B26780 CFM AR 2013 COVER CAST

106 Pages·2013·1.12 MB·English

CFM HOLDINGS LIMITED
Registration No.: 200003708R
CFM Holdings Limited
14 New Industrial Road
#07-02A, Hudson Industrial Building
Singapore 536203
Annual Report 2013
Tel : [phone]
Fax : [phone]
Email : [email protected]
www.cfmholdings.com
CFM HOLDINGS LIMITED ANNUAL REPORT 2013
Contents
Corporate Information 2
Corporate Profi le 3
Vision and Mission 3
Corporate Structure 4
Chairman’s Message 5
Board of Directors 6
Financial Highlights 7
Operation and Financial Review 7
Corporate Governance 11
Financial Statements 33
Statistics of Shareholdings 96
Notice of the Thirteenth
Annual General Meeting 97
Proxy Form
This document has been prepared by the Company and its contents have been reviewed by the Company’s sponsor, Asian
Corporate Advisors Pte. Ltd. (the “Sponsor”), for compliance with the relevant rules of the Singapore Exchange Securities Trading
Limited (“SGX-ST”). The Sponsor has not independently verifi ed the contents of this document including the correctness of any of
the fi gures used, statements or opinions made.
This document has not been examined or approved by the SGX-ST and the SGX-ST assumes no responsibility for the contents of
this document including the correctness of any of the statements or opinions made or reports contained in this document.

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The contact person for the Sponsor is Mr Liau H.K. Telephone number: 6221 0271
CFM HOLDINGS LIMITED ANNUAL REPORT 2013
Corporate Information
Board of Directors
Ip Kwok Wing Executive Chairman
Janet Lim Fong Li Chief Executive Offi cer
Soo Kok Hwa Executive Director
Peter Lai Hock Meng Lead Independent Director
Wong Kok Hoe Independent Director
Er Kwong Wah Independent Director
Audit Committee Company Secretary
Peter Lai Hock Meng (Chairman) Benny Lim Heng Chong
Wong Kok Hoe Chris Chong Chee Keong
Er Kwong Wah
Registered Offi ce
Remuneration Committee 14 New Industrial Road
Er Kwong Wah (Chairman) #07-02A Hudson Industrial Building
Wong Kok Hoe Singapore 536203
Peter Lai Hock Meng Tel: [phone]
Fax: [phone]
Nominating Committee
Wong Kok Hoe (Chairman) Share Registrar
Peter Lai Hock Meng Boardroom Corporate &
Er Kwong Wah Advisory Services Pte. Ltd.
50 Raffl es Place
Auditors #32-01 Singapore Land Tower
Baker Tilly TFW LLP Singapore 048623
Chartered Accountants of Singapore Tel : [phone]
15 Beach Road #03-10
Beach Centre Principal Bankers
Singapore 189677 United Overseas Bank Ltd
Partner: Khor Boon Hong Malayan Banking Berhad
(appointed since fi nancial year ended 30 June 2011) Hong Leong Finance Ltd
DBS Bank Ltd
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CFM HOLDINGS LIMITED ANNUAL REPORT 2013
Corporate Profi le
Established since 1979, CFM has evolved into a customer-focused manufacturer providing metal stamping services,
design, fabrication and the sale of tool-and-die used for the manufacture of stamped metal components. Backed by
production facilities in Malaysia, Indonesia, the Slovak Republic, China and Thailand, our Group supports a customer
base of MNCs.
CFM reached an important milestone in our corporate history with the launch of our Initial Public Offering on 16
January 2004.
Today, we serve customers in the electronics industry as well as customers from the automotive, telecommunication,
technology and M&E industries.
Vision
Our vision is to be the leading customer-focused manufacturer, offering a wide range
of quality metal stamped components at cost-effective prices.
We also aim to earn recognition for our excellent customer service and value-added
services.
Mission
We are dedicated to be strategic partners with our customers to achieve a competitive
edge with a wide range of quality metal-stamped components at cost-effective
prices.
We believe in being close to our key customers from understanding and translate
their needs to quality products.
We also believe in continual development and improvement in engineering and
manufacturing capabilities as well as in people and management skills.
Our future lies in expanding and diversifying across geographies, industries, products
and skills.
At CFM, we go the extra mile for our customers and partners.
