Untitled

M.V. “COS GLORY” 

Delivered on 8th June 1999 

Length (over all) 187.30m Depth (moulded) 16.10m 

Breath (moulded) 32.20m Deadweight 46,680mt 

Sanoyas Hishino Meisho Corporation 

MIZUSHIMA WORKS AND SHIPYPARD

Wei Jia Fu 

Chairman of the Board of Directors 

Cosco Investment (Singapore) Ltd. 

Mr. Wei Jia Fu was the first President of Cosco Investment (Singapore) Ltd from 1993 to 1995. In 1998, he was appointed Vice-Chairman 

of the Board and President of China Ocean Shipping (Group) Company.

President’s Statement 

Current Structure of Cosco 

Investment 

Cosco Investment (Singapore) 

Limited (“Cosco Investment”) is 

the listed Singapore arm of the 

China Ocean Shipping Group 

(“Cosco Group”). Considerable 

detail of the operations and financial 

position is contained elsewhere 

in this annual report and 

will not be repeated here, as far as 

possible. 

Cosco Investment itself is a holding 

company. The activities are 

carried on by its subsidiaries. 

The main subsidiaries and their 

2 Cosco Annual Report 2000 

businesses are listed below: 

• Cosco (Singapore) Pte Ltd: 

Owner and operator of ships; 

• Costar shipping Pte Ltd: 

Cosco agency (Singapore); 

• Coslink (Malaysia) Sdn Bhd: 

Cosco agency (Malaysia); 

• Harington Property Pte 

Ltd: Property owner and 

developer; 

• Cosco Marine Engineering 

(Singapore) Pte Ltd: Repair of 

vessels; 

• Cosco Trading (Singapore) Pte 

Ltd: General trading; and 

• Costo (S) Pte Ltd: Shipping 

and trading of bitumen. 

Shares and Gearing 

Cosco Investment’s share structure 

has been significantly altered 

over the last year: warrants were 

converted and the ordinary shares 

were split on the basis of 5 new 

shares of S$0.20 each for each old 

share of S$1. The total number of 

ordinary shares issued and paid 

up is now 556,802,250 shares 

of S$0.20 each amounting to 

S$111,360,450. 

As a result of these changes, 

Cosco Investment’s finances are 

now much healthier than in 1999 

(please refer to the audited

Balance Sheet). 

Performance in 2000 

The Group’s profit after tax 

attributable to members of the 

company increased mostly 

because of recovery of shipping 

market. Nevertheless, the Group’s 

turnover decreased, principally as 

a result of the reduction by the 

shipping business of less profitable 

lines of business. 

Profit before tax of the shipping 

business increased. The improvement 

was mainly attributable to 

higher freight rates and control 

of costs. 

The Group’s properties in China 

continue to make a contribution 

to profit. The residential property 

market in Singapore has 

improved compared to 1998, but 

commercial rentals in Singapore 

remain stable. The Group’s residential 

property in Singapore 

faced difficult market conditions 

when it was launched in January 

2001, but more than 20% of units 

have been sold already. 

Turnover and operating profit of 

the ship repairing business were 

higher as result of more fabrication 

jobs. 

Turnover of the “other” business 

segment rose as a result of the 

increased business by the Group’s 

general trading company. 

Management 

Management efforts to improve 

the financial position of the Company, 

which were started in 1999 

were completed in 2000. The 

capital structure of the Company 

has been improved and management 

changes have been made. 

Management has been working 

closely with the Cosco Group to 

consider ways in which Cosco 

Investment can be strengthened. 

The appointment of Mr Wei Jia 

Fu [the President of our ultimate 

parent (China Ocean Shipping 

(Group) Company)], as Chairman 

of Cosco Investment was a first 

step. The appointment of a new 

President has completed the 

process. 

The COSCO Group’s support for 

Cosco Investment will continue 

and we have confidence in the 

company’s future. 

Prospects 

Cosco Investment is focussing 

on expanding its shipping and 

shipping-related business. The 

Group, has through its two newly 

acquired subsidiaries, has purchased 

two Post-Panamax ships 

which will be delivered in April 

and June 2001 respectively. To 

this end, the company is still 

exploring the disposal of noncore 

and less profitable businesses 

in due course under favourable 

conditions. The Company has at 

the same time taken action to 

reduce its ratio of debt to equity, 

lower interest costs and set the 

company on a firmer financial 

footing. 

There are considerable opportunities 

in the region for shipping 

and particularly shipping-related 

businesses. In order to take 

advantage of these opportunities 

Cosco Investment needs to expand 

its capital base when necessary. 

This has been partially accomplished 

already. 

Management is also in the process 

of adding new, profitable businesses. 

Cosco Investment is also 

searching for suitable containerrelated 

logistical and transportation 

businesses in this region to 

invest. While the economies of 

the region are not yet fully recovered, 

this type of business should 

provide increasingly profitable 

opportunities. 

Management is, in addition, 

examining the possibilities offered 

by IT and internet-based 

business methodologies to the 

shipping industry. Singapore is 

making increasing use of these 

methodologies. Cosco Investment, 

as the regional representative 

of the Cosco Group should 

also play a part. Cosco Investment 

has to date acquired 

(through a wholly-owned subsidiary, 

Revo Technologies Ltd) a 

3% shareholding in Cosco network 

Limited, which will offer a 

business to business internet platform 

to provide services including 

a global e-commerce transportation, 

logistics and communications 

network. 

We expect the Group’s performance 

for 2001 to be maintained. 

We will endeavour to improve in 

the following years, as the shipping 

business is expanded and 

new related businesses are to be 

acquired. 

Ji Hai Sheng 

President 

Cosco Annual Report 2000 

3

Directors 


Wei Jia Fu 

Li Jian Hong Sun Yue Ying Yao Hong 

Lin Li Bing Liang Yan Feng 

Gu Qi Chang

Ji Hai Sheng 

Tom Yee Lat Shing Zhou Lian Cheng Lu Zhi Ming 

Xin Guang Wan Zhang Huai Ying Ji Ju Sheng 


5

Group Structure 

The subsidiaries and associated companies of 

Cosco Investment are set out below: 


Cosco 

Marine 

Serene Sky Greenery 

Shipping 

Dynamism 

Shipping 

Cosco 

Singapore 

Cos 

Glory 

Cosco 

Trading 

Cosco- 

Bundaberg 

Revo 

Technologies 

Cosco Investment 

(Singapore) Limited 

Cosem Harington 

Property 

Cosco 

Container 

Cosland 

(SR) 

Costar Coslink 

Costar 

Agencies 

CNF 

Shipping (S) 

CNF 

Shipping (M) 

Marlene Johnston Calzona 

COSTO

Corporate Executive Staff 

Yao Hong 

Vice President 

Ji Hai Sheng 

President 

Li Jian Xiong 

Vice President 

Teo Chuan Teck 

Financial Controller 


7

COSCO Investment Group’s Businesses 

Shipping 

The dry bulk shipping business 

is carried out through Cosco 

Investment’s wholly-owned 

subsidiary, Cosco Singapore 

(and its wholly-owned subsidiaries). 

At the end of 2000 the Group 

owned nine bulk carriers. 

(i) M.V. SEA PHOENIX 

A 1985-built 40,473 dwt bulk 

carrier acquired in March 1994 

at a purchase consideration of 

US$14.9 million (approximately 

S$23.6 million then). M.V. SEA 

PHOENIX is owned by Serene 

Sky, a wholly-owned subsidiary 

of Cosco Singapore. 

(ii) M.V. SEA SWAN 


carrier acquired in May 1994 



S$21.9 million then). M.V. 

SEA SWAN is owned by 

Greenery Shipping, a whollyowned 

subsidiary of Cosco 

Singapore. 

(iii) M.V. SEA CRANE 


carrier acquired in September 

1994 at a purchase consideration 

of US$15.8 million (approximately 

S$23.7 million then). 

M.V. SEA CRANE is owned by 

Cosco Singapore. 


(iv) M.V. JURONG SEA 


carrier acquired in July 1995 



S$20.4 million then). M.V. 

JURONG SEA is owned by 

Cosco Singapore. 

(v) M.V. COS ANGEL 


carrier acquired in May 1996 



S$20.4 million then). M.V. COS 

ANGEL is owned by Cosco 

Singapore. 

(vi) M.V. COS BONNY 

A new 46,864 dwt bulk carrier 

delivered in May 1996 at a 

purchase consideration of Yen 

2.43 billion (approximately 


BONNY is owned by Cosco 

Singapore. 

(vii) M.V. COS CHERRY 


delivered in November 1996 


Yen 2.43 billion (approximately 


CHERRY is owned by Cosco 

Singapore. 

(viii) M.V. COS FAIR 


delivered in April 1999 at a 

purchase consideration of Yen 

2.34 billion (approximately S$33 

million). M.V. COS FAIR is 

owned by Dynamism Shipping 

Corporation SA., a wholly-owned 

subsidiary of Cosco Singapore. 

