2009 2008 2009 2008
$’000 $’000 $’000 $’000
Airport authorities and large corporations 18,120 16,136 16,380 13,765
Others 843 895 110 258
18,963 17,031 16,490 14,023
Liquidity risk
Liquidity risk is the risk that the Group will encounter difficulty in meeting the obligations associated with
its financial liabilities that are settled by delivering cash or another financial asset. The Group’s approach
to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its
liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or
risking damage to the Group’s reputation.
The Group actively monitors its cash flow position to ensure sufficient liquidity and flexibility in terms
of cash and credit facilities to meet its short-term obligations. Over the years, the management has
broadened and deepened its relationships with a core group of bankers in order to prevent over reliance
on any single banker and to ensure adequate support for investments and operations both in Singapore
and outside of Singapore. The Group conducts its banking activities with the positive manner to ensure
that it continues to receive good credit standings with its bankers. The Group also ensures that there are
always unutilised credit facilities which may be drawn down when the need arises to meet its working
capital requirements.
136 Pteris Global Limited harmony in motion
annual report 2009
notestothefinancialstatements
26 Financial Risk Management (cont’d)
Liquidity risk (cont’d)
The tables below analyse the maturity profile of the Group’s and Company’s financial liabilities (excluding
excess of progress billings over contract work-in-progress), including estimated interest payments and
excluding the impact of netting arrangements.
Carrying Contractual Less than Between Between
amount cash flows 1 year 1 and 2 years 2 and 5 years
Group $’000 $’000 $’000 $’000 $’000
2009
Non-derivative financial
liabilities
Borrowings 24,204 25,270 16,695 6,149 2,426
Trade and other payables 15,933 15,933 15,933 - -
Recognised financial
liabilities 40,137 41,203 32,628 6,149 2,426
Derivative financial
liabilities
Gross-settled foreign
exchange forward
contracts
- outflow 60,155 59,999 59,999 - -
- inflow (60,731) (60,731) (60,731) - -
(576) (732) (732) - -
39,561 40,471 31,896 6,149 2,426
Carrying Contractual Less than Between Between More than
amount cash flows 1 year 1 and 2 years 2 and 5 years 5 years
Group $’000 $’000 $’000 $’000 $’000 $’000
2008
Non-derivative
financial
liabilities
Borrowings 23,896 25,507 13,427 6,423 5,635 22
Trade and other
payables 18,044 18,044 18,044 - - -
Recognised
financial
liabilities 41,940 43,551 31,471 6,423 5,635 22
Derivative
financial
liabilities
Gross-settled
foreign
exchange
forward
contracts
- outflow 86,389 86,500 86,500 - - -
- inflow (87,214) (87,214) (87,214) - - -
(825) (714) (714) - - -
41,115 42,837 30,757 6,423 5,635 22
harmony in motion Pteris Global Limited 137
annual report 2009
notestothefinancialstatements
26 Financial Risk Management (cont’d)
Liquidity risk (cont’d)
Carrying Contractual Less than Between Between
amount cash flows 1 year 1 and 2 years 2 and 5 years
Company $’000 $’000 $’000 $’000 $’000
2009
Non-derivative
financial
liabilities
Borrowings 20,835 21,339 15,543 4,672 1,124
Trade and other
payables 21,523 21,523 21,523 - -
Recognised
financial
liabilities 42,358 42,862 37,066 4,672 1,124
Intra-group
guarantee - 3,931 3,931 - -
42,358 46,793 40,997 4,672 1,124
Derivative
financial
liabilities
Gross-settled
foreign
exchange
forward
contracts
- outflow 60,155 59,999 59,999 - -
- inflow (60,731) (60,731) (60,731) - -
(576) (732) (732) - -
41,782 46,061 40,265 4,672 1,124
138 Pteris Global Limited harmony in motion
annual report 2009
notestothefinancialstatements
26 Financial Risk Management (cont’d)
Liquidity risk (cont’d)
Carrying Contractual Less than Between Between
amount cash flows 1 year 1 and 2 years 2 and 5 years
Company $’000 $’000 $’000 $’000 $’000
2008
Non-derivative
financial
liabilities
Borrowings 19,001 19,747 11,522 4,802 3,423
Trade and other
payables 22,718 22,718 22,718 - -
Recognised
financial
liabilities 41,719 42,465 34,240 4,802 3,423
Intra-group
guarantee - 1,095 1,095 - -
41,719 43,560 35,335 4,802 3,423
Derivative
financial
liabilities
Gross-settled
foreign
exchange
forward
contracts
- outflow 86,389 86,500 86,500 - -
- inflow (87,214) (87,214) (87,214) - -
(825) (714) (714) - -
40,894 42,846 34,621 4,802 3,423
It is not expected that the cash flows included in the maturity analysis could occur significantly earlier, or
at significantly different amounts.