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CFM HOLDINGS LIMITED ANNUAL REPORT 2013
Corporate Structure
CFM ProEnergies LLC
(held for sale)
100%
Our Global Footprint
Corporate Headquarter
CFM Holdings Limited CHINA CFM Precision Tooling Sdn. Bhd.
No 14, New Industrial Road, No. 4 Jalan Haji Sa’at, Sungai Tiram,
Dalian CFM Precision Tooling
#07-02A Hudson Industrial Building 81800 Ulu Tiram, Johor, Malaysia
Co., Ltd
Singapore 536203
Room 1-1A
Tel : [phone] Hantong Metal Component Sdn Bhd
No. 99, Huai He Zhong Road,
Fax : [phone] No. 4 Jalan Haji Sa’at, Sungai Tiram,
Dalian Economic Development Zone,
Email : [email protected] 81800 Ulu Tiram, Johor, Malaysia
116600, Dalian,
www.cfmholdings.com
People’s Republic of China
Hantong Metal Component
(Penang) Sdn. Bhd.
Subsidiaries
INDONESIA Lot 83 & 84, Jalan 1/8 PKNK,
PT Hantong Precision Kawasan Perindustrian Sungai Petani,
SINGAPORE
Manufacturing Batam 08000 Sungai Petani, Kedah, Malaysia
Cheong Fatt Metal Factory Pte Ltd
Komplek Citra Buana Centre Park 2,
Glalent Technology Pte. Ltd. Kelurahan Kampung Seraya, THAILAND
No 14, New Industrial Road,
Kecamatan Batu Ampar, HTM Takahashi (Thailand) Co. Ltd.
#07-02A Hudson Industrial Building Batam, Indonesia Level 29, 999/9 Rawa I Road,
Singapore 536203 Khwaeng Pathumwan Khet Pathumwan,
MALAYSIA Bangkok 10330, Thailand
SLOVAK REPUBLIC
Hantong Metal Component
CFM Slovakia, s.r.o. UZBEKISTAN
(KL) Sdn Bhd
Radlinskeho 17, 052 01, Lot 1911-A Kawasan Perindustrian, CFM ProEnergies LLC
Spisska Nova Ves, “Navoi” Free Industrial -
Kg Baru Balakong,
Slovak Republic Economic Zone, Karmana District,
43300 Seri Kembangan,
210600, Republic of Uzbekistan
Selangor, Malaysia
* Disposal of assets to Johnson Controls & Summit Interiors Ltd was completed on 29 June 2012
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CFM HOLDINGS LIMITED ANNUAL REPORT 2013
Chairman’s Message
Dear Shareholders,
It is my pleasure to present to you the annual report for FY2013. Our Group’s revenue declined 9.7% to S$42.8
million from S$47.4 million in the immediate prior year. Rising costs and further pricing pressure from customers were
amongst the challenges that our Group faced. With the additional impairment loss resulted from the demolition of
the existing building for the purpose of erecting a 5-storey detached industrial building by the Group and also the
various housekeeping exercises including allowance for doubtful receivables and inventories written down, our Group
suffered a net loss of approximately S$3.3 million.
Prospects and Outlook
CFM continues to be affected by uncertainties in the global macroeconomics environment and these have resulted in
slow down in our customers’ end and affecting our metal stamping and tooling business. The challenging business
conditions will also continue to add pressure on pricing and margin in the coming years.
While we focus on our core business where we have the competence in the industry, we will also consider other
opportunities that we believe there are high growth potential. In addition, we also explore new market around the
region for merger and acquisition opportunities.
We remain fully committed in enhancing our shareholders value and generating better return for all our stakeholders.
Appreciation
I would like to express my sincere gratitude to all our shareholders for their continued support and our Directors for
their direction and guidance. I would also like to express my sincere appreciation to all our employees whose team
spirit, dedication and hard work have always prevailed. My special thanks must also go to investors, business partners
and customers for their confi dence and support in CFM Holdings and our Group of Companies.