(ix) M.V. COS GLORY 

A new 46,680 dwt (approximately) 

bulk carrier delivered in June 

1999 at a purchase consideration 

of Yen 2.34 billion (approximately 

S$33 million then). M.V. COS 

GLORY is owned by Cos Glory 

Shipping Inc., a wholly-owned 

subsidiary of Cosco Singapore. 

These nine carriers, together with 

chartered carriers, ply between 

major trading centres. Cosco 

Singapore has been awarded 

Approved International Shipping 

(AIS) enterprise status by the 

Trade Development Board in 

August 1993. Under this scheme, 

all qualifying shipping income of 

Cosco Singapore will be exempted 

from tax in Singapore for an 

initial period of ten years. 

Liu De Tian 

Managing Director 

Cosco (Singapore) Pte Ltd

Shipping-Related Businesses 

Shipping Agencies 

Costar Shipping Pte Ltd is the 

general agent in Singapore 

for the whole COSCO Group 

fleet (including all the vessels 

operated by the various 

COSCO Group subsidiaries). 

Costar’s services including 

marketing and 

canvassing, 

issuance of bills 

of lading and 

delivery orders, 

collection of 

freight, vessel 

Liu Hong Hai husbanding, 

Managing Director 

Costar Shipping Pte Ltd. 

customs declaration, 

port authority 

co-ordination, administration 

and settlement of cargo claims, 

and container logistic control. 

Having two subsidiaries in 

Pasir Gudang, Malaysia, Costar 

is able to link the major 

industrial areas of southern 

Malaysia with COSCO’s worldwide 

network. 

Coslink (Malaysia) Sdn Bhd is 

the general agent in Malaysia 

for the whole COSCO Group 

fleet (including all the vessels 

operated by the various COSCO 

Group subsidiaries). Coslink provides 

the same range of services 

for Malaysia as Costar provides 

for Singapore. 

Marine Engineering 

Cosco Marine Engineering 

(Singapore) Pte Ltd, a subsidiary 

of Cosco Investment, provides 

24-hour marine engineering 

and ship repair services from 

its 6,571 square metre waterfront 

site in Jurong as well as on 

board ships. 

Cosco Marine’s services include 

engine room work, steel work, 

repair of automation and 

hydraulic systems, air-condition- 

Wang Jun 

Managing 

Director 

Cosco-Marine 

Engineering 

(Singapore) 

Pte Ltd. 

ing and refrigeration work, 

electrical work, workshop 

machining and precision engineering 

work, and the supply 

of spare parts. 

Container Depot And 

Freight Handling 

Cosco Investment Group has 

a 50:50 joint-venture company, 

Cosem Pte Ltd, with Sembcorp 

Logistics Limited, Cosem, 

through its 80% owned subsidiary, 

Cosco Container Pte 

Ltd, manages and operates a 

container depot located in 

Jurong, Singapore to provide 

container storage capacity of 

around 4,000 TEU’s. 


9

On-Shore Businesses 

Property 

Cosco Investment Group is 

involved in property activities 

through its various subsidiaries, 

including Harington Property Pte 

Ltd. Harington both owns and 

develops property. 

Harington’s property portfolio 

includes offices, commercial property 

and residential property. 

Harington also manages some 

Singapore commercial and resi- 


Shi Jian 

Managing 

Director 

Cosco Trading 

(Singapore) 

Pte Ltd & 

Harrington 

Property Pte Ltd 

dential properties on behalf of 

an overseas client. 

Cosco Investment Group (through 

its subsidiaries Calzona and 

Johnston Investments) own 

commercial and residential 

properties in Shanghai. These 

properties provide a 12% net 

rental return on purchase price, 

confirmed by the COSCO 

Group for five years. Within 

this period Cosco Investment 

expects the property market in 

Shanghai to have recovered 

and moved up. 

Harington is also involved in 

property development, through 

its subsidiary, Cosland (SR) 

Development Pte Ltd. Cosland 

owns a 2,000 square metre 

residential site in Singapore, 

at Shanghai Road, off River 

Valley Road. Cosland is in the 

process of developing a 14-storey 

apartment block of 48 units. 

Construction will be completed in 

2001. 

General Trading 

Cosco Trading (Singapore) Pte Ltd, 

a subsidiary of Cosco Investment, is 

involved in general trading and vessel 

trading. Cosco Investment owns 

80% of the shares of Cosco 

Trading, with the remainder owned 

by Siang Moh Cold Storage 

(Singapore) Pte Ltd. 

In April 2000, Cosco set up a 

joint-venture company, Costo 

(Singapore) Pte Ltd, with Towa 

International Shipping Corporation 

to trade and ship bitumen.

Charts 

600 

550 

500 

450 

400 

350 

300 

250 

200 

150 

100 

50 

0 

TURNOVER 

440.794 

140.510 

574.780 

141.839 

325.129 

140.787 

NET ASSETS 

201.412 198.132 

10 

(S$million) 

161.931 

212.646 

1996 1997 1998 1999 2000 

8 

6 

4 

2 

0 

-2 

-4 

AFTER-TAX PROFIT 

2.985 

4.579 

2.681 

0.815 

(S$million) 

10.777 

1996 1997 1998 1999 2000 

10 

8 

6 

4 

2 

0 

-2 

-4 

EARNINGS 

PER SHARE 

(cents) 

0.6 

2.0 

2.0 

0.92 

0.54 1.0 

DIVIDENDS 

PER SHARE 

– GROSS (%) 

0.13 0.5 

2.5 

1.69 

1996 1997 1998 1999 2000 


11

Corporate Information 

Registered Office 

143 Cecil Street #11-01 

GB Building 

Singapore 069542 

Tel: 323 6623 Fax: 225 1392 Telex: RS 23999 COSIN 

E-Mail: enquiries@cosco.com.sg 

Company Secretary 

Lawrence Kwan 

Auditors 

PricewaterhouseCoopers 

Certified Public Accountants 

8 Cross Street #17-00 

PWC Building 


Partner in charge of audit: Mr. Chey Chor Wai 

Registrars and Transfer Office 

Kon Choon Kooi Pte Ltd 

47 Hill Street #06-02 

Chinese Chamber of Commerce & Industry Building 


12 Cosco Annual Report 2000

Directors’ Report 

– For the financial year ended 31 December 2000 

The directors present their report to the members together with the audited financial statements of the Company and 

of the Group for the financial year ended 31 December 2000. 

1. Directors 

The directors of the Company at the date of this report are: 

Wei Jia Fu 

Li Jian Hong (alternate director to Wei Jia Fu) 

Ji Hai Sheng (appointed 20 November 2000) 

Yao Hong (appointed 20 November 2000) 

Sun Yue Ying 

Lu Zhi Ming 

Tom Yee Lat Shing 

(appointed 12 June 2000) 

Zhou Lian Cheng (appointed 11 April 2001) 

Lin Li Bing (appointed 11 April 2001) 

Liang Yan Feng 

Gu Qi Chang 

(appointed 11 April 2001) 

Xin Guang Wan (alternate director to Zhou Lian Cheng, appointed 11 April 2001) 

Ji Ju Sheng (alternate director to Lin Li Bing, appointed 11 April 2001) 

Zhang Huai Ying (alternate director to Lu Zhi Ming, appointed 22 March 2001) 

Wang Kai Yuen (appointed 2 May 2001) 

2. Principal activities 

The principal activities of the Company are those of investment holding and provision of management services 

to the subsidiaries. The principal activities of its subsidiaries are set out in note 21(d) to the financial statements. 

There have been no significant changes in the nature of these activities during the financial year. 

3. Results for the financial year 

The consolidated profit after tax attributable to the members of the Company for the financial year was 

$10,777,347 (1999: $814,977). The Company made a profit after tax for the financial year of $4,326,515 (1999: 

$3,045,636). 

4. Material transfers to or from reserves and provisions 

There were no transfers to or (from) reserves during the financial year except as follows: 

The Group The Company 

$ $ 

Foreign currency translation reserve 

Net exchange differences arising on translation of 

financial statements of foreign subsidiaries 1,124,264 – 

Material movements in provisions are set out in the notes to the financial statements. 


13

Directors Report 


5. Acquisition and disposal of subsidiaries 

During the financial year, the Company acquired interests in the following subsidiaries: 

Net tangible assets Percentage of equity 

Name of subsidiary Consideration at date of acquisition acquired at date of acquisition 

$ $ % 

Revo Technologies Ltd 2 2 100 

Marlene International Ltd 2 2 100 

Costo (Singapore) Private Limited 1 1 50 

In addition, during the financial year, a subsidiary, CNF Shipping Agencies Pte Ltd was incorporated with an 

authorised and issued and paid-up share capital of $500,000 and $2 respectively. 

The principal activities of the subsidiaries are set out in note 21 to the financial statements. There were no other 

acquisitions or disposals of interests in subsidiaries during the financial year. 

