Full Report - Fraser and Neave Limited

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CHAIRMAN’S CHAIRMAN’S STATEMENT “During the year, the Company remained focused on Driving Value. This has been our raison d’etre since our formation in 1883 and explains why F&N has been able to stand the test of time. Your Board and Management recognise that the interests of all our stakeholders are best served when we are committed to creating long-term sustainable earnings growth for our shareholders.” Dr Michael Fam, Chairman 8 Fraser and Neave, Limited Annual Report 2006
I am very pleased to report that our management succession process has been smooth and that the Group was able to achieve another banner year. You may recall that I stepped down as Executive Chairman in January 2006 and at the Board’s request, I have stayed on as non-executive Chairman and consultant to ensure a seamless transition to a new management team. Dr Han Cheng Fong was appointed Group CEO in February 2006. This separation of roles of Chairman and CEO complies with best practice in Corporate Governance. FINANCIAL RESULTS During the year, the Company remained focused on Driving Value. This has been our raison d’etre since our formation in 1883 and explains why F&N has been able to stand the test of time. Your Board and Management recognise that the interests of all our stakeholders are best served when we are committed to creating long-term sustainable earnings growth for our shareholders. From FY01 to FY03, we have reduced our share capital by 23.6%, returning $578.7 million to shareholders. Despite a smaller capital base, we have steadily expanded the geographical footprint of our core businesses and intensified our presence in key markets. It is noteworthy that we were able to achieve consistent earnings growth over the past few years, whilst investing steadfastly for future growth. Earnings per share (before exceptional items) grew at a compound annual growth rate of 12.9% over the FY00 to FY06 period. Net asset value of the Group grew from $3.1 billion in FY00 to $3.6 billion in FY06, in spite of the return of capital to shareholders. In the year under review, the Group continued to register improvements in all the key measures of value creation for shareholders: • Group turnover was up 8.8%, to $3.8 billion. As explained in the Notes to The Financial Statements (page 91), Group turnover reflects our switch to proportionate consolidation of our joint ventures. • Group attributable profit before exceptional items (at $295.4 million) was 9.0% higher than the record earnings of the previous year. • Net asset value per share grew 15.8% to $3.07. • Assuming shareholders’ approval for the proposed final dividend, the dividend per share (net of tax) represents an increase of 9.1% to 12 cents. • Our share price rose 20% over the year ended 30 September 2006. During this period, the Straits Times Index was up 11%. Assuming a purchase of 1,000 shares of F&N at the start of the financial year, the total return on your investment, including dividends, would be about 23%. One important value-creating initiative during the year was the restructuring of three of our shopping malls for injection into Frasers Centrepoint Trust, which was successfully listed on the SGX-ST on 5 July 2006. This REIT vehicle will provide Frasers Centrepoint Ltd with a competitive edge when acquiring malls for growth. The Group has a 51% interest in Frasers Centrepoint Trust. I am happy to report that the sub-division of each F&N share into five shares on 4 July 2006 has succeeded in increasing the number of shareholders on our register. Based on the Register of Members as at 8 December 2006, we had a 65% increase to 9,141 shareholders. As anticipated, the reduced price of each share following the sub-division has increased the affordability of our shares, encouraged greater participation and broadened our shareholder base. We expect that the sub-division will enhance the market liquidity of our shares over time. DIVIDENDS The Directors recommend for shareholders’ approval, a final dividend of 8 cents per share. Due to the issuance of new shares (as explained under Subsequent Event), the final dividend will comprise 4 cents after deduction of Singapore tax at 20% and 4 cents 1-tier tax exempt. Taken with the interim dividend of 4 cents per share, this will give a total distribution of 12 cents, comprising 8 cents net of tax and 4 cents 1-tier tax exempt. Last year, the distribution was 11 cents per share, net of tax. Fraser and Neave, Limited Annual Report 2006 9
Page 1 and 2: Driving Value Fraser and Neave, Lim
Page 3 and 4: Driving Value Since its formation 1
Page 5 and 6: The strategy for growth based on th
Page 7 and 8: GROUP FINANCIAL HIGHLIGHTS Year end
Page 9: Driving Leadership Value Driving le
Page 13 and 14: INTERVIEW WITH GROUP CHIEF EXECUTIV
Page 15 and 16: One of the challenges for F&N has b
Page 17 and 18: MR STEPHEN LEE Mr Lee was appointed
Page 19 and 20: Fraser and Neave, Limited Annual Re
Page 21 and 22: A household name to consumers in Si
Page 23 and 24: F&N’S THREE CORE BUSINESSES: FOOD
Page 25 and 26: Delivering Prime Value Delivering g
Page 27 and 28: Frasers Centrepoint Limited is a le
Page 29 and 30: Fraser and Neave, Limited Annual Re
Page 31 and 32: Times Printers is one of the larges
Page 33 and 34: Overview Listed on the Singapore Ex
Page 35 and 36: OPERATING AND FINANCIAL REVIEW Food
Page 37 and 38: Dairies: Revenue and PBIT ($ millio
Page 39 and 40: The Group’s glass plant operation
Page 41 and 42: FRASERS CENTREPOINT TRUST - BUILDIN
Page 43 and 44: Residential Properties: Fraser Suit
Page 45 and 46: Office and Industrial Occupancy at
Page 47 and 48: OPERATING AND FINANCIAL REVIEW Publ
Page 49 and 50: OPERATING AND FINANCIAL REVIEW Trea
Page 51 and 52: As many of the risks factors identi
Page 53 and 54: AWARDS AND ACCOLADES The Group rece
Page 55 and 56: Developing People Value Developing
Page 57 and 58: The Group is committed to be a resp
Page 59 and 60: INDEX TO CORPORATE GORVERNANCE AND
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REPORT ON CORPORATE GOVERNANCE for
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REPORT ON CORPORATE GOVERNANCE Part
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REPORT ON CORPORATE GOVERNANCE Part
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DIRECTORS’ REPORT 3. DIRECTORS’
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DIRECTORS’ REPORT 5. SHARE OPTION
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DIRECTORS’ REPORT 7. AUDITORS The
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AUDITORS’ REPORT To the Members o
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BALANCE SHEET as at 30 September 20
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STATEMENT OF CHANGES IN EQUITY THE
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CASH FLOW STATEMENT for the year en
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NOTES TO THE FINANCIAL STATEMENTS f
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PARTICULARS OF GROUP PROPERTIES The
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PARTICULARS OF GROUP PROPERTIES (A)
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PARTICULARS OF GROUP PROPERTIES (B)
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PARTICULARS OF GROUP PROPERTIES (C)
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PARTICULARS OF GROUP PROPERTIES (D)
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FRASER AND NEAVE, LIMITED (Company
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8. “That approval be and is hereb
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FRASER AND NEAVE, LIMITED (Company
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FINANCIAL CALENDAR 25 January 2007
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Full Report - Fraser and Neave Limited

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