Ip Kwok Wing
Executive Chairman
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CFM HOLDINGS LIMITED ANNUAL REPORT 2013
Board of Directors
Mr Ip Kwok Wing Mr Soo is a member of Malaysian Cambridge in England, majoring in
Executive Chairman Institute of Accountants and a Fellow Economics. He is also an accredited
Mr Ip Kwok Wing is the Executive member of Association of Chartered Chartered Financial Analyst with
Chairman of our Group. Together Certifi ed Accountants (ACCA),United the CFA Institute in the USA and a
with Mdm Janet Lim Fong Li, Mr Ip was Kingdom. Mr. Soo also holds a Fellow of the Chartered Institute of
a co-founder of our Group in 1979, Bachelor of Management (Honours) Marketing in the United Kingdom.
and was appointed as Managing degree from Universiti Sains Malaysia
Director since the incorporation of (USM). Mr. Er Kwong Wah
our Group. Mr. Ip was fi rst appointed Independent Director
to the Board on 28 April 2000. Mr Wong Kok Hoe Mr. Er Kwong Wah spent 27 years
Independent Director in the service of the Singapore
Mr Ip is responsible for the Group’s Mr Wong is the Group Chief Government. Whilst in the civil
strategic planning and development Operating Offi cer of the Centurion service, he served in various ministries
of new products and markets. He has Group. The Group has interests in such as the Ministry of Defense, the
been spearheading all the expansion fund management, private equity Public Service Commission, Ministry
and growth of our Group. He began investments, property development of Finance, Ministry of Education
his career in metal stamping, tool & and investments. Prior to this, he was and the Ministry of Community
die fabrication and has an aggregate a partner in a local advocates and Development. He held Permanent
of more than 40 years of working solicitors fi rm. He has more than 18 Secretary Position first with the
experience in the metal stamping and years of experience in legal practice Ministry of Education from 1987-
tooling industries. and his main areas of practice were 1994 and then with the Ministry of
corporate law, corporate finance, Community Development until his
Mdm Janet Lim Fong Li mergers and acquisitions and venture retirement in 1998. Mr. Er Kwong
Chief Executive Offi cer capital. He is also a director of several Wah was fi rst appointed to the Board
Mdm Janet Lim Fong Li is the Chief listed companies, including Hartawan on 28 February 2013.
Executive Officer (“CEO”) of our Holdings Limited, Lifebrandz Ltd.,
Group. Assisted by the Group and Centurion Corporation Limited. Currently, he holds the position of
Chief Financial Offi cer and Individual Mr. Wong was fi rst appointed to the Executive Director, East Asia Institute
Subsidiary General Managers, she Board on 11 December 2003. of Management. Additionally, he sits
oversees day-to-day operations, as an independent director on the
finance and general management Mr Wong holds a Bachelor of Laws Boards of several public companies
of our Group. Mdm Janet was fi rst (Honours) degree from the National listed in the Singapore Exchange. He
appointed to the Board on 28 April University of Singapore. is also a Member of Raffl es Institution
2000. Board of Governors, as well as a
Mr. Peter Lai Hock Meng Trustee of the Tsao Foundation, a
Mdm Lim holds a Bachelor of Lead Independent Director charitable organization in Singapore
Science in Business Administration Mr. Peter Lai is the Chairman of HML dedicated to looking after the welfare
(Marketing) and Master in Marketing Consulting Group, a Singapore based of the aged.
Communication from the University boutique corporate advisory fi rm. He
of Canberra. is also a director of Champ Buyout For his contributions in serving the
III Pte Ltd, a private equity fi rm. Mr. community, he was conferred the
Mr Soo Kok Hwa Peter Lai has more than 30 years’ Public Service Medal (2004) and
Executive Director experience in both public and private the Public Service Star (2009) by the
Mr Soo Kok Hwa is the Chief finance sectors, including central Government of Singapore. Whilst in
Financial Officer (“CFO”) of our banking, investment banking, private the Civil Service, he was conferred
Group. He works closely with the banking, stockbroking and venture the Public Administration Medal
Executive Chairman, Group Chief capital. In addition, he sits on the (Gold) (1990). In 1991, he was
Executive Officer and the senior board of several listed companies, conferred the Commandeur dans
leadership and the board of directors including ASTI Holdings Ltd, China l’Ordre des Palmes Academiques by
to develop and implement strategies Energy Limited, China Essence the Government of France.
across the Group. Mr. Soo is a Limited, China Oilfi eld Technology
qualifi ed accountant and has over Service Group Limited and Delong A Colombo Plan and Bank of Tokyo
20 years’ experience in financial Holdings Limited. Mr. Peter Lai was Scholar, Mr Er Kwong Wah obtained
institution, manufacturing, and fi rst appointed to the Board on 25 a fi rst class honors degree in Electrical
trading environment.. Mr Soo was November 2011. Engineering at the University of
fi rst appointed to the Board on 28 Toronto, Canada, in 1970 and an
February 2013. Mr. Peter Lai holds a Bachelor of Arts MBA from the Manchester Business
(Honours) degree and a Master of School, University of Manchester in
Arts degree from the University of 1978.