6. Issue of shares and debentures 

(a) During the financial year, the changes in the authorised and issued and paid up share capital of the 

Company were as follows: 


(i) The Company reduced the par value per ordinary share from $1 to $0.20 by way of a share split of 

one ordinary share of $1 each to five ordinary shares of $0.20 each. Consequently, the authorised 

share capital of the Company has been changed from 250,000,000 ordinary shares at $1 each to 

1,250,000,000 ordinary shares at $0.20 each. 

(ii) The movements in the issued share capital of the Company during the financial year were as follows: 

Number of 

ordinary shares $ 

Issued ordinary share capital 

Balance at the beginning of the financial year 105,411,350 105,411,350 

Issue of 7,000 fully paid ordinary shares of $1 each on exercise 

of options granted under the Cosco Group Employees’ Share 

Option Scheme comprising 3,000 1997 

Options at $1 each and 4,000 1998 

Options at $1 each, for cash 7,000 7,000 

Issue of 5,942,100 fully paid ordinary shares of $1 each 

on the exercise of Warrants 2000 at $1 each, for cash 5,942,100 5,942,100 

Balance at the end of the financial year 111,360,450 111,360,450 

Sub-division of existing ordinary shares of $1 each into 

5 ordinary shares of $0.20 each 556,802,250 111,360,450 

As a result of the above share split, the conversion ratio of the existing RCCPS has been amended to 

mean the conversion ratio of five ordinary shares of $0.20 each for every RCCPS to be converted. 

The newly issued ordinary shares rank pari passu in all respects with the previously issued ordinary 

shares.



6. Issue of shares and debentures (continued) 

(b) During the financial year, in addition to the 2 subscribers’ shares of $1 each issued at par for cash in 

accordance with the Memorandum of Association, the subsidiary, Costo (Singapore) Private Limited issued 

another 99,998 ordinary shares of $1 each at par for cash to provide for additional working capital. The 

Group subscribed for 50,999 ordinary shares of $1 each of the additional shares, thereby increasing its 

equity interest from 50% to 51%. The newly issued shares rank pari passu in all respects with the 

previously issued shares. 

(c) During the financial year, the issued ordinary share capital of a wholly-owned subsidiary, Costar Agencies 

(M) Sdn. Bhd., was increased from RM100,000 to RM500,000 by the issue of 400,000 ordinary shares of 

RM1 each at par for cash to provide for additional working capital. The newly issued shares rank pari passu 

in all respects with the previously issued shares. 

(d) During the financial year, in accordance with the Memorandum of Association, the subsidiary, CNF 

Shipping Agencies Pte Ltd, issued 2 subscribers’ shares of $1 each at par for cash. 

(e) During the financial year, in accordance with the Memorandum of Association, the subsidiaries, Revo 

Technologies Ltd and Marlene International Ltd, each issued 1 subscriber’s share of US$1 each, at par for 

cash. 

(f) There were no other issues of shares or debentures by any other corporation in the Group during the 

financial year. 

7. Arrangements to enable directors to acquire shares and debentures 

Neither at the end of nor at any time during the financial year was the Company a party to any arrangement 

whose object was to enable the directors of the Company to acquire benefits by means of the acquisition of shares 

in, or debentures of, the Company or any other body corporate, other than as disclosed under paragraph 18 on 

“Share Options” set out on page 18 of this report. 


15



8. Directors’ interests in shares and debentures 

According to the register of directors’ shareholdings, none of the directors holding office at the end of the financial 

year had any interests in the shares in, or debentures of, the Company or any other related corporations at 

the beginning and at the end of the financial year. 

As recorded in the register of directors’ shareholdings, a director holding office at 31 December 2000 had interests 

in options to subscribe for ordinary shares of the Company granted pursuant to the Cosco Group Employees’ 

Share Option Scheme, as set out below: 

Number of unissued ordinary shares 

under option held by director 

Ordinary shares Ordinary shares 

of $0.20 each of $1 each 

At At 

31.12.2000 1.1.2000 

Tian Hong Qi (resigned on 22 March 2001) 

1999 Options 85,000 17,000 

1998 Options 135,000 27,000 

The number of unissued ordinary shares under option at the end of the financial year had been adjusted for the 

share split of one ordinary share of $1 each divided into five ordinary shares of $0.20 each. 

There was no change in any of the above mentioned interests between the end of the financial year and 21 January 

2001. 

9. Dividends 

Dividends paid, declared and proposed since the end of the Company’s preceding financial year are as follows: 

Ordinary Shares 

A first and final dividend of 0.5 cents per ordinary share of $1 each, net of tax at 25.5%, which amounted to 

$414,818 was paid on 17 July 2000 in respect of the financial year ended 31 December 1999 as proposed in the 

Directors’ Report for that year. 

A proposed first and final dividend of 0.5 cents per ordinary share of $0.20 each recommended by the directors, 

net of tax at 24.5%, amounting to $2,101,928 in respect of the financial year ended 31 December 2000. The 

amount of dividend payable may be increased in the event that share options set out in paragraph 18 are exercised 

before the share transfer register is closed for dividend entitlement. 




9. Dividends (continued) 

Preference Shares 

A fixed cumulative preferential dividend of 5.7 cents per share per annum net of tax of 25.5%, which amounted 

to $1,420,586 paid on 15 November 2000 of which an amount of $176,382 was accrued in the year ended 31 

December 1999. 

An accrued fixed cumulative preferential dividend of 5.7 cents per share per annum, net of tax of 24.5% amounting 

to $179,959. 

10. Bad and doubtful debts 

Before the financial statements of the Company were made out, the directors took reasonable steps to ascertain 

that proper action has been taken in relation to the writing off of bad debts and providing for doubtful debts of 

the Company, and have satisfied themselves that there were no known bad or doubtful debts. 

At the date of this report, the directors are not aware of any circumstances which would render any amounts 

written off for bad debts or provided for doubtful debts in the consolidated financial statements of the Group 

inadequate to any substantial extent. 

11. Current assets 

Before the financial statements of the Company were made out, the directors took reasonable steps to ascertain 

that current assets which were unlikely to realise their book value in the ordinary course of business have been 

written down to their estimated realisable value or that adequate provision has been made for the diminution in 

value of such current assets. 

At the date of this report, the directors are not aware of any circumstances, not otherwise dealt with in this report, 

which would render the value attributed to current assets in the consolidated financial statements misleading. 

12. Charges on assets and contingent liabilities 

At the date of this report, no charges have arisen since the end of the financial year on the assets of the Company 

or any other corporation in the Group which secure the liability of any other person, nor have any contingent 

liability arisen since the end of the financial year in the Company or any other corporation in the Group. 

13. Ability to meet obligations 

No contingent or other liability of the Company or any other corporation in the Group has become enforceable 

or is likely to become enforceable within the period of twelve months after the end of the financial year which, 

in the opinion of the directors, will or may substantially affect the ability of the Company and the Group to meet 

their obligations as and when they fall due. 

14. Other circumstances affecting the financial statements 

At the date of this report, the directors are not aware of any circumstances not otherwise dealt with in this report 

or the consolidated financial statements which would render any amount stated in the financial statements of the 

Company and the consolidated financial statements misleading. 


17



15. Unusual items 

In the opinion of the directors, the results of the operations of the Company and of the Group during the financial 

year have not been substantially affected by any item, transaction or event of a material and unusual nature. 

16. Unusual items after the financial year 

Except as disclosed in note 36 to the financial statements, in the opinion of the directors, no item, transaction or 

event of a material and unusual nature has arisen in the interval between the end of the financial year and the date 

of this report which would affect substantially the results of the operations of the Company and of the Group for 

the financial year in which this report is made. 

17. Directors’ contractual benefits 

Since the end of the previous financial year, no director has received or become entitled to receive a benefit (other 

than as disclosed in the consolidated financial statements and in this report) by reason of a contract made by the 

Company or a related corporation with the director or with a firm of which he is a member or with a company 

in which he has a substantial financial interest, except that certain directors have employment relationships 

with the ultimate holding corporation or related corporations and have received remuneration from those 

corporations. 

18. Share options 

Cosco Group Employees’ Share Option Scheme 

(a) The Cosco Group Employees’ Share Option Scheme (“the Scheme”) was approved by the members of the 

Company at an Extraordinary General Meeting on 13 May 1995. Particulars of the options granted in 1995 

known as the “1995 Options” under the Scheme were set out in the Directors’ Report for the financial year 

ended 31 December 1995. The 1995 Options expired on 19 May 2000. 

(b) No share options were granted in 1996. 

(c) Particulars of the options granted in 1997, 1998 and 1999 known as the “1997 Options”, “1998 Options” 

and “1999 Options” respectively under the Scheme were set out in the Directors’ Report for the respective 

years ended 31 December 1997, 31 December 1998 and 31 December 1999. 

(d) No share options were granted during the financial year. 