Interest rate risk
The Group’s exposure to interest rate risk arises primarily from short-term loans which are drawn down
as and when the need arises. The Group also has an unsecured outstanding long-term loan of $7,778,000
(2008: $10,000,000) which is repriced quarterly. Such loans attract interest rates at the prevailing market
rate when the loans were drawn down or repriced. The Group does not hedge its interest rate risk.
However, continuous monitoring is undertaken to evaluate this risk.
harmony in motion Pteris Global Limited 139
annual report 2009
notestothefinancialstatements
26 Financial Risk Management (cont’d)
Interest rate risk (cont’d)
Sensitivity analysis
This analysis assumes that all other variables, in particular foreign currency rates, remain constant. The
analysis is performed on the same basis for 2008.
Profit before tax
1% 1%
increase decrease
Group $’000 $’000
2009
Fixed deposits 133 (133)
Borrowings (212) 212
(79) 79
2008
Fixed deposits 91 (91)
Borrowings (201) 201
(110) 110
Foreign currency risk
The Group is exposed to foreign currency risk arising primarily on sales and purchases that are denominated
in currencies other than the various functional currencies of Group entities. The currencies giving rise
to this risk are primarily the United States dollar (USD) and Canadian dollar (CAD). Other USD pegged
currencies such as United Arab Emirates Dirham (AED) and Qatar Riyals (QAR) are also subjected to USD
foreign exchange risk. Movements in their exchange rates against the Singapore dollar could result in the
Group incurring foreign exchange losses/gains.
The Group recognises that any significant fluctuations in the USD and CAD may affect the Group’s foreign
currency risk. As a result, the Group actively monitors its exposures and uses foreign exchange forward
contracts to hedge against these exposures. USD is also used as a proxy currency to hedge exposures
against AED and QAR.
In view of the nature of the Group’s business which spans several countries, foreign exchange risks will
continue to be an integral aspect of the Group’s risk profile in the future.
At 31 December, the Group and the Company have outstanding forward exchange contracts with a total
notional amount of approximately $61 million (2008: $87 million).
140 Pteris Global Limited harmony in motion
annual report 2009
notestothefinancialstatements
26 Financial Risk Management (cont’d)
Foreign currency risk (cont’d)
Exposure to currency risk
The Group’s and Company’s exposures to foreign currency are as follows:
USD AED QAR CAD
Group $’000 $’000 $’000 $’000
2009
Cash and cash equivalents 3,924 698 - 2,051
Trade and other receivables 5,982 82 13 1,140
Trade and other payables (2,185) (218) (375) (1,276)
Contract work-in-progress 1,469 12,222 299 7,847
Net currency exposure before hedging instruments 9,190 12,784 (63) 9,762
Currency forwards – not designated as cash flow hedges (38,659) - - (4,817)
Currency forwards – designated as cash flow hedges (10,125) - - (1,518)
Net currency affecting balance sheet (39,594) 12,784 (63) 3,427
Forecast transaction in foreign currencies 17,574 16,978 17,511 3,408
Net currency exposure (22,020) 29,762 17,448 6,835
2008
Cash and cash equivalents 6,550 1,659 - 816
Trade and other receivables 10,066 248 315 -
Trade and other payables (804) (6) - 1
Contract work-in-progress 2,057 19,415 (933) 4,358
Net currency exposure before hedging instruments 17,869 21,316 (618) 5,175
Currency forwards – not designated as cash flow hedges (46,371) - - (1,613)
Currency forwards – designated as cash flow hedges (24,142) - - (7,539)
Net currency affecting balance sheet (52,644) 21,316 (618) (3,977)
Forecast transaction in foreign currencies 12,422 19,780 19,390 20,791
Net currency exposure (40,222) 41,096 18,772 16,814
Company
2009
Cash and cash equivalents 821 23 - 2,040
Trade and other receivables 5,982 64 13 1,140
Trade and other payables (363) 7 (375) (1,275)
Contract work-in-progress 56 12,222 299 7,847
Net currency exposure before hedging instruments 6,496 12,316 (63) 9,752
Currency forwards – not designated as cash flow hedges (38,659) - - (4,817)
Currency forwards – designated as cash flow hedges (10,125) - - (1,518)
Net currency affecting balance sheet (42,288) 12,316 (63) 3,417
