Brighter Future Ahead - Yongnam Holdings Limited

92 Pages·2010·2.02 MB·English

Annual Report 2009
Annual Report 2009
Brighter Future Ahead
CONTENTS
01
Corporate Profile
02
Chief Executive Officer’s Message
04
Board of Directors
06
Key Executives
07
Corporate Information
08
Operations Review
12
Financial Highlights
13
Corporate Governance
18
Financial Contents
81
Statistics of Shareholdings
and Warrantholdings
84
Notice of Annual
General Meeting
Proxy Form
CORPORATE PROFILE
Delhi International Airport
Marina Bay SandsTM Integrated Resort -
ArtScience Museum
Shaping the city skyline, adding structural and aesthetic value
to buildings, laying solid foundations that give people the
confidence to build upon – these are the ideals that Yongnam
has become synonymous with, as it grows from strength to
strength, year after year.
Steel is increasingly the material of choice for the Yongnam’s technical and value engineering solutions for
construction of buildings and temporary support for steel fabrication and erection have resulted in increased
deep excavations. The advantages of using steel over productivity, improved yield and lower costs. Our in-
conventional material such as concrete for building house pool of experienced and qualified engineers,
construction are numerous. The higher speed of detailers, technicians, welders, riggers and fitters are
construction, superior material strength to volume ratio, consistently adding value to our clients’ projects.
flexibility in design and aesthetics are just some of the
benefits of using steel. Yongnam is an ISO-9001:2000, IQNet and OHSAS 18001
qualified company and accredited fabricator of the
With over 30 years of experience in steel fabrication, highest S1 category from the Singapore Structural
Yongnam excels in adding value to steel construction. Steel Society. Our Quality Management System takes a
Our Singapore operations are housed at our mega-site planned approach towards continuous improvement of
in Tuas. Together with its new fabrication facilities our products, processes and services. Yongnam’s modular
in Nusajaya, Johore, Malaysia, the Group has a total strutting system, with a traceability procedure that
annual production capacity of 78,000 tonnes of steel meets the requirements of the Singapore Building and
fabrication. Yongnam utilises the latest fabrication Construction Authority, is the first to be certified by an
technologies and design innovation to offer solutions to independent auditor for reusability in earth retaining
our clients on a fast-track basis. Our modular strutting or stabilising structures.
system continues to give us a strong competitive edge
in meeting increasingly more stringent design and Moving forward, Yongnam aims to be the provider of
project requirements in infrastructure and construction choice and partner in solutions for the steel industry.
projects.
YONGNAM HOLDINGS LIMITED Annual Report 2009 01
CHIEF EXECUTIVE OFFICER’S MESSAGE
Seow Soon Yong, Chief Executive Officer
“The Group also won its eighth and
ninth contracts from the Marina Bay
SandsTM Integrated Resort in FY2009.
The Lion Garden Bridge and Cooling
Tower Structure project was valued at
approximately $17.6 million, while the
Crystal Pavilions project was valued at
approximately $38.7 million.”
Dear Shareholders,
The Group achieved its fourth consecutive year of record The Group won several contracts for the much acclaimed
performance in FY2009. Profit before tax hit a record Marina Coastal Expressway (“MCE”) in FY2009. The dual
$48.8 million on the back of a marginal 2.7% increase five-lane, 5km long MCE is a strategic underground
in revenue to $346.8 million. Yongnam continued to eastwest transport link between three major
perform well in FY2009. Notwithstanding the marginal expressways, catering to the projected increase in traffic
increase in revenue, gross profit registered an 18.0% volume generated by the high density developments in
improvement to $80.4 million, compared to $68.1 million the Marina Bay area. Our first MCE contract, the MCE
in FY2008. Gearing has increased from 0.56 times as at C485, valued at approximately $208.1 million, is the
the end of FY2008 to 0.75 times as at the end of FY2009 single largest contract win for the Group to-date. This
in line with increased project financing requirements. was followed by the MCE C487 valued at approximately
The Group’s net worth increased from $147.7 million as $53.0 million, the MCE C483 valued at approximately
at the end of FY2008 to $187.6 million as at the end of $23.1 million, and the MCE 486 valued at approximately
FY2009. $21.5 million.