18. Share options (continued) 

Unissued ordinary shares under options 

As at the end of the financial year, there remain the following unissued ordinary shares under option: 

Number Number 

Number exercised cancelled/ Number 

outstanding during lapsed during Effect of outstanding Exercise 

at 1.1.2000 the year the year share split at 31.12.2000 price/share 

$ 

Expiry date 

1995 Options 231,000 – (231,000) – – 0.336 19 May 2000 

1997 Options 643,000 (3,000) (20,000) 3,100,000 3,100,000 0.20 29 September 2002 

1998 Options 1,107,000 (4,000) (18,000) 5,425,000 5,425,000 0.20 9 November 2003 

1999 Options 781,000 – (11,000) 3,850,000 3,850,000 0.2288 30 September 2004 

Warrants 2000 7,358,650 (5,942,100) (1,416,550) – – 0.20 21 January 2000 

10,120,650 (5,949,100) (1,696,550) 12,375,000 12,375,000 

The exercise prices for 1997 Options, 1998 Options and 1999 Options have been adjusted for the share split of 

one ordinary share at $1 each for five ordinary shares at $0.20 each. 

The holders of the 1997 Options, 1998 Options and 1999 Options have no right to participate by virtue of these 

options in any share issue of any other company in the Group. 

Saved as disclosed in paragraph 6 of this report, no shares have been issued during the financial year by virtue of 

the exercise of options to take up unissued shares of the Company. 

Other information required by the Singapore Exchange 

Pursuant to Clause 947 (Practice Note No. 9H) of the Listing Manual of the Singapore Exchange, in addition to 

information disclosed elsewhere in the report, it is reported that during the financial year: 

(a) The Committee administering the share option schemes comprises directors Tom Yee Lat Shing and Micky 

Kon Hong Shin. Subsequent to the resignation of Micky Kon Hong Shin after the financial year end, Wang 

Kai Yuen and Ji Ju Sheng have been appointed to administer the scheme, in addition to Tom Yee Lat Shing. 

(b) The details of options granted to a director under the scheme are as follows: 

Aggregate options Aggregate options 

granted since exercised since Aggregate options 

commencement of commencement of outstanding at 

Name scheme to 31.12.2000 scheme to 31.12.2000 31.12.2000 

Tian Hong Qi 220,000 – 220,000 

(c) There were no unissued shares under option for subsidiaries at the end of the financial year. 


19



19. Audit committee 

The Audit Committee carried out its functions in accordance with Section 201B(5) of the Companies Act, including 

a review of the financial statements of the Company and of the Group for the financial year and the auditors’ 

report thereon. The nature and extent of the functions performed by the Audit Committee are further described 

in the Corporate Governance Report. 

The Audit Committee has nominated PricewaterhouseCoopers for re-appointment as auditors of the Company at 

the forthcoming Annual General Meeting. 

20. Auditors 

The auditors, PricewaterhouseCoopers have expressed their willingness to accept re-appointment. 

On behalf of the directors 

JI HAI SHENG GU QI CHANG 

Director Director 

3 May 2001 


Corporate Governance 

Report on Corporate Governance 

The Directors and Management believes in maintaining a high standard of corporate governance. In line with the Best 

Practices Guide issued by the Singapore Exchange Securities Trading Limited (“SGX-ST”), the Company has incorporated 

these into its own Codes of Best Practices in relation to the roles and responsibilities of the Audit Committee and 

Dealings in Securities. 

The Board of Directors 

The Board of Directors comprises eleven Directors, two of whom are Independent Directors. 

Apart from its statutory responsibilities, the Board is responsible for the proper management of the Company. They are 

also committed to increase the level of corporate governance in the Company. The Board reviews the financial performance 

and business of the Company and of the Group, including the approval of annual and interim results, material 

agreements, related parties transactions, budget and long term plans. 

Other Committees of the Board include an Audit Committee and the Employee Share Option Scheme Committee. All 

Committees function within formal terms of reference. 

Audit Committee 

The Audit Committee comprises Mr Tom Yee Lat Shing (Chairman), Dr Wang Kai Yuen and Mr Lu Zhi Ming (Alternate: 

Mdm Zhang Huaiying). Mr Yee and Dr Wang are Independent Directors within the meaning of Section 201B of the 

Companies Act. Dr Wang Kai Yuen was appointed member of the Audit Committee on 2 May 2001. The Audit 

Committee meets at least twice a year. 

The financial statements, accounting policies and system of internal accounting records are the responsibilities of the 

Board of Directors acting through the Audit Committee. To enable the Audit Committee to discharge its functions more 

effectively, Foo, Kon & Tan Consultants Pte Ltd was appointed as internal auditor of the Company. 

The Internal Auditor assist the Audit Committee in its functions as follows:- 

• Reviewing internal regulatory controls and conducting audits to ensure that:- 

i. assets are sufficiently safeguarded; 

ii. adequate procedures are put in place to ensure the reliability and accuracy of financial and management 

information system; 

iii. corporate policies and procedures are adhered to; and 

iv. operational procedures and standards are in line with the principle of segregation of duties; standards of 

integrity are maintained, and there are adequate internal checks and balances. 

• Highlighting to the management any inadequacy in the internal control system with a view to rectification or 

improvement, and reporting the management’s responses or decisions on any such matters of material importance to 

the Audit Committee. 

• Reviewing interested person transactions to ensure compliance with the requirements of the SGX-ST. 


21

Corporate Governance 

The Committee reviewed the scope of work of both internal and external auditors and the assistance given by the 

Company’s officers to the auditors. It met with the Company’s external and internal auditors to discuss the results of 

their respective examinations and the internal auditor evaluation of the Group’s system of internal accounting controls. 

The internal auditor and management reviewed the Group’s operations on an on-going basis. The Committee also 

reviewed the half-yearly and annual results announcement of the Company and the Group, and the financial statements 

of the Group for the financial year ended 31 December 2000 as well as the auditors’ report thereon before they were 

submitted to the Board for approval. 

The Audit Committee has full access to both the external and internal auditors and has been given reasonable resources 

to enable it to discharge its functions. 

The Committee has recommended to the Board of Directors that the auditors, PricewaterhouseCoopers, Certified Public 

Accountants, be nominated for re-appointment as auditors at the forthcoming Annual General Meeting of the Company. 

Employee Share Option Scheme Committee 

The Employee Share Option Scheme Committee comprises three members, two of whom are independent of 

management: 

Dr Wang Kai Yuen (Chairman) 

Mr Tom Yee Lat Shing 

Mr Ji Ju Sheng 

Dr Wang Kai Yuen was appointed Chairman and member of the Committee on 2 May 2001. The Committee is responsible 

for the administration of the Employee Share Option Scheme of the Company. Members of the Committee do not 

participate in the Employee Share Option Scheme. 

Dealings in Securities 

The Company has issued its Code of Best Practices on Securities Transactions by officers of the Company modeled, with 

some modification, after the Best Practices Guide issued by the SGX-ST. It provides guidance for directors and employees 

on their dealings in the Company’s securities. The Company’s officers will also be reminded not to trade in the 

Company’s own securities during the restricted periods. A system of reporting of securities dealings by Directors and 

staff has been established to monitor the dealings of these parties in the securities of the Company. 

TOM YEE LAT SHING WANG KAI YUEN 


3 May 2001 

Chairman 


Statement by Directors 

In the opinion of the directors, the financial statements set out on pages 25 to 75 are drawn up so as to give a true and 

fair view of the state of affairs of the Company and of the Group at 31 December 2000 and of the results of the 

business, and changes in equity of the Company and of the Group and the cash flows of the Group for the financial year 

then ended, and at the date of this statement, there are reasonable grounds to believe that the Company will be able to 

pay its debts as and when they fall due. 

On behalf of the directors 

JI HAI SHENG GU QI CHANG 


3 May 2001 


23

Auditors’ Report to the Members of 

Cosco Investment (Singapore) Limited 

We have audited the financial statements of Cosco Investment (Singapore) Limited and the consolidated financial statements 

of the Group for the financial year ended 31 December 2000 set out on pages 25 to 75. These financial statements 

are the responsibility of the Company’s directors. Our responsibility is to express an opinion on these financial 

statements based on our audit. 

We conducted our audit in accordance with Singapore Standards on Auditing. Those Standards require that we plan and 

perform our audit to obtain reasonable assurance whether the financial statements are free of material misstatement. An 

audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. 

An audit also includes assessing the accounting principles used and significant estimates made by the directors, as well 

as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our 

opinion. 