Forecast transaction in foreign currencies 12,047 16,978 17,511 3,408
Net currency exposure (30,241) 29,294 17,448 6,825
2008
Cash and cash equivalents 6,550 1,264 - 816
Trade and other receivables 10,066 213 315 -
Trade and other payables (804) (6) - 1
Contract work-in-progress 1,938 17,589 (933) 3,565
Net currency exposure before hedging instruments 17,750 19,060 (618) 4,382
Currency forwards – not designated as cash flow hedges ( 46,371) - - (1,613)
Currency forwards – designated as cash flow hedges (24,142) - - (7,539)
Net currency affecting balance sheet (52,763) 19,060 (618) (4,770)
Forecast transaction in foreign currencies 12,422 19,780 19,390 20,791
Net currency exposure (40,341) 38,840 18,772 16,021
harmony in motion Pteris Global Limited 141
annual report 2009
notestothefinancialstatements
26 Financial Risk Management (cont’d)
Foreign currency risk (cont’d)
Sensitivity analysis
The table below shows the effects on the Group’s and the Company’s equity and income statements if
the Singapore dollar (SGD) weakens by 5% against the USD, AED ,QAR and CAD. This analysis is based
on foreign currency exchange rate variables that the Group considered to be reasonably possible at the
end of the reporting period. This analysis assumes that all other variables, in particular interest rates,
remain constant.
The analysis is performed on the same basis for 2008, albeit that the reasonably possible foreign exchange
rate variables were different, as indicated below:
Group Company
Equity Profit/(Loss) Equity Profit/(Loss)
before tax before tax
$’000 $’000 $’000 $’000
31 December 2009
USD (506) (1,473) (506) (1,608)
AED - 639 - 616
QAR - (3) - (3)
CAD (76) 247 (76) 247
31 December 2008
USD (1,207) (1,425) (1,207) (1,431)
AED - 1,066 - 953
QAR - (31) - (31)
CAD (377) 178 (377) 138
A 5% strengthening of the SGD against the above currencies would have had the equal but opposite
effect on the amounts shown above, on the basis that all other variables remain constant.
Estimation of fair values
The following summarises the significant methods and assumptions used in estimating the fair values of
financial instruments of the Group and Company.
Derivatives
The fair value of foreign exchange forward contracts is estimated by applying the spot rate as at the date
of the balance sheet and adjusted against forward swap points provided by the Group’s bankers.
Investment in equity securities
The Group does not have significant investments in equity securities.
142 Pteris Global Limited harmony in motion
annual report 2009
notestothefinancialstatements
26 Financial Risk Management (cont’d)
Fair value hierarchy
The table below analyses financial instruments carried at fair value, by valuation method. The different
levels have been defined as follows:
• Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities
• Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or
liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices)
• Level 3: inputs for the asset or liability that are not based on observable market data (unobservable
inputs).
Level 1 Level 2 Level 3 Total
$’000 $’000 $’000 $’000
Group
31 December 2009
Quoted equity securities at
fair value through profit or loss 52 - - 52
Financial derivative assets - 1,043 - 1,043
52 1,043 - 1,095
Financial derivative liabilities - (467) - (467)
52 576 - 628
31 December 2008
Quoted equity securities at fair value
through profit or loss 53 - - 53
Financial derivative assets - 2,271 - 2,271
53 2,271 - 2,324
Financial derivative liabilities - (1,446) - (1,446)
53 825 - 878
Company
31 December 2009
Financial derivative assets - 1,043 - 1,043
Financial derivative liabilities - (467) - (467)
- 576 - 576
31 December 2008
Financial derivative assets - 2,271 - 2,271
Financial derivative liabilities - (1,446) - (1,446)
- 825 - 825
Other financial assets and liabilities
The carrying amounts of financial assets and liabilities with a maturity of less than one year (including
trade and other receivables, cash and cash equivalents, and trade and other payables) are assumed
to approximate their fair values because of the short period to maturity. All other financial assets and
liabilities are discounted to determine their fair values.