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CFM HOLDINGS LIMITED ANNUAL REPORT 2013
Financial Highlights
Group
2013 2012
S$’000 S$’000
Revenue 42,838 47,416
Gross profi t 6,363 4,498
(Loss)/profi t before tax (2,444) 950
Tax expense (851) (455)
Net (loss) / profi t (3,295) 495
Total assets 29,716 35,951
Total liabilities 11,511 13,999
Operation And Financial Review
Overview of the Group’s Operations
Our Group designs, fabricate tool-and-die and manufacture fabrication and metal stamping components for the
electronics, automotive, telecommunications and mechanical and electrical industries. Our operations are in Singapore,
Malaysia, Slovak Republic, China and Indonesia. We are established in these countries to maintain proximity with our
customers.
On 22 May 2013, the Group has announced that Seng Foo Building Construction Pte Ltd was awarded a contract
for the proposed demolition and erection of a new 5-storey industrial detached building (“Project”) amounting to
S$7.7 million (“contract value”) for Singapore subsidiary. The Project will be partly fi nanced through bank borrowings
and partly the Singapore subsidiary’s internal resources. The subsidiary already received letter of offer from a fi nancial
institution which the Company is still in the process of acceptance of the offer as of 7 October 2013. The demolition
of the existing building has been carried out subsequent to the balance sheet date and the proposed new 5-storey
industrial building is expected to be completed by third quarter of 2014. This developement is 100% owned by the
Company.
Singapore and Indonesia
Our Singapore and Indonesia operations contributed 24.8% of the Group’s revenue. Singapore operation focused
on Marketing & Sales, Research & Development, Design and Procurement activities. We also specialize in prototyping
and sheet metal fabrication. The sales for FY2013 has increased by 45.4% mainly from the trading business, however
due to the impairment resulted from the demolition of the existing building for the purpose of erecting a 5-storey
detached industrial building and also the allowance for doubtful receivables, our Singapore operation has incurred a
net loss for the year.
Our Indonesia operation went through another challenging year. Revenue for the year was lower than the year before
after the relocation of operations of the major customers since FY2010. With the continued cost reductions and
control measures exercises and improvement in the production effi ciency, we managed to reduce the operating loss
as compared to the previous fi nancial year.
Malaysia
During the fi nancial year under review, our Malaysian operations contributed 48.8% of the Group’s revenue. The
revenue was 5.4% higher as compared to FY2012 mainly due to increase in orders by our Japanese customers.
Various cost control exercises and measures in addition to the improvement in the production effi ciency efforts have
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CFM HOLDINGS LIMITED ANNUAL REPORT 2013
Operation and Financial Review (Cont’d)
been implemented during this challenging period. By improving our marketing and internal effi ciency, we foresee our
Malaysian operations to continue to perform positively in the coming year.
Eastern Europe
Our Slovak Republic operation managed to contribute 22.4% of the Group’s revenue with the continued support
from our strategic customers.
We will continue to develop new customers in Eastern and Western Europe to further increase our revenue from
our Slovak Republic’s operation. The increase in marketing costs has resulted a marginal loss for our Slovak Republic
in FY2013. The Group will continue to improve the production effi ciency and to implement cost cutting exercise in
our Slovak Republic operation. We foresee our Slovak operation would be able to continue to be one of the profi t
contributors to our Group in the coming year.
China
Our operation in China went through another challenging year. During the fi nancial year under review, the revenue
from our China’s operation continue to improve as compared to FY2012. Improving production effi ciency, cost
control, and enlargement of customers base remain our key priorities in the coming year.
Uzbekistan
During the fi nancial year under review, our Uzbekistan operation continues to be in pre-operating status. In view
of our project in Uzbekistan is slower than our initial projection and expectation, we have decided to exit from
Uzbekistan.
Financial Review
Consolidated Profi t & Loss
The Group’s revenue decreased by 9.7% from S$47.4 million in FY2012 to S$42.8 million in FY2013. The decrease in
revenue was mainly due to the disposal of assets in our Thailand operation in June 2012 which had resulted reduction
in the revenue by almost S$6.9 million in FY2013 as compared to FY2012.
