HONG FOK CORPORATION LIMITED
ANNUAL REPORT 2015
2
CHAIRMEN’S STATEMENT
DEAR SHAREHOLDERS,
On behalf of the Board of Directors, we are pleased to present the Annual Report of
HONG FOK CORPORATION LIMITED
(the “Company”) and its subsidiaries (the “Group”) for the financial year ended 31 December 2015 (“FY2015”).
In the interests of upholding good corporate governance, we have decided to early adopt the enhanced auditors’ report, which can be
found on pages 26 to 29 of this Annual Report. The auditors’ report is in a format that is required to be adopted by listed companies
only for audits of financial statements for periods ending on or after 15 December 2016. Shareholders should find that this improved
auditors’ reporting format enhances the level of transparency and the quality of information shared with shareholders and has the effect of
increasing the level of insight into and confidence in the audit of our financial statements.
REVIEW OF FY2015
In FY2015, the Group disposed of its shares in Winfoong International Limited (“WIL”), a company listed on The Stock Exchange of
Hong Kong Limited.
In the past 3 years, the WIL Group had generated stable but insignificant revenue from their property-related business, horticultural
services and securities trading business, and was loss making.
The sale of the WIL shares resulted in a gain of $82 million to the Group, of which $56 million was attributable to Owners of the Company.
The Group also recorded a gain of $136 million from the revaluation of its investment properties as at 31 December 2015, as assessed
by professional valuers.
The property cooling measures implemented by the government continued to have a negative effect on potential home buyers and
property investors in FY2015. Hence, the Group focused its attention on the leasing of the residential units of Concourse Skyline to
mitigate the effect of depressed sales of its residential properties.
With these significant gains in FY2015, the Group posted an increase in profit attributable to Owners of the Company of $119 million in
spite of a decrease in revenue of $37 million.
Our cash and cash equivalents increased from $93 million in the financial year ended 31 December 2014 to $164 million in FY2015 and
this contributed to a decrease in the Group’s gearing ratio from 0.36 times as at 31 December 2014 to 0.29 times as at 31 December 2015.
The Group’s net asset per share as at 31 December 2015 was $2.36 as compared to $2.10 per share as at 31 December 2014.
BONUS ISSUE AND DIVIDEND
The Group is committed to giving recognition and rewarding its shareholders for their continuing support and loyalty. Hence, the Board
has proposed a bonus share issue of one bonus share for every ten existing ordinary shares held by its shareholders. In addition, the
Board has decided to recommend a first and final 1-tier tax-exempt dividend of 1.0 cent per share for FY2015.
PROSPECTS
The Group expects the demand for the leasing of office and residential units in Singapore to remain healthy. With the Singapore property
cooling measures still in force and the uncertain economic outlook, the residential sales market is likely to remain sluggish.
The Group will strive to achieve good occupancy and rental rates on the leasing of its investment and development properties.
APPRECIATION
On behalf of the Board and management, we would like to thank Mr Tan Tock Han for his valuable contributions to the Group during his
years of service. Mr Tan resigned from the Board with effect from 18 May 2015.
On behalf of the Board, we thank our shareholders, tenants, customers, bankers and business associates for their continued support to
the Group.
We wish to express our sincere appreciation to members of the Board, the management and staff of the Group for their commitment,
dedication and hard work.
CHEONG PIN CHUAN
CHEONG SIM ENG
Joint Chairmen