harmony in motion Pteris Global Limited 143
annual report 2009
notestothefinancialstatements
27 Commitments
Capital commitments
Group and Company
2009 2008
$’000 $’000
Expenditure contracted for the aquisition of property, plant and equipment 19 7,200
Operating lease commitments
At the balance sheet date, the Group and the Company were committed to making payments under non-
cancellable leases for its industrial lands with a term of more than one year as follows:
Group Company
2009 2008 2009 2008
$’000 $’000 $’000 $’000
Not later than one year 1,124 1,947 870 1,352
Later than one year but not later than five years 2,036 2,415 2,036 2,317
Later than five years 9,605 8,857 9,605 8,857
The lease on the industrial land at 28 Quality Road on which rentals are payable will expire on 31 May
2037 with an option to renew for another 30 years for the Company’s industrial land use subject to
the Company meeting certain investment criteria within the license period. The current monthly rent
payable is approximately $37,000, and is subject to revision on renewal. None of these leases include
contingent rentals.
28 Related Parties
Transactions with directors and other key management personnel
Key management personnel of the Group are those persons having the authority and responsibility for
planning, directing and controlling the activities of the Group. The directors and senior managers of the
management team are considered as key management of the Group.
Key management personnel compensation comprise remuneration of directors and other key management
personnel as follows:
Group
2009 2008
$’000 $’000
Directors’ fees 296 318
Short-term employee benefits 1,811 1,865
Post employment benefits including CPF 90 84
Share-based payments 22 22
Total costs incurred by the Group 2,219 2,289
Cost incurred for the following categories of key management are:
Directors of the Company 951 1,049
Other key management personnel 1,268 1,240
Total costs incurred by the Group 2,219 2,289
144 Pteris Global Limited harmony in motion
annual report 2009
notestothefinancialstatements
28 Related Parties (cont’d)
Other related party transactions
For the purpose of these financial statements, parties are considered to be related to the Group if the
Group has the ability, directly or indirectly, to control the party or exercise significant influence over the
party in making financial and operating decisions, or vice versa, where the Group and the party are subject
to common control or common significant influence. Related parties may be individuals or other entities.
During the financial year, the significant transactions with related parties, based on terms agreed by the
parties, were as follows:
Group Company
2009 2008 2009 2008
$’000 $’000 $’000 $’000
(a) Fee paid to a firm in which
a director is a member - 72 - 72
(b) Works subcontracted to subsidiaries - - 16,773 13,428
(c) Sales to subsidiaries - - 11,175 10,604
(d) Rental expense paid to a subsidiary - - - 78
29 New Accounting Standards and Interpretations Not Yet Adopted
The Group has not applied the following accounting standards and interpretations that have been issued
as of 31 December 2009 but are not yet effective:
FRS 27 (revised) Consolidated and Separate Financial Statements
FRS 101 (revised) First-time adoption of FRS (improved structure)
FRS 103 (revised) Business Combinations
Amendments to FRS 39 Financial Instruments: Recognition and Measurement -Eligible
Hedged Items
INT FRS 117 Distributions of Non-cash Assets to Owners
INT FRS 118 Transfer of Assets from Customers
Improvements to FRSs 2009 Improvements to FRSs 2009
Management is currently assessing the initial application of these standards and interpretations.
The Group has not considered the impact of accounting standards issued after 31 December 2009.
