Operating and Financial Review by the
Investment Manager
TIH Limited
Annual Report 2014
3
The Company is an investment holding company primarily to invest in companies with capital appreciation
potential and the Company’s income is primarily derived from the realisation and/or the revaluation of its
investments in accordance with financial reporting standards.
As explained in Notes 2.5 and 3.1 of the Financial Statements, the Group had changed its accounting policy
pursuant to the amended
FRS 110 Consolidated Financial Statements - Investment Entities
effective 1 January
2014. Accordingly, the Group’s wholly owned subsidiaries, Little Rock Group Limited (“Little Rock”) and
Killian Court Pte. Ltd. (“Killian Court”), which are incorporated for investment holding purposes, are measured
as subsidiary at fair value through profit or loss. Any changes in the fair value of these two subsidiaries are taken
to the profit or loss statement.
On 30 December 2013, the Company announced its Proposed Internalisation Exercise and Dividend Package
which includes, among other things, the termination of the management agreement with Transpac Capital Pte
Ltd (the “former Investment Manager”), a dividend package consisting of an interim cash dividend of S$0.05
per ordinary share for the financial year ended 31 December 2013 (“Proposed Dividend”) and issuance of a three
bonus warrants (“Bonus Warrants”) for every one existing share held by entitled shareholders. On 9 January
2014, the Company proposed an issuance of zero coupon convertible bonds of up to S$18.9 million in principal
amount to Cosmic Ventures Limited (“Convertible Bonds”). All the above proposals were approved by the
shareholders during the extraordinary general meeting held on 29 April 2014.
Consequently, on 29 May 2014, the Company terminated the appointment of the former Investment Manager
and internalized the investment functions including, amongst others, engaging the employees of the former
Investment Manager. The management business of the Company was undertaken by TIH Investment
Management Pte. Ltd., a wholly-owned subsidiary incorporated in Singapore. Total cash dividend of S$11.72
million was paid on 22 May 2014 and a total of 702,942,318 bonus warrants were issued during the year of
which 5,511,479 bonus warrants (amounting to S$7.05 million) were exercised by shareholders.
As at 31 December 2014, the Group recorded a net asset value (“NAV”) of S$99.12 million (or S$0.41 per
share), a decrease of S$17.06 million from S$116.18 million (or S$0.50 per share) last year. The decrease in
NAV of S$17.06 million was mainly due to payment of the Proposed Dividend of S$11.72 million and fair value
loss on available-for-sale investments of S$15.34 million attributed to the decrease in fair value of Fortune Code
Limited and ACE International (BVI) Limited. The decrease was partially offset by proceeds of S$7.05 million
from Bonus Warrants exercised and S$2.1 million from the conversion of the Convertible Bonds Series A into
ordinary shares of the Company.
Net gains from investments of S$4.73 million in the profit or loss statement consists of mainly:
Net change in fair value of investments at fair value through profit or loss of S$2.68 million mainly due to
the following portfolio investments which are held through Little Rock and Killian Court:
(i)
gain from divestment of quoted shares in Comtec Solar Systems Group Limited of S$0.58 million;
(ii) increase in fair value of TIHT Investment Holdings Pte Ltd of S$1.73 million;
(iii) increase in fair value of Sanmin Road Limited of S$0.7 million;
(iv) increase in fair value of Batavia Enterprise Limited of S$0.35 million; and
(v)
increase in fair value of Garden Road Holding Limited of S$0.26 million.