Our relentless efforts at ensuring on-time and quality The Group also won its eighth and ninth contracts from
delivery, coupled with the Group’s established brand the Marina Bay SandsTM Integrated Resort in FY2009.
name as a preferred specialist steel contractor, enabled The Lion Garden Bridge and Cooling Tower Structure
us to benefit from the increased spending on mega project was valued at approximately $17.6 million, and
infrastructural projects in the region. Our projects with the Crystal Pavilions project was valued at approximately
the Marina Bay SandsTM Integrated Resort and Dubai $38.7 million. In addition, the Group also clinched the
Metro continued to progress well, and are scheduled Gardens by the Bay project, owned by the National
for completion at various times within FY2010. Work Parks Board of Singapore, valued at approximately
commenced on several projects secured towards the $58.2 million. As at the end of FY2009, the Group’s
end of FY2008 and within FY2009, such as the Civic, order book remained healthy at $492.0 million.
Cultural, Retail & Entertainment Hub at Vista Xchange,
One North, Marina Coastal Expressway and Gardens by With the easing of the global financial crunch brought
the Bay. about by the sub-prime crisis in FY2008, and helped
by the measures put in place by the government such
as the loan insurance scheme, the Group continues to
enjoy strong support from its bankers and secured the
necessary financing for its projects as well as working
capital.
02 YONGNAM HOLDINGS LIMITED Annual Report 2009
CHIEF EXECUTIVE OFFICER’S MESSAGE
MReasroinrta -B Aaryt SScainednscTeM MIntuesgeruamted Marina Coastal Expressway Delhi International Airport
The Dubai World crisis and the general slowdown in While the recent announcement on the progressive
Dubai in FY2009 brought attention from various sectors increase in foreign worker levies by the Singapore
on the exposure of the Group with respect to its Dubai government is not expected to have a significant impact
Metro project. Our Dubai Metro project is funded by on Yongnam, the Group recognises the need to continue
the Dubai government and our contract was with the to rationalise our headcount and improve upon our
joint venture between Obayashi Corporation, Kumagai skill sets and methodologies in view of the increasing
Corporation and their Turkish partner. The impact had competition and rising costs of business. To achieve this,
been accounted for in FY2009. The project is scheduled the Group will continue to upgrade its employees and
for completion in the first half of FY2010 and with the recruit qualified and experienced staff to help further
recent resolution of differences between the Dubai improve our productivity.
government and the joint venture, we look forward to
a normalization of the situation. I would like to thank the Board for their invaluable
contributions, our staff for their dedication, as well as
The Group remains cautiously optimistic about the our customers, bankers and suppliers for their support.
outlook for the next few years. While we expect to In appreciation of the Shareholders’ confidence in the
benefit from the Singapore government’s investment Group, the Board has recommended a first and final
plan over the next 10 to 12 years to improve our dividend of 0.5 cent per share for FY2009.
transport network, increased spending on mega
infrastructural projects such as the Sports Hub, as well With increasing competition and rising business costs,
as infrastructural and commercial developments in the the times ahead will be even more challenging. However,
Middle East, India and Hong Kong, we are also facing I am confident that with the continued dedication and
increasing competition from international players. support from all our stakeholders, we will continue to
The Group will retain its focus on the infrastructural perform well in FY2010.
developments in Singapore and continue to leverage
on the footholds that it has established in our overseas
markets.
Seow Soon Yong
Chief Executive Officer
YONGNAM HOLDINGS LIMITED Annual Report 2009 03
BOARD OF DIRECTORS
SEOW SOON YONG TAN TIN NAM SIAU SUN KING
SEOW SOON HEE CHIA SIN CHENG LIM GHIM SIEW, HENRY
GOON KOK LOON LIEW JAT YUEN, RICHARD TAN ENG KIAT, DOMINIC
04 YONGNAM HOLDINGS LIMITED Annual Report 2009
BOARD OF DIRECTORS
SEOW SOON YONG restructuring plan for the Group. He left in 2003 to join
Chief Executive Officer Singapore Computer Systems Ltd as CFO, and returned
Appointed to the Board as Managing Director and CEO on to Yongnam in 2006. Mr. Chia attended the Advance
19 October 1994. Management Program at Harvard Business School and is a
member of the ICAEW and ICPAS.