In our opinion, 

(a) the accompanying financial statements of the Company and consolidated financial statements of the Group are 

properly drawn up in accordance with the provisions of the Singapore Companies Act (“Act”) and Singapore 

Statements of Accounting Standard and so as to give a true and fair view of: 

(i) the state of affairs of the Company and of the Group at 31 December 2000, the profit and changes in equity 

of the Company and of the Group, and the cash flows of the Group for the financial year ended on that 

date; and 

(ii) the other matters required by Section 201 of the Act to be dealt with in the financial statements of the 

Company and the consolidated financial statements of the Group; and 

(b) the accounting and other records, and the registers required by the Act to be kept by the Company and by those 

subsidiaries incorporated in Singapore of which we are the auditors have been properly kept in accordance with 

the provisions of the Act. 

We have considered the financial statements and auditors’ reports of all subsidiaries of which we have not acted as 

auditors, being financial statements included in the consolidated financial statements. The names of these subsidiaries 

are stated in note 21 to the financial statements. 

We are satisfied that the financial statements of the subsidiaries that have been consolidated with the financial statements 

of the Company are in form and content appropriate and proper for the purposes of the preparation of the consolidated 

financial statements and we have received satisfactory information and explanations as required by us for those 

purposes. 

The auditors’ reports on the financial statements of the subsidiaries were not subject to any qualification and in respect 

of subsidiaries incorporated in Singapore did not include any comment made under Section 207(3) of the Act. 

PricewaterhouseCoopers 

Certified Public Accountants 

Singapore, 3 May 2001 


Income Statements 



2000 1999 2000 1999 

Notes $ $ $ $ 

Sales 3 161,930,787 201,411,887 3,563,246 5,143,792 

Cost of sales (126,868,334) (178,669,702) – – 

Gross profit 35,062,453 22,742,185 3,563,246 5,143,792 

Other operating income 1,096,755 3,773,765 253,763 10,170 

Distribution costs (1,359,900) (1,051,223) – – 

Administrative expenses (9,699,144) (8,573,838) (1,860,066) (1,663,326) 

Other operating expenses (215,086) (50,696) – (26,937) 

Operating profit 4 24,885,078 16,840,193 1,956,943 3,463,699 

Finance income 5 5,769,943 2,622,958 6,731,874 3,450,516 

Finance costs 

Share of results of associated 

6 (15,252,134) (14,237,106) (2,220,202) (3,411,815) 

companies (35,425) (27,340) – – 

Profit before tax 15,367,462 5,198,705 6,468,615 3,502,400 

Tax 8 (3,555,343) (1,441,785) (2,142,100) (456,764) 

Profit from ordinary activities 11,812,119 3,756,920 4,326,515 3,045,636 

Minority interest (1,034,772) (2,941,943) – – 

Net profit 10,777,347 814,977 4,326,515 3,045,636 

Earnings per ordinary share (cents) 9 

Basic 1.69 0.13 

Diluted 1.49 0.13 

The accompanying notes form an integral part of these financial statements. 

Auditors’ Report – Page 24. 


25

Balance Sheets 

– As at 31 December 2000 



Notes 2000 1999 2000 1999 

$ $ $ $ 

Current assets 

Bank and cash balances 10 9,985,808 6,552,012 332,400 507,259 

Fixed deposits with financial institutions 10 17,906,798 66,974,137 4,027,266 52,931,588 

Trade debtors 11 12,869,028 17,551,065 – – 

Due by immediate holding company – 8,726 – 262,979 

Due by subsidiaries 21 – – 3,122,433 2,065,051 

Due by related corporations - trade 8,100,839 20,846,849 – – 

- non-trade 348,923 404,066 348,923 404,066 

Due by related parties - non-trade – 95,130 – – 

Due by an associated company - trade 286,974 530,537 – – 

Due by minority shareholders - trade 90,635 77,061 – – 

Short-term investments 12 – – – – 

Income tax receivable 8 – – 185,391 917,073 

Inventories 13 1,432,459 1,563,049 – – 

Trading property 14 771,937 841,937 – – 

Development property 15 53,988,741 46,612,112 – – 

Other debtors 16 1,984,103 1,442,601 337,837 559,858 

107,766,245 163,499,282 8,354,250 57,647,874 

Non-current assets 

Non-trade debtor 17 1,091,017 1,008,103 – – 

Loan to a related company 18 22,010,805 21,141,540 22,010,805 21,141,540 

Investments 19 2,530,846 592,357 337,260 337,260 

Associated companies 20 886,576 932,713 1,000,000 1,000,000 

Subsidiaries 21 – – 178,382,185 167,283,922 

Investment properties 22 95,937,345 95,503,478 – – 

Fixed assets 23 246,479,573 252,326,232 151,044 175,939 

368,936,162 371,504,423 201,881,294 189,938,661 

Total assets 476,702,407 535,003,705 210,235,544 247,586,535 

Current liabilities 

Trade creditors 17,267,953 20,280,032 – – 

Bank borrowings 24 66,522,003 90,154,960 2,975,502 49,980,000 

Due to ultimate holding corporation 

- trade 25 5,623,077 5,954,659 – – 

Due to immediate holding company 25 78,456 – 41,181 – 

Due to related parties - trade 13,011 215,803 – – 

Due to related corporations - trade 5,585,662 5,063,063 – – 

Short-term advance from an associated 

company 500,000 500,000 500,000 500,000 

Short-term advance from a subsidiary 21 – – 6,851,275 – 

Other creditors 26 12,230,649 11,485,637 238,817 1,514,225 

Hire purchase creditors 27 27,660 – – – 

Current tax 8 2,010,607 1,364,908 – – 

Proposed dividend (net) 2,281,887 591,200 2,281,887 591,200 

112,140,965 135,610,262 12,888,662 52,585,425 


Auditors’ Report – Page 24.

Balance Sheets 

– As at 31 December 2000 


Notes 2000 1999 2000 1999 

$ $ $ $ 

Non-current liabilities 

Bank borrowings 24 144,285,337 192,800,193 5,203,500 6,247,500 

Loans from immediate holding company 25 

Loan from a minority shareholder 

2,955,431 5,209,122 1,220,930 3,543,122 

of a subsidiary 28 3,730,441 2,988,533 – – 

Loan from a subsidiary – – – 1,666,000 

Purchase of club membership 139,040 149,600 139,040 149,600 

Hire purchase creditors 27 119,173 – – – 

Deferred tax 8 685,563 113,500 639,000 – 

151,914,985 201,260,948 7,202,470 11,606,222 

Total liabilities 264,055,950 336,871,210 20,091,132 64,191,647 

Net assets 212,646,457 198,132,495 190,144,412 183,394,888 

Shareholders’ equity 

Share capital 29 111,694,983 105,745,883 111,694,983 105,745,883 

Reserves 30 65,291,734 64,167,470 61,183,940 61,183,940 

Retained profits 

Interests of shareholders of Cosco 

31,749,313 24,498,057 17,265,489 16,465,065 

Investment (Singapore) Limited 208,736,030 194,411,410 190,144,412 183,394,888 

Minority interests 3,910,427 3,721,085 – – 



212,646,457 198,132,495 190,144,412 183,394,888 


27

Consolidated Statement of Changes in Equity 



Notes Share Retained 

capital Reserves profits Total 

$ $ $ $ 

Balance at 1 January 2000 105,745,883 64,167,470 24,498,057 194,411,410 

Foreign currency translation 

differences 30 – 1,124,264 – 1,124,264 

Net profit for the financial year – – 10,777,347 10,777,347 

Total recognised gains for the 

financial year – 1,124,264 10,777,347 11,901,611 

Dividends for 2000 31 – – (3,526,091) (3,526,091) 

Issue of share capital 29 5,949,100 – – 5,949,100 

Balance at 31 December 2000 111,694,983 65,291,734 31,749,313 208,736,030 


Currency translation differences – 264,578 – 264,578 

Net profit for the financial year – – 814,977 814,977 

Total recognised gains for the 

financial year – 264,578 814,977 1,079,555 

Dividends for 1999 31 – – (592,503) (592,503) 

Issue of share capital 

Expenses incurred on the issue 

29 5,712,033 49,845,392 – 55,557,425 

of RCCPS 30 – (366,566) – (366,566) 




Statement of Changes in Equity– Company 


Notes Share Retained 

capital Reserves profits Total 

$ $ $ $ 



Dividends for 2000 31 – – (3,526,091) (3,526,091) 

Issue of share capital 29 5,949,100 – – 5,949,100 




Dividends for 1999 31 – – (592,503) (592,503) 

Issue of share capital 

Expenses incurred on the issue 

29 5,712,033 49,845,392 – 55,557,425 

of RCCPS 30 – (366,566) – (366,566) 





29

Consolidated Cash Flow Statement 



2000 1999 

$ $ 

Cash flows from operating activities 

Profit before tax and share of results of associated company 

Adjustments for: 

15,402,887 5,226,045 

Depreciation of fixed assets 16,211,644 14,816,272 

Depreciation of investment properties 1,320,579 1,305,846 

Provision for diminution in value of short-term investments – 29,723 

Exchange differences (11,105,414) (2,567,033) 

(Profit)/loss on disposal of fixed assets (net) (9,698) 28,333 

Fixed assets written off – 19,809 

Interest expense (financing) 14,413,334 14,237,106 

Interest income (investing) 