harmony in motion Pteris Global Limited 145
annual report 2009
statisticsofshareholdings
As at 19 March 2010
Distribution of shareholdings
Size of Shareholdings No. of Shareholders % No. of Shares %
1 - 999 253 6.30 39,088 0.01
1,000 - 10,000 1,333 33.22 8,554,324 1.84
10,001 - 1,000,000 2,385 59.43 162,300,340 34.82
1,000,001 and above 42 1.05 295,180,463 63.33
Total 4,013 100.00 466,074,215 100.00
List of 20 largest shareholders
No. Name No. of Shares %
1 Hong Leong Finance Nominees PL 53,069,600 11.39
2 DBS Nominees Pte Ltd 32,195,380 6.91
3 Low Kok Hua 25,048,160 5.37
4 DB Nominees (S) Pte Ltd 24,881,732 5.34
5 Merrill Lynch (S'pore) P L 22,738,400 4.88
6 UOB Nominees (2006) Pte Ltd 17,500,000 3.75
7 Citibank Noms S'pore Pte Ltd 14,018,913 3.01
8 Chan Mei Lin Pearly 13,570,000 2.91
9 United Overseas Bank Nominees 10,428,512 2.24
10 Lim Yong Wah 7,748,081 1.66
11 Phillip Securities Pte Ltd 6,477,164 1.39
12 Lee Dorcas 5,712,000 1.23
13 Sng Hee Kwee 5,700,940 1.22
14 HSBC (Singapore) Noms Pte Ltd 5,517,120 1.18
15 Koh Jimmy 4,585,760 0.98
16 UOB Kay Hian Pte Ltd 3,751,224 0.80
17 Ang Loo Ting Sharon 3,500,000 0.75
18 Sng Teck Kong 2,369,000 0.51
19 DBS Vickers Secs (S) Pte Ltd 2,158,400 0.46
20 Mak Seng Fook 2,142,000 0.46
Total 263,112,386 56.44
Substantial Shareholders
Direct Interest Deemed Interest
Substantial Shareholders No. of Shares % No. of Shares %
Low Kok Hua 50,948,160 10.94 235,200 0.05
Winmark Investments Pte Ltd 40,195,400 8.63 - -
Winston Tan Tien Hin 1 1,400,000 0.30 40,195,400 8.63
Deutsche Bank AG 30,147,000 6.47 - -
Total 122,690,560 26.34 40,430,600 8.68
1
Winston Tan Tien Hin is deemed to have an interest in the 40,195,400 shares held by Winmark Investments
Pte Ltd by virtue of Section 7 of the Companies Act, Chapter 50
Public Shareholdings
Based on the information available to the Company as at 19 March 2010, approximately 63.38% of the
Company’s ordinary shares are held in the hands of the public. This is in compliance with Rule 723 of the SGX
Listing Manual.
146 Pteris Global Limited harmony in motion
annual report 2009
sharetransactionsstatistics
SHARE PRICE CHART
Share Price
(S$) 0.30
0.25
0.20
0.15
0.10
0.05
0.00
Jan Feb Mar April May June July Aug Sept Oct Nov Dec
High Low Average
AVERAGE DAILY TRADING VOLUME CHART
25,000,000
20,000,000
15,000,000
10,000,000
5,000,000
0
Jan Feb Mar April May June July Aug Sept Oct Nov Dec
harmony in motion Pteris Global Limited 147
annual report 2009
noticeofagm
PTERIS GLOBAL LIMITED
(Incorporated in the Republic of Singapore)
Registration No. 197900230M
NOTICE OF ANNUAL GENERAL MEETING
NOTICE IS HEREBY GIVEN that the Annual General Meeting of Pteris Global Limited will be held at 28 Quality
Road, Singapore 618828 on 27 April 2010, Tuesday at 3.00 pm for the following purposes:
AS ORDINARY BUSINESS
To consider and, if thought fit, to pass the following resolutions as Ordinary Resolutions, with or without any
modifications:
1 To receive and adopt the Audited Financial Statements for the financial year ended 31 December 2009
together with the Directors’ Report and Auditors’ Report thereon.
(Resolution 1)
2 To approve the proposed Directors’ Fees of S$296,062 (2008: $318,098) for the financial year ended
31 December 2009.
(Resolution 2)
3 To re-elect Mr Tan Guong Ching who is retiring under Article 107 of the Company’s Articles of Association.
(Resolution 3)
4 To re-elect Mr Loh Chin Hua who is retiring under Article 107 of the Company’s Articles of Association.
(Resolution 4)
He will be considered independent for the purpose of Rule 704(8) of the Listing Manual of the
Singapore Exchange Securities Trading Limited. Mr Loh Chin Hua will, upon re-election as a Director
of the Company, remain as a member of the Audit Committee, and a member of the Nominating and
Remuneration Committee.
5 To re-elect Mr Oon Chong Howe who is retiring under Article 107 of the Company’s Articles of
Association.
(Resolution 5)
Mr Oon Chong Howe is an Executive Director of the Company. Resolution 5, as set out above, if passed,
will re-elect him as Director of the Company.
6 To re-appoint Mr Haider M. Sithawalla as Director under Section 153(6) of the Companies Act (Chapter 50).
(Resolution 6)
`
He will be considered independent for the purpose of Rule 704(8) of the Listing Manual of the Singapore
Exchange Securities Trading Limited. Mr Haider M. Sithawalla will, upon re-appointment as a Director of
the Company, remains as the member of the Audit Committee, and the Chairman of the Nominating and
Remuneration Committee.