Our gross profi t increased from S$4.5 million in FY2012 to S$6.4 million in FY2013. The increase in gross profi t was
mainly attributed to tighter price control and also the improved productivity especially in our Malaysia and Indonesia
operations. In FY2013 we had also managed to secure few new projects that provided higher gross margin.
Other income decreased from S$3.3 million in FY2012 to S$1.1 million in FY2013. The decrease in other income was
mainly due to gain from disposal of assets in Thailand subsidiary of S$1.9 million in FY 2012.
Administrative and other expenses increased from S$5.5 million in FY2012 to S$8.5 million in FY2013. The increase
in administrative and other expenses was resulted from:
a. impairment of S$0.9 million resulted from the demolition of the existing building for the purpose of erecting a
5-storey detached industrial building by the Company’s subsidiary, Cheong Fatt Metal Factory Pte Ltd (“CFMFPL”);
b. allowance for doubtful receivables for the year amounted to S$0.9 million mainly attributable to the S$0.6 million
outstanding debt from a customer for which the Company has commenced legal actions in the High Court of
Singapore as announced on 18 June 2013;
c. inventories written down made in FY2013 of S$0.3 million;
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CFM HOLDINGS LIMITED ANNUAL REPORT 2013
Operation and Financial Review (Cont’d)
d. increase in professional costs of S$0.3 million that mainly spent on internal control and legal expenses;
e. fi xed assets written off of S$0.2 million in FY2013;
f. inventories written off of S$0.2 million in FY2013;
g. The depreciation charge has decreased from S$2.4 million in FY2012 to S$1.9 million in FY2013, mainly due to
the decline in properties, plant and equipment after the disposal of Thailand subsidiary which was completed at
end of FY2012; and
h. In FY2013, there is a foreign exchange loss of S$0.1 million compared to foreign exchange gain of S$0.3 million
in FY 2012. The loss in foreign exchange is mainly due to the weakening of US Dollar against Ringgit Malaysia in
FY2013.
The tax expense of S$0.9 million incurred in FY2013 was mainly attributable to the recognition of income tax expense
arising from taxable income generated by subsidiaries in Malaysia. In FY2013, we have received additional tax
assessment of S$0.4 million from the Tax Authority of Thailand for the disposal of assets that completed in FY2012.
For the fi nancial year ended 30 June 2013, the Group has incurred net loss of S$3.3 million.

Consolidated Balance Sheets
Property, plant and equipment decreased from S$9.7 million as at 30 June 2012 to S$6.8 million as at 30 June 2013
resulting from:
(a) impairment of property of S$0.9 million due to redevelopment of our property located in Ang Mo Kio, Singapore
for the purpose of erecting a 5-storey detached industrial building;
(b) fi xed assets written-off of S$0.2 million; and
(c) annual depreciation of S$1.9 million.
Investment decreased from S$1.2 million as at 30 June 2012 to S$0.2 million as at 30 June 2013 resulted from
the return from a 24 months Joint Venture Project in Port Dickson, Negeri Sembilan, Malaysia that projected to be
completed by October 2013.
Interest-bearing loans and borrowings and fi nance lease liabilities decreased from S$2.7 million as at 30 June 2012 to
S$1.5 million as at 30 June 2013 was mainly due to the net repayment of borrowings and fi nance lease obligations.
Inventories decreased from S$4.9 million as at 30 June 2012 to S$3.9 million as at 30 June 2013 as a result of:
(a) reduction in sales;
(b) inventories written down of S$0.3 million; and
(c) inventories written off of S$0.2 million.
Trade receivables decreased from S$8.9 million as at 30 June 2012 to S$8.6 million as at 30 June 2013 was attributed
to the reduced sales. However, the collection day in FY 2013 is deteriorating compared to FY2012 which was mainly
due to the slower in the collection in our Singapore operation.
Assets classifi ed as held for sale increased from S$0.02 million as at 30 June 2012 to S$0.5 million as at 30 June 2013
attributed to our investment in Uzbekistan. We have decided to exit from Uzbekistan mainly due to the project is
slower than our initial projection and expectation.
Other receivables decreased from S$4.7 million as at 30 June 2012 to S$1.1 million as at 30 June 2013 mainly due to
the outstanding proceeds from the disposal of assets of S$3.3 million in our Thailand subsidiary which was received
in July 2012.
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