Provision/(writeback of provision) for losses on 

(1,772,265) (1,356,872) 

development property 84,000 (1,700,000) 

Writedown/(writeback) in value of a trading property 70,000 (150,000) 

Preliminary and pre-operating expenses written off 7,298 31,230 

Operating cash flow before working capital changes 

Changes in working capital: 

34,622,365 29,920,459 

Development property (7,460,629) (2,722,822) 

Inventories 130,590 408,277 

Debtors 16,838,788 (8,481,522) 

Creditors (1,141,551) (9,544,640) 

Cash generated from operations 42,989,563 9,579,752 

Income tax paid (2,326,981) (2,185,084) 

Net cash inflow from operating activities 40,662,582 7,394,668 

Cash flows from investing activities 

Proceeds from disposal of fixed assets 130,331 201,863 

Payments for purchase of fixed assets (860,868) (54,212,994) 

Dividend received from an associated company – 37,000 

Interest income 2,139,077 987,170 

Increase in preliminary and pre-operating expenses (7,298) – 

Purchase of long-term investments (1,734,500) – 

Purchase of club membership (203,240) – 

Minority interest in a newly acquired subsidiary 49,000 – 

Net cash outflow from investing activities (487,498) (52,986,961) 



Consolidated Cash Flow Statement 


2000 1999 

$ $ 

Cash flows from financing activities 

(Repayment of)/increase in bank loans (76,120,056) 46,258,859 

Increase in/(repayment of) hire purchase creditors 146,833 (96,534) 

Increase in loans from minority shareholders of subsidiaries 741,908 484,949 

Dividends paid to shareholders of the Company (1,835,405) (741,553) 

Dividends paid by subsidiaries to minority shareholders (926,831) (1,279,067) 

(Repayment of)/loan from immediate holding company (2,253,691) 2,718,377 

Proceeds from issue of ordinary shares 5,949,100 5,377,500 

Proceeds from issue of RCCPS – 49,813,358 

Interest expense (15,482,728) (11,667,296) 

Net cash (outflow)/inflow from financing activities (89,780,870) 90,868,593 

Net (decrease)/increase in cash and cash equivalent held (49,605,786) 45,276,300 

Cash and cash equivalent at the beginning of the financial year 66,128,806 20,852,506 

Cash and cash equivalent at the end of the financial year 16,523,020 66,128,806 

Cash and cash equivalent represented by: 

Bank and cash balances 9,985,808 6,552,012 

Fixed deposits with financial institutions 17,906,798 66,974,137 

Bank overdrafts (11,369,586) (7,397,343) 


Auditors’ Report – Page 24 

16,523,020 66,128,806 


31

Notes to the Financial Statements 


These notes form an integral part of and should be read in conjunction with the accompanying financial statements. 

1. General 

The Company is domiciled and incorporated in Singapore and is listed on the Singapore Exchange. The 

financial statements of the Company and of the Group are expressed in Singapore dollars. The address of 

the Company’s registered office is: 


143 Cecil Street 

#11-01 GB Building 


The principal activities of the Company are those of investment holding and provision of management services 

to the subsidiaries. The principal activities of its subsidiaries are set out in note 21(d) to the financial statements. 

2. Significant accounting policies 

(a) Basis of preparation 

The financial statements are prepared in accordance with the historical cost convention. 

The financial statements are prepared in accordance with and comply with Singapore Statements of 

Accounting Standard. 

(b) Basis of consolidation 

The consolidated financial statements include the financial statements of the Company and all its 

subsidiaries made up to the end of the financial year. The results of subsidiaries acquired or disposed of 

during the financial year are included in or excluded from the consolidated income statement from the date 

of their acquisition or disposal. Intercompany balances and transactions and resulting unrealised profits are 

eliminated in full on consolidation. Where the accounting policies of the subsidiaries do not conform with 

those of the Group, adjustments are made on consolidation where the amounts involved are considered 

significant to the Group. 

(c) Foreign currencies 

Transactions in foreign currencies during the financial year are converted to Singapore dollars at the rates 

of exchange prevailing on the transaction dates. Foreign currency monetary assets and liabilities are translated 

into Singapore dollars at the rates of exchange prevailing at the balance sheet date or at contracted 

rates where they are covered by forward exchange contracts. Exchange differences arising are taken to the 

income statements. 

For the purpose of consolidation of foreign subsidiaries whose operations are not an integral part of the 

Company’s operation, the balance sheets are translated into Singapore dollars at the exchange rates prevailing 

at the balance sheet date, and the results are translated using the weighted average exchange rates 

for the financial year. The exchange differences arising on translation are taken directly to the foreign currency 

translation reserve. 

Certain subsidiaries of the Group have adopted the United States dollar as the functional currency to record 

their transactions since all their revenues and bulk of expenses are transacted in United States dollars. The 

financial records of these subsidiaries are maintained in United States dollars.



2. Significant accounting policies (continued) 

The financial statements of these subsidiaries which are maintained in United States dollars are expressed in 

Singapore dollars by translating all assets and liabilities, with the exception of share capital and retained 

profits, at the rate of exchange prevailing at the balance sheet date and the results are translated using the 

weighted average exchange rates for the financial year. Share capital and opening reserves are translated at 

historical rates. The exchange differences arising on translation are taken directly to the foreign currency 

translation reserve. 

(d) Revenue recognition 

(i) Shipping 

Income from voyage charters is recognised when a voyage is completed based on the complete discharge 

of cargoes at the last port of call whilst income from time charters is recognised over the period 

of the time charter agreement on an accrual basis. Any losses arising from voyage or time charters 

are provided for as soon as they are anticipated. 

Booking commission, agency and transhipment fees are recognised upon the rendering of services to 

vessels. Container cargo handling fee is recognised upon the discharge of inward cargo. 

(ii) Ship repairing and marine related activities 

Revenue from ship repairing, marine engineering, container repairs and services, fabrication works services 

and production of marine outfitting components is recognised upon completion of the jobs as 

certified by the service engineers. 

(iii) Rental of property and property trading 

Revenue from the sale of trading properties is recognised when legal title passes to the buyer. 

Commission income from trading properties is recognised upon the conclusion of the sale and 

purchase agreement between the vendor and purchaser. 

Rental income arising from investment properties is recognised on a straight line basis over the 

period of rental. 

(iv) Property under development 

Profit on the sale of properties under development is recognised on a completed contract method 

basis. 

(v) Others 

Dividend income is recorded gross in the income statement in the accounting period in which a 

dividend is declared payable by the investee company or, in the case of subsidiaries, in respect of 

which it is proposed. 

Interest income is accrued on a day to day basis. 

Revenue from the sale of goods is recognised upon delivery to customers, net of goods and services 

tax and sales returns. 


33




(e) Taxation 


Tax expense is determined on the basis of tax effect accounting using the liability method. Deferred taxation 

is provided on significant timing differences arising from the different treatments in accounting and 

taxation of relevant items except where it can be demonstrated with reasonable probability that the tax 

deferral will continue for the foreseeable future. 

In accounting for timing differences, deferred tax assets are not recognised unless there is reasonable 

expectation of their realisation. 

(f) Bad and doubtful debts 

Bad debts are written off and specific provisions are made for those debts considered to be doubtful. 

(g) Inventories 

Inventories are stated at the lower of cost and net realisable value. Cost is calculated on a weighted 

average cost basis or specific identification method basis where appropriate. Net realisable value is the price 

at which the inventories can be realised in the normal course of business after allowing for the costs of 

realisation. Provision is made where necessary for obsolete, slow-moving and defective inventories. 

Contract work-in-progress is stated at cost comprising direct materials and subcontractor labour costs. 

Profits are recognised in the financial statements when these contracts are completed. Provision is made 

for all losses expected to arise on completion of projects. 

(h) Trading property 

Trading property is held for sale in the ordinary course of business and is stated at the lower of cost and 

estimated net realisable value. Cost of the trading property comprises its purchase price and any directly 

attributable costs of bringing these assets for sale. 

(i) Development property 

Development property is stated at the lower of cost, less progress payments received and receivable, and 

net realisable value. Cost includes cost of land and other direct and related expenditure, including interest 

on borrowings, incurred in developing the property. 

For this purpose, the interest rate applied to funds provided for developing the property is arrived at by 

reference to the actual rate payable on borrowings for development purposes. The capitalisation of interest 

charges will cease upon receipt of Temporary Occupation Permit. 

Profit on the sale of units in the development property is recognised in the financial statements on the issue 

of Temporary Occupation Permit in respect of units completed and sold. Provision is made in full for any 

foreseeable losses.




(j) Investments 

(i) Long-term investments 

Long-term investments, including the investments in subsidiaries and associated companies in the 

financial statements of the Company, are stated at cost and provision is made for any permanent 

diminution in value of the investments determined on an individual basis. Profits or losses on disposal 

of long-term investments are taken to the income statement. 