Mr. Seow joined Yongnam Engineering & Construction (Pte)
Ltd (“YNEC”) in 1978 and acquired diverse experiences in LIM GHIM SIEW, HENRY
marketing, project management and general management. Non-Executive & Independent Director
He was instrumental in pioneering the development of Appointed to the Board on 15 October 2002.
the Group’s Modular Strutting System. Introduced to the
industry in 1995, the system is now accepted as the de- Mr. Lim is the owner of law firm M/S G. S. Lim & Partners,
facto cost-effective temporary support for deep excavation conducting mainly general litigation works. He obtained
works. Mr. Seow, who is multi-lingual, ventured the Group his law degree from the University of London in 1988 and
into overseas markets and secured significant projects was called to the English Bar in 1992. He is a member of
such as the Dubai Metro Rail and the Delhi International the Honorable Society of Lincoln’s Inn. Mr. Lim chairs the
Airport. Nominating Committee and is a member of the Audit
Committee. He is also the Chairman of a locally based
TAN TIN NAM shipping company.
Non-Executive & Non-Independent Director
Appointed to the Board on 19 October 1994. GOON KOK LOON
Non-Executive & Independent Director
Mr. Tan founded the Yongnam Group and has more than Appointed to the Board on 15 July 2003.
40 years of experience in the construction industry. Prior to
setting up his own business, Yongnam Engineering Works Mr. Goon was Deputy Group President and President
(“YNEW”) in 1971, Mr. Tan spent six years with mechanical (International Business Division) of PSA Corporation Ltd,
engineering and construction companies providing and has more than 30 years of experience in corporate
engineering services to granite quarries and shipyards. management, operations and administration. He graduated
Mr. Tan led the expansion of YNEW into steel fabrication, from University of Liverpool, UK, with 1st class honours in
mechanical and civil engineering for the construction Engineering (Electrical), and attended the Post-graduate
of power plants, industrial buildings, public works and Study Program at the Massachusetts Institute of Technology,
buildings for public and private institutions. YNEW was USA. Mr. Goon chairs the Audit Committee and is a member
converted into YNEC in 1973. of the Remuneration and Nominating Committees. He
also sits on the boards of Venture Corporation Ltd, Jaya
SIAU SUN KING Holdings Ltd and Hisaka Holdings Ltd.
Executive Director
Appointed to the Board on 19 October 1994. LIEW JAT YUEN, RICHARD
Non-Executive & Independent Director
Mr. Siau was a founding partner of YNEW. A Mechanical Appointed to the Board on 23 January 2006.
Engineering graduate from the Ngee Ann Polytechnic, Mr.
Siau was actively involved in the erection and commissioning Professor Liew is a world renowned expert in steel and
of the first two container quay cranes in PSA in 1972. In composite structures. He graduated from the National
1973, Mr. Siau led the installation and commissioning of University of Singapore (NUS) with a Bachelor Degree in
the Cable Car System in Sentosa. With extensive experience 1986 and a Master of Engineering Degree in 1988, and
in mechanical engineering, Mr. Siau has held diverse from Purdue University, USA, with a PhD in 1992. He is
responsibilities within the Group. He currently oversees the a registered Professional Engineer in Singapore and a
Group’s operations in Malaysia as well as the Mechanical Chartered Engineer in the UK. He is a Past President of the
Division. Singapore Structural Steel Society. He provides specialist
advice to the design and construction of high-rise and large
SEOW SOON HEE span structures and has served on numerous committees on
Executive Director material specifications and design practices in Singapore
Appointed to the Board on 19 October 1994. and the region. Currently the Professor and Director of the
Hazard, Risk and Mitigation Programme in the Department
Mr. Seow joined the Group in 1977. Starting his career with of Civil Engineering at NUS, Professor Liew also chairs the
the Group in its Mechanical Engineering division, Mr. Seow Remuneration Committee and is a member of the Audit
expanded his portfolio to include accounting, finance and Committee. He also sits on the board of Technics Oil and
administration. He graduated from the Nanyang University, Gas Ltd.
Singapore, with a Bachelor of Arts degree. He currently
explores new business opportunities for the Group in TAN ENG KIAT, DOMINIC
China. Non-Executive & Independent Director
Appointed to the Board on 3 March 2008.
CHIA SIN CHENG
Executive Director & Finance Director Mr. Tan has over 40 years of experience in business
Appointed to the Board on 8 January 2007. development, corporate management, and management
of large civil engineering, building, industrial and
Mr. Chia obtained his Chartered Accountancy qualification environmental engineering projects. He started his career
from the Institute of Chartered Accountants in England as a Trainee Quantity Surveyor with Gammon (Malaysia) Ltd
& Wales, UK (“ICAEW”), in 1980. He worked with Ernst in 1966 and progressed to the rank of Executive Director
& Young in both London and Singapore for seven years, (International Operations). He joined United Engineers
before joining WBL Corporation Ltd for 15 years, where (Singapore) Pte Ltd in 1993 and became Managing
he served as Group Internal Audit Manager, Group Director in 2000, where he spearheaded the company’s
Financial Controller and Group General Manager, Finance regionalisation to West Malaysia, Brunei, Indonesia,
& Treasury. Mr. Chia joined Yongnam in 2002 as CFO and Vietnam and the Middle East. Mr. Tan is a member of both
was instrumental in conceptualising and implementing a the Nominating and Remuneration Committees.