7 To re-appoint KPMG LLP as auditors of the Company until the next Annual General Meeting and to
authorize the Directors to fix their remuneration.
(Resolution 7)
148 Pteris Global Limited harmony in motion
annual report 2009
noticeofagm
AS SPECIAL BUSINESS
To consider, and if thought fit, to pass the following resolutions as Ordinary Resolutions, with or without
modifications:
8 Authority to allot and issue shares
That, pursuant to Section 161 of the Companies Act, Cap. 50 and the rules, guidelines and measures
issued by the Singapore Exchange Securities Trading Limited (“SGX-ST”), authority be and is hereby
given to the Directors of the Company to issue:
(i) shares in the capital of the Company (“shares”); or
(ii) convertible securities; or
(iii) additional convertible securities issued pursuant to adjustments; or
(iv) shares arising from the conversion of the securities in (ii) and (iii) above,
(whether by way of rights, bonus or otherwise or in pursuance of any offer, agreement or option made
or granted by the Directors during the continuance of this authority or thereafter) at any time and upon
such terms and conditions and for such purposes and to such persons as the Directors may in their
absolute discretion deem fit (notwithstanding the authority conferred by this Resolution may have
ceased to be in force),
provided that
1) the aggregate number of shares to be issued pursuant to this Resolution (including shares to be
issued in pursuance of convertible securities made or granted pursuant to this Resolution) does
not exceed fifty per cent (50%) of the total number of issued shares (excluding treasury shares)
in the capital of the Company (as calculated in accordance with sub-paragraph (2) below) (“Issued
Share”) provided that the aggregate number of shares (including shares to be issued in pursuance
of convertible securities made or granted pursuant to this Resolution) to be issued other than on a
pro-rata basis to shareholders of the Company does not exceed twenty per cent (20%) of the total
number of Issued Shares;
2) (subject to such manner of calculation as may be prescribed by the SGX-ST) for the purpose of
determining the aggregate number of shares that may be issued under sub-paragraph (1) above, the
percentage of Issued Shares shall be based on the total number of issued shares (excluding treasury
shares) in the capital of the Company at the time this Resolution is passed, after adjusting for:
(i) new shares arising from the conversion or exercise of convertible securities;
(ii) (where applicable) new shares arising from exercising share options or vesting of share awards
outstanding or subsisting at the time of the passing of this Resolution, provided the options or
awards were granted in compliance with Part VIII of Chapter 8 of the Listing Manual of the SGX-
ST; and
(iii) any subsequent bonus issue, consolidation or subdivision of the shares;
3) the fifty per cent (50%) limit in sub-paragraph (1) above may be increased to one hundred per cent
(100%) for the Company to undertake pro-rata renounceable rights issues at any time up to
31 December 2010 or such other date as may be determined by the SGX-ST;
harmony in motion Pteris Global Limited 149
annual report 2009
noticeofagm
4) in exercising the authority conferred by this Resolution, the Company shall comply with the rules,
guidelines and measures issued by the SGX-ST for the time being in force (unless such compliance
has been waived by the SGX-ST) and the Articles of Association for the time being of the Company;
and
5) (unless revoked or varied by the Company in General Meeting), the authority conferred by this
Resolution shall continue in force until the conclusion of the next Annual General Meeting of the
Company or the date by which the next Annual General Meeting of the Company is required by law
to be held, whichever is the earlier.
(Resolution 8)
(See Explanatory Note 1)
9 Authority to issue shares at a discount
That subject to and pursuant to the share issue mandate in Resolution 8 above being obtained, authority
be and is hereby given to the Directors to issue new shares other than on a pro-rata basis to shareholders
of the Company, at an issue price per new share which shall be determined by the Directors in their
absolute discretion in accordance with the requirements of the SGX-ST, and during the period up to 31
December 2010 or such other date as may be determined by the SGX-ST, such price may represent up
to a twenty per cent (20%) discount to the weighted average price per share determined in accordance
with the requirements of the SGX-ST.