(ii) Investment properties 

Investment properties are those properties which are held on a long-term basis for their investment 

potential and for the generation of rental income. These properties are stated at cost and are depreciated 

on a straight-line basis over the expected useful lives of the properties of 50 to 99 years. 

(iii) Short-term investments 

Short-term investments are stated at the lower of cost and market value determined on an aggregate 

basis. Cost is determined on the first-in first-out method. Profits or losses on disposal of short-term 

investments are taken to the income statement. 

(k) Associated companies 

The Group treats as associated companies those companies in which the Group has a long term equity 

interest of between 20 and 50 percent and over whose financial and operating policy decisions the Group 

exercises significant influence. 

Associated companies are accounted for under the equity method whereby the Group’s share of profits less 

losses of associated companies is included in the consolidated income statement and the Group’s share of 

net assets is included in the consolidated balance sheet. These amounts are taken from the most recent 

audited financial statements of the companies concerned. Where the accounting policies of the associated 

companies do not conform with those of the Group, adjustments are made on consolidation where the 

amounts involved are considered significant to the Group. 

(l) Goodwill 

Goodwill represents the excess of the fair value of the consideration given over the fair value of the identifiable 

net assets of subsidiaries when acquired. Goodwill is amortised on a straight-line basis, through the 

consolidated income statement, over its useful economic life up to a maximum of 20 years. Goodwill which 

is assessed at the point of its acquisition, as having no continuing economic value is written off to reserves. 

(m) Depreciation of fixed assets 

Leasehold land is amortised evenly over the remaining term of the lease. 

Depreciation on motor vessels is calculated so as to write off the cost less estimated residual value on a 

straight line basis over their expected useful lives of 25 years from the date the vessels were put to use or 

the remaining useful lives from the date of acquisition. 

Cost of motor vessels includes actual interest incurred on borrowings used to finance the motor vessels 

while under construction and other direct relevant expenditure incurred in bringing the vessels into 


35





operation. For this purpose, the interest rate applied to funds provided for constructing the motor vessels 

is arrived at by reference to the actual rate payable on borrowings for construction purposes. The 

capitalisation of interest charges will cease upon the completion and delivery of the motor vessels. 

Depreciation on other fixed assets is calculated on a straight line basis to write off the cost of other fixed 

assets over the expected useful lives. The estimated useful lives are as follows: 

Freehold buildings 50 years 

Leasehold land and buildings 10 - 50 years 

Plant, machinery and equipment 3 - 8 years 

Office renovation, furniture, fixtures and equipment 3 - 5 years 

Motor vehicles 10 years 

Depreciation is only recognised in the financial statements when the fixed assets are put to use. 

(n) Preliminary and pre-operating expenses 

Preliminary and pre-operating expenses are written off fully in the year when operations commence. 

(o) Dry docking and survey repair expenses 

3. Revenue 

The estimated annual provision for dry docking and survey repair expenses which are expected to be 

incurred once in every five years are charged against the results of each of the years preceding the next dry 

docking date. 

Where significant dry docking and survey repair expenses are anticipated at the time of acquisition of a used 

vessel and such costs are incurred at the time of acquisition, or as soon as practicable after the date of acquisition, 

they are treated as initial costs of the vessel and are capitalised and depreciated over the remaining 

life of the vessel concerned. 


2000 1999 2000 1999 

$ $ $ $ 

Rental income from 

investment properties 

Time charter revenue and 

7,595,107 8,029,631 – – 

voyage freight 70,593,729 100,841,651 – – 

Shipping agency income 

Ship repair and fabrication 

15,389,071 15,018,710 – – 

service income 3,663,909 3,424,526 – – 

Sales of goods 64,688,971 74,097,369 – – 

Management fee income 

Dividend income 

– – 562,000 562,000 

– Subsidiaries – – 3,001,246 4,531,792 

– Associated company – – – 50,000 

161,930,787 201,411,887 3,563,246 5,143,792



4. Operating profit 


2000 1999 2000 1999 

$ $ $ $ 

Operating profit is arrived at after: 

Charging: 

Depreciation of: 

– Freehold properties 122,950 122,949 – – 

– Leasehold land and buildings 383,759 382,067 – – 

– Office renovation, furniture, fixtures 

and equipment 504,115 391,236 10,406 21,710 

– Plant, machinery and equipment 548,773 547,634 – – 

– Motor vehicles 279,280 296,552 20,154 30,098 

– Motor vessels 14,385,747 13,075,834 – – 

Total depreciation charges 16,224,624 14,816,272 30,560 51,808 

Transfer to deferred voyage costs (12,980) – – – 

16,211,644 14,816,272 30,560 51,808 

Depreciation of investment properties 1,320,579 1,305,846 – – 

Directors’ remuneration: 

– Directors of the Company 327,092 250,635 432,074 381,835 

– Directors of subsidiaries 1,055,047 1,032,033 – – 

Directors’ fees 

– Directors of the Company 377,328 374,887 79,200 79,200 

– Directors of subsidiaries 283,698 271,525 – – 

Auditors’ remuneration: 

– Auditors of the Company 180,509 125,866 45,000 37,500 

– Other auditors 10,555 8,826 – – 

Fees for non-audit services provided by 

auditors of the Company 54,209 64,904 5,696 27,644 

Provision for doubtful trade debts 31,066 44,831 – – 

Provision for diminution in value 

of short-term investments – 29,723 – 25,773 

Write down in value of trading property 70,000 – – – 

Provision for dry docking and 

survey repair expenses 1,204,980 1,206,304 – – 

Provision for off hire claim on freight 

and hire income 799,552 460,226 – – 

Provision for foreseeable losses on 

development property 84,000 – – – 

Provision for foreseeable loss on an 

uncompleted voyage 62,057 – – – 

Preliminary and pre-operating 

expenses written off 7,298 31,230 – – 

Rental expense – operating leases 1,079,731 1,110,453 78,144 78,144 

Loss on disposal of fixed assets – 28,333 – – 

Fixed assets written off – 19,809 – – 

Bad trade debts written off – 49,399 – – 

Bad non-trade debts written off – 1,164 – 1,164 


37



4. Operating profit (continued) 



2000 1999 2000 1999 

$ $ $ $ 

And crediting: 

Profit on disposal of fixed assets 

Dividend income from unquoted 

9,698 – – – 

equity investments – 40,560 – – 

Bad trade debts recovered 

Write back of provision for loss on 

42,405 12,688 – – 

fixed deposits 

Write back of provision for doubtful 

253,763 – 253,763 – 

trade debts 

Write back of provision for foreseeable 

15,652 8,310 – – 

losses on development property – 1,700,000 – – 

Write back in value of trading property – 150,000 – – 

5. Finance income 


2000 1999 2000 1999 

$ $ $ $ 

Interest income from: 

– Fixed deposits 1,675,005 1,279,184 604,812 416,757 

– Subsidiaries – – 1,339,365 2,581,720 

– Minority shareholder of a subsidiary 7,706 – – – 

– Others 89,554 77,688 3,498 3,399 

Net foreign exchange gain 

Foreign exchange gain from 

3,997,678 482,699 4,784,199 448,640 

forward contracts – 783,387 – – 

5,769,943 2,622,958 6,731,874 3,450,516



6. Finance costs 


2000 1999 2000 1999 

$ $ $ $ 

Interest expense: 

– Bank loans 13,729,896 13,732,138 903,186 3,156,753 

– Bank overdrafts 

– Loans from immediate 

242,221 142,062 242,221 141,014 

holding company 335,987 215,618 230,981 101,054 

– Hire purchase 1,497 16,842 – 7,994 

– Short-term bank loans 

– Short-term advance from an 

98,719 125,446 – – 

associated company 

Foreign exchange loss from 

5,014 5,000 5,014 5,000 

forward contracts 838,800 – 838,800 – 

7. Staff costs 

15,252,134 14,237,106 2,220,202 3,411,815 


2000 1999 2000 1999 

$ $ $ $ 

Wages, salaries and staff benefits 

Employer’s contribution to 

10,404,597 8,566,137 1,036,602 925,718 

Central Provident Fund 558,858 454,768 41,101 39,354 

Average number of persons employed during the year: 

10,963,455 9,020,905 1,077,703 965,072 


2000 1999 2000 1999 

Full time 251 248 9 8 


39



8. Tax 

(a) Tax expense 



2000 1999 2000 1999 

$ $ $ $ 

Tax expense attributable 

to profit is made up of: 

Current taxation 

Singapore 1,482,027 820,481 597,000 342,000 

Foreign 962,008 613,118 6,100 114,764 

2,444,035 1,433,599 603,100 456,764 

Share of tax of associated company 10,713 20,835 – – 

Deferred tax charge 

Under/(over)provision in 

prior financial years: 

167,265 – 247,000 – 

Income tax 528,645 (12,649) 900,000 – 

Deferred tax 404,685 – 392,000 – 

3,555,343 1,441,785 2,142,100 456,764 

(a) The income tax expense on the results of the Group for the year is lower than the amount of income tax 

determined by applying the Singapore standard rate of income tax to profit before tax mainly because of: 

(i) a subsidiary in the Group which is engaged in the activities of ship owning and chartering services has 

obtained tax exemptions under the Approved International Shipping Incentive Scheme and Section 

13A of the Singapore Income Tax Act; and 

(ii) certain subsidiaries in the Group, incorporated in Panama and Liberia, which are engaged in the 

activities of ship owning and chartering services are not subject to tax in any jurisdiction. 