YONGNAM HOLDINGS LIMITED Annual Report 2009 05
KEY EXECUTIVES
CHELVADURAI HARENDRAN TAKASHI WATABE
Project Director Engineering Director
Mr. Harendran joined Yongnam in 1997. He has over Mr. Watabe joined Yongnam in 2009. He graduated from
30 years of experience in the building and construction Waseda University of Tokyo, Japan, with a Bachelor of
industry, having started with Ove Arup & Partner in Science degree in Structural Engineering. Mr. Watabe
London as a Design Engineer. He joined Woh Hup Pte has amassed many years of experience in the field of
Ltd in 1979 as Chief Engineer (Design) and in 1984 joined structural steel engineering and construction as well
Low Keng Huat (S) Ltd as Project Manager and managed as project management. He has also worked on many
several key projects including Keppel Distripark. Mr. mega projects for both the Japanese and international
Harendran graduated with a Bachelor of Science degree markets. His signature projects here in Singapore are One
from University College, London, and is a member of Raffles Quay Building, The National Library, Singapore
the Institution of Civil Engineers, a Chartered Engineer Post Centre, UOB and OUB Centres.
in the UK and a Professional Engineer in Singapore.
HO WAN BOON
TAN KIE TAT, RAYMOND
Engineering Director – Design
Project Director Mr. Ho joined Yongnam in 2007, after spending more
Mr. Tan joined Yongnam in 2008 with vast experience than 20 years in structural design, investigation and
in project management, having worked in local and engineering quality management in the Public Works
foreign based multi-national companies as project Department, Indeco Consortium, CPG Consultants and
manager for many years. Notable projects handled CPG Laboratories. He obtained his German professional
by Mr. Tan include The Spectrum at Woodlands and qualification Diplom-Ingenieur (Fachhochschule) in
Fusionpolis at One North. He graduated in 1981 from the 1981 and Master of Science degree with Distinction
National University of Singapore in Civil and Structural from Imperial College, UK, in 1990. Mr. Ho is a Chartered
Engineering. Engineer of Engineering Council UK, a member of the
UK Institution of Structural Engineers, a member of the
KENJI AZUMA
Technical Committee on Building Structure and Sub-
Project Director structure of SPRING Singapore and the 1st Vice President
Mr. Azuma joined Yongnam in 2009 with vast experience of the Singapore Structural Steel Society.
in project management, having worked in Japan and
foreign-based Japanese companies as project manager SEOW KHNG CHAI
for many years. Notable projects managed by Mr. General Manager – Malaysia
Azuma include Tokyo Trance Bay Project, Honsyuu- Mr. Seow has been with the Group for more than
Sikoku Kurushima Bridge and Hong Kong Convention 20 years, starting as a Foreman in the Company. He
Exhibition Center. He graduated in 1972 from the was appointed as General Manager of the Group’s
Nagoya Institute of Technology in Civil and Structural subsidiaries in Malaysia, where he handled numerous
Engineering. prominent projects, including Kedah Cement Plant
in Langkawi, Langkawi Airport, Pasir Gudang CCCP in
CHEONG HOCK CHOON
Johor. In Singapore, he also handled projects such as
Project Director Jurong Power Station, Senoko Power Plant, Pulau Seraya
Mr. Cheong joined Yongnam in 1978 and has more than Power Plant, MRT Contracts, PSA Container Crane and
30 years of experience in steel structure and infrastructure Senoko Gas Turbine.