(Resolution 9)
(See Explanatory Note 2)
10 Authority to offer and grant options under the rules of The Inter-Roller Engineering Limited Employees’
Share Option Scheme 2001 (the “Scheme”)
That pursuant to Section 161 of the Companies Act, Cap. 50, the Directors of the Company be authorised
and empowered to offer and grant options under the rules of the Scheme and to issue from time to time
such number of shares in the capital of the Company as may be required to be issued pursuant to the
exercise of the options granted under the Scheme, and that such shares may be issued notwithstanding
this authority has ceased to be in force so long as the shares are issued pursuant to an offer or grant of
options made while this authority was in force, provided always that the aggregate number of shares to
be issued under this Scheme shall not exceed fifteen per cent (15%) of the issued shares in the capital
of the Company excluding treasury shares for the time being.
(Resolution 10)
(See Explanatory Note 3)
ANY OTHER BUSINESS
11 To transact any other business as may be transacted at an Annual General Meeting.
By Order of the Board
Steven Lwi Tong Boon/Foo Soon Soo
Company Secretaries
Singapore
12 April 2010
150 Pteris Global Limited harmony in motion
annual report 2009
noticeofagm
Explanatory Notes:
1. The Ordinary Resolution 8 above, if passed, will empower the Directors of the Company from the date
of this Meeting until the date of the next Annual General Meeting of the Company, or the date by which
the next Annual General Meeting of the Company is required by law to be held or the date by which
such authority is varied or revoked by the Company in a general meeting of the Company, whichever
is the earlier, to issue shares, or convertible securities and to issue shares pursuant to such convertible
securities, up to a number not exceeding, in aggregate, fifty per cent (50%) of the total number of Issued
Shares of which up to twenty per cent (20%) of the total number of Issued Shares may be issued other
than on a pro rata basis to existing shareholders of the Company.
The fifty per cent (50%) limit may be increased to one hundred per cent (100%) if the Company undertake
a pro-rata renounceable rights issues at any time up to 31 December 2010 or such other date as may be
determined by the SGX-ST.
For determining the aggregate number of shares that may be issued, the percentage of issued shares
will be calculated based on the total number of issued shares (excluding treasury shares) in the capital
of the Company at the time this Ordinary Resolution 8 is passed after adjusting for new shares arising
from the conversion or exercise of convertible securities, the exercise of share options or the vesting of
share awards outstanding or subsisting at the time when this Ordinary Resolution 8 is passed and any
subsequent consolidation or subdivision of shares.
2. Contingent on the passing of Ordinary Resoultion 8 above, the Ordinary Resolution 9 proposed above, if
passed, will empower the Directors of the Company to allot and issue shares other than on a pro-rata basis
at a discount of not more than twenty per cent (20%) to the weighted average price per new share pursant
to the share issue mandate, and in accordance with the requirements of the SGX-ST, at any time up to 31
December 2010 or such other date as maybe determined by SGX ST.
3. The Ordinary Resolution 10 above, if passed, will empower the Directors of the Company to issue shares
in the capital of the Company pursuant to the exercise of the options under the Scheme up to an amount
in aggregate not exceeding fifteen per cent (15%) of the issued share capital of the Company excluding
treasury shares for the time being.
Notes:
1. A member of the Company entitled to attend and vote at the above meeting is entitled to appoint more
than one proxy to attend and vote on his behalf. A proxy need not be a member.
2. The instrument appointing a proxy or proxies must be deposited at the Company’s registered office at
28 Quality Road, Singapore 618828 not less than 48 hours before the time of the Meeting.
harmony in motion Pteris Global Limited 151
annual report 2009
PTERIS GLOBAL LIMITED IMPORTANT:
1. For investors who have used their CPF monies to Pteris
PROXY FORM Global Limited shares, this Annual Report is forwarded to
them at the request of their CPF Approved Nominees
Registration No. 197900230M and is sent solely FOR INFORMATION ONLY.
2. This Proxy Form is not valid for use by CPF Investors
and shall be ineffective for all intents and purposes if
used or purported to be used by them.
I/We ___________________________________________________________________________________________
of ______________________________________________________________________________________________
being a member/members of the above mentioned Company, hereby appoint
Name Address NRIC/Passport Proportion of
No. Shareholdings (%)
and/or (delete as appropriate)
or failing him/her, the Chairman of the Meeting as *my/our *proxy/proxies to attend and to vote for *me/us
on *my/our behalf and if necessary, to demand a poll, at the Annual General Meeting to be held at 28 Quality
Road, Singapore 618828 on 27 April 2010, Tuesday at 3.00 pm and at any adjournment thereof.