projects. In 1999, he was seconded to Hong Kong to
manage the Group’s Hong Kong/China operations which LIM CHEONG GUAN, JOHN
included a number of projects such as Hong Kong Police Senior Manager – Business Development
Headquarters, KCRC East Rail Extension and other Hong Mr. Lim joined Yongnam from 1995 to 2003 and returned
Kong infrastructure development projects. Mr. Cheong in 2004. He has more than 20 years of experience in the
was seconded to Dubai in 2006 where he managed the engineering and construction industry. Mr. Lim joined the
Dubai Metro project. industrial engineering division of Keppel Corporation
Ltd as a Project Manager in 1985 and rose to become
SIK KAY LEE
General Manager of a subsidiary of Keppel Integrated
Project Director Engineering Group. Subsequently, he became the
Mr. Sik joined Yongnam in 2006 and has more than General Manager of an associate company in Bangkok,
25 years of working experience in building and civil Thailand. Mr. Lim is a Business Administration graduate
engineering projects, having worked in local and foreign from the Singapore Institute of Management, and holds
based multi-national companies as Project Manager. a Diploma in Ship Construction from the Singapore
Notable projects managed by Mr. Sik include the Seraya Polytechnic.
Power Station, Safti Military Institution and Singapore
Post Centre. Mr. Sik graduated from the University TEO SHENG KIONG
of Leicester, UK with a Bachelor of Science degree in Group Financial Controller
Engineering. Having served Yongnam from 2002 to 2004, Mr. Teo
returned in 2007. He has worked in listed companies such
SEOW SOON HOCK
as Inter-Roller Engineering Ltd and Singapore Computer
Production Director Systems Ltd, and has regional exposure to countries
Mr. Seow has been with Yongnam for more than 30 including China and Malaysia. Mr. Teo graduated from
years and has comprehensive knowledge in production, Lancaster University, UK, with 1st Class Honours in
production planning and logistic management. He is Accounting & Finance in 1994.
responsible for all fabrication, scheduling, allocation
of resources and progress tracking as well as providing
technical assistance and innovative methods to
engineering design.
06 YONGNAM HOLDINGS LIMITED Annual Report 2009
CORPORATE INFORMATION
BOARD OF DIRECTORS REGISTERED OFFICE
Seow Soon Yong (Managing Director / CEO) 51 Tuas South Street 5
Tan Tin Nam Singapore 637644
Siau Sun King Telephone : [phone]
Seow Soon Hee Fax : [phone]
Chia Sin Cheng Email : [email protected]
Lim Ghim Siew, Henry Website : www.yongnam.com.sg
Goon Kok Loon
Liew Jat Yuen, Richard COMPANY REGISTRATION NUMBER
Tan Eng Kiat, Dominic 199407612N
AUDIT COMMITTEE SHARE REGISTRAR
Goon Kok Loon (Chairman) Tricor Barbinder Share Registration Services
Lim Ghim Siew, Henry 8 Cross Street
Liew Jat Yuen, Richard #11-00 PWC Building
Singapore 048424
REMUNERATION COMMITTEE
Liew Jat Yuen, Richard (Chairman) AUDITORS
Goon Kok Loon Ernst & Young LLP
Tan Eng Kiat, Dominic Certified Public Accountants
1 Raffles Quay
NOMINATING COMMITTEE #14-00 One Raffles Quay
Lim Ghim Siew, Henry (Chairman) Singapore 048583
Goon Kok Loon
Tan Eng Kiat, Dominic AUDIT PARTNER
Sim Juat Quee, Michael (Appointed with effect
COMPANY SECRETARIES from financial year ended 31 December 2008)
Lim Lan Sim, Joanna, ACIS
Pan Mi Keay, ACIS (Appointed on 27 February 2010) PRINCIPAL BANKERS
Lim Aik Kun, ACIS (Resigned on 15 December 2009) DBS Bank Ltd
ABN AMRO Bank N.V.
The Hongkong and Shanghai Banking Corporation Limited
Standard Chartered Bank
Oversea-Chinese Banking Corporation Limited
Citibank, N.A.
Malayan Banking Berhad
United Overseas Bank Limited
Marina Coastal Expressway
YONGNAM HOLDINGS LIMITED Annual Report 2009 07
OPERATIONS REVIEW
The Group secured a total of nine projects at the prestigious
Marina Bay SandsTM Integrated Resort. The first three projects
for the fabrication of plunge-in columns, structural steelworks
for the hotel towers and temporary strutting works for the south
podium have been completed. The remaining six projects, namely
North Podium, Skypark, View Corridors & Canopies, ArtScience
Museum, Lion Garden Bridge and Cooling Tower Structure, and
the Crystal Pavilions are scheduled for completion at various
times within FY2010.
SMkyaprianrak Bay SandsTM Integrated Resort -
08 YONGNAM HOLDINGS LIMITED Annual Report 2009