(Please indicate with an “X” in the spaces provided whether you wish your vote(s) to be cast for or against
the Ordinary Resolutions as set out in the Notice of Annual General Meeting. In the absence of specific
directions, the *proxy/proxies will vote or abstain as *he/they think fit, as *he/they will on any other matter
arising at the Annual General Meeting.
No. Resolutions For Against
Ordinary Business
Adoption of Audited Financial Statements of the Company for the financial
1. year ended 31 December 2009 and the Directors’ Report and Auditors’
Report thereon.
Approval of Directors’ Fees of S$296,062 for the financial year ended 31
2. December 2009.
Re-election of Mr Tan Guong Ching as a Director of retiring under Article 107
3. of the Company’s Articles of Association.
Re-election of Mr Loh Chin Hua as a Director of retiring under Article 107 of
4. the Company’s Articles of Association.
Re-election of Mr Oon Chong Howe as Director of retiring under Article 107
5. of the Company’s Articles of Association.
Re-appointment of Mr Haider M. Sithawalla as Director under Section 153(6)
6. of the Companies Act (Chapter 50).
Re-appointment of KPMG LLP as Auditors of the Company and to authorize
7. the Directors to fix their remuneration.
Special Business
Authority for Directors to issue shares pursuant to Section 161 of the
8. Companies Act, Cap. 50.
Authority for Directors to issue placement shares at an issue price of up to a
9. maximum discount of 20% (contingent on the passing of Resolution 8).
Authority for Directors to offer and grant options and issue shares in connection
10. with the Inter-Roller Engineering Limited Employees’ Share Option Scheme
2001.
*Delete accordingly
Dated this __________________ day of _________________________ 2010.
Total Number of Shares Held
Signature(s) of Member(s) or Common Seal
Notes:
1. Please insert the total number of shares held by you. If you have shares entered against your name in the
Depository Register (as defined in Section 130A of the Companies Act, Cap 50 of Singapore), you should
insert that number of shares. If you have shares registered in your name in the Register of Members,
you should insert that number of shares. If you have shares entered against your name in the Depository
Register and shares registered in your name in the Register of Members, you should insert the aggregate
number of shares. If no number is inserted, the instrument appointing a proxy or proxies shall be deemed
to relate to all the shares held by you.
2. A member of the Company entitled to attend and vote at a meeting of the Company is entitled to appoint
one or two proxies to attend and vote instead of him.
3. Where a member appoints two proxies, the appointments shall be invalid unless he specifies the proportion
of his shareholding (expressed as a percentage of the whole) to be represented by each proxy.
4. The instrument appointing a proxy or proxies must be deposited at the registered office of the Company
at 28 Quality Road, Singapore 618828, not less than 48 hours before the time appointed for the Annual
General Meeting.
5. 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 seal or under the hand of an officer or attorney duly authorised.
6. A corporation, which is a member, may authorise by resolution of its directors or other governing body
such person as it thinks fit to act as its representative at the Annual General Meeting, in accordance with
Section 179 of the Companies Act, Cap. 50 of Singapore.
7. The Company shall be entitled to reject the instrument appointing a proxy or proxies if it is incomplete,
improperly completed or illegible or where the true intentions of the appointor are not ascertainable from
the instructions of the appointor specified in the instrument appointing a proxy or proxies. In addition, in
the case of shares entered in the Depository Register, the Company may reject any instrument appointing
a proxy or proxies lodged if the member, being the appointor, is not shown to have shares entered against
his name in the Depository Register as at 48 hours before the time appointed for holding the Annual
General Meeting, as certified by the Central Depository (Pte) Limited to the Company.
28 Quality Road Singapore 618828
Tel: (65) 6861 2828 Fax: (65) 6266 5516
Email: pgl@pterisglobal.com
Website: www.pterisglobal.com
Co Reg No: 197900230M
CANADA SINGAPORE
Pteris Global (Canada) Inc. Pteris Global Limited
Pteris Pte Ltd
CHINA Inter-Roller Investments Pte Ltd
Pteris Global (Beijing ) Limited Inter-Roller Engineering Services Pte Ltd
Pteris Global (Suzhou) Limited
MALAYSIA UNITED STATES OF AMERICA
Pteris Global Sdn Bhd Pteris Global (USA) Inc.
MIDDLE EAST
IR (Middle East) Limited
Liability Company
INVESTOR RELATIONS
Tel: (65) 6663 1505
Fax: (65) 6268 8928
Email: investor.relations@pterisglobal.com