(b) As at 31 December 2000, one of the subsidiaries has unutilised tax losses amounting to approximately 

$6,067,000 (1999: $3,895,000) available for offsetting against future taxable income subject to the agreement 

of the tax authority and the provisions of the tax legislations in the country of the relevant tax jurisdiction. 

The deferred tax benefit on these tax losses has not been recognised in the financial statements. 

(c) The income tax expense on the results of the Company for the year is lower than the amount of income tax 

determined by applying the Singapore standard rate of income tax to profit before tax mainly because of 

certain income not being taxable for income tax purposes.



8. Tax (continued) 

(d) Movements in provision for current tax/(income tax receivable) 


2000 1999 2000 1999 

$ $ $ $ 

Balance at the beginning 

of the financial year: 

Provision for current tax 1,364,908 2,129,042 – – 

Income tax receivable – – (917,073) (372,682) 

Income tax paid 

Current financial year’s 

(2,326,981) (2,185,084) (771,418) (1,001,155) 

income tax expense 

Under/(over)provision of 

2,444,035 1,433,599 603,100 456,764 

prior years’ income tax 

Balance at the end of the 

financial year: 

528,645 (12,649) 900,000 – 

Provision for current tax 2,010,607 1,364,908 – – 

Income tax receivable – – (185,391) (917,073) 

(e) Composition of deferred taxation 

Provision for deferred tax comprises the estimated tax expense at current tax rates of 24.5% (1999: 25.5%) 

on the following items: 


2000 1999 2000 1999 

$ $ $ $ 

Difference in depreciation 

of fixed assets for 

accounting and income 

tax purposes 46,563 113,500 – – 

Other timing differences 639,000 – 639,000 – 

685,563 113,500 639,000 – 


41



(f) Movements in provision for deferred tax 



2000 1999 2000 1999 

$ $ $ $ 


of the financial year 

Transfer from income statement 

113,500 113,500 – – 

– Provision made in current year 167,265 – 247,000 – 

– Underprovision in prior years 404,685 – 392,000 – 

Exchange rate adjustments 

Balance at the end of 

113 – – – 

the financial year 685,563 113,500 639,000 – 

9. Earnings per ordinary share 

The Group 

2000 1999 

$ $ 

Profit attributable to shareholders 10,777,347 814,977 

Cumulative preferential dividend on the RCCPS 

Profit attributable to shareholders (after deducting 

(1,424,163) (176,382) 

cumulative preferential dividend on the RCCPS) 9,353,184 638,595 

Weighted average number of ordinary shares 

in issue for basic earnings per ordinary share 554,322,208 500,955,915 

Adjustments for assumed conversion of share options – 355,185 

Adjustments for assumed conversion of redeemable 

convertible cumulative preference shares 167,266,415 – 

Adjustments for assumed conversion of Warrants 2000 – 1,398,110 

Weighted average number of ordinary shares 

for diluted earnings per ordinary share 721,588,623 502,709,210 

In determining the diluted earnings per ordinary share, a calculation is performed to determine the number of 

ordinary shares that could have been acquired at market price (determined as the average annual share price of 

the Company’s shares) based on the exercise price of the outstanding share options. This calculation serves to 

determine the “unpurchased” shares to be added to the ordinary shares outstanding for the purpose of computing 

the dilution. 

All information relating to the number of ordinary shares have been adjusted to account for the share split of one 

ordinary share of $1 each into five ordinary shares of $0.20 each during the financial year end.



10. Bank and cash balances and fixed deposits with financial institutions 


2000 1999 2000 1999 

$ $ $ $ 

Fixed deposits 17,906,798 68,330,435 4,027,266 54,287,886 

Less: Provision for loss – (1,356,298) – (1,356,298) 

Movements in provision for 

loss are as follows: 

17,906,798 66,974,137 4,027,266 52,931,588 


2000 1999 2000 1999 

$ $ $ $ 



Writeback of provision 

1,356,298 1,356,298 1,356,298 1,356,298 

for loss no longer required 

Amount written off 

(253,763) – (253,763) – 

against provision 


(1,102,535) – (1,102,535) – 

financial year – 1,356,298 – 1,356,298 

Bank and cash balances and fixed deposits of the Group to the extent of $2,040,985 (1999: $3,736,462) were 

pledged as security for the following: 

(i) long-term bank loans obtained to finance the purchases of certain motor vessels; 

(ii) the issuance of banker’s guarantees in favour of third parties; and 

(iii) banking facilities granted to a subsidiary. 

11. Trade debtors 


2000 1999 2000 1999 

$ $ $ $ 

Trade debtors 

Less: Provision for 

12,900,094 17,595,896 – – 

doubtful debts (31,066) (44,831) – – 

12,869,028 17,551,065 – – 


43



11. Trade debtors (continued) 



2000 1999 2000 1999 

$ $ $ $ 


doubtful debts are as follows: 


of the financial year 44,831 286,700 – – 

Provision made during the financial year 

Write back of provision of 

31,066 44,831 – – 

doubtful debts no longer required 

Bad trade debts written off 

(15,652) (8,310) – – 

against provision (29,179) (278,808) – – 

Exchange rate adjustments – 418 – – 

Balance at the end of the financial year 31,066 44,831 – – 

12. Short-term investments 


2000 1999 2000 1999 

$ $ $ $ 

Quoted equity shares, at cost 428,895 428,895 351,275 351,275 

Less: Provision for diminution in value (428,895) (428,895) (351,275) (351,275) 

– – – – 

Market value 6,241 21,434 1,734 14,994 


diminution in value are as follows: 


of the financial year 428,895 399,172 351,275 325,502 

Provision made during the financial year – 29,723 – 25,773 

Balance at the end of the financial year 428,895 428,895 351,275 351,275 

13. Inventories 

The Group 

2000 1999 

$ $ 

Contract work-in-progress, at cost 40,000 135,438 

Consumable stores (weighted average cost) 1,378,863 1,427,611 

Trading goods (specific identification) 13,596 – 

1,432,459 1,563,049



14. Trading property 

This comprises 1 unit of leasehold service apartment located at Grangeford Apartments, Leonie Hill Road, 

Singapore, with a gross floor area of 109 square metres. The lease period is for 99 years commencing 1974. 

The trading property is stated at net realisable value, which is lower than cost. This trading property has been 

mortgaged to a bank as security for a long-term bank loan and bank facilities (see note 24 to the financial 

statements). 

15. Development property 

The Group 

2000 1999 

$ $ 

Cost of freehold land 36,060,000 36,060,000 

Development costs [note (b)] 8,044,683 1,810,938 

Other overhead expenditure capitalised 1,936,564 1,927,217 

Borrowing costs capitalised 10,119,491 7,041,557 

56,160,738 46,839,712 

Less: Provision for foreseeable losses [note (c)] (420,000) – 

55,740,738 46,839,712 

Less: Progress billings (1,751,997) (227,600) 

53,988,741 46,612,112 

Interest capitalised during the financial year: 

Long-term bank loans 2,857,612 2,661,244 

Loan from minority shareholder 220,322 197,926 

3,077,934 2,859,170 

(a) The Group’s development property comprises a freehold land with a gross floor area of about 2,066 square 

metres and is located at Shanghai Road, Singapore. The Group is constructing a 48 unit 14-storey residential 

apartment building with a basement carpark, a swimming pool and communal facilities. As at 16 April 

2001, the construction is approximately 95% completed and the expected completion date of the project is 

June 2001. 

(b) A forfeited performance bond of $1,348,000 (1999: $1,348,000) received from a related company as a result 

of the termination of the construction contract with the related company has been set off against the 

development costs. 


45



15. Development property (continued) 

(c) On 18 December 1998, a subsidiary of the Company (“the Grantee”) entered into a Put Option Agreement 

(the “Agreement”) with the Company’s immediate holding company, (“the Grantor”), whereby in consideration 

of the sum of $1 paid by the Grantee, the Grantor grants to the Grantee the right (“Option”), 

exercisable at any time commencing 1 January 1999 and ending on 31 December 2003 (“Option Period”) 

to sell the Grantee’s holding of 800,000 ordinary shares of $1 each in a subsidiary, Cosland (SR) 

Development Pte Ltd (“Cosland”) for a total sale price of $796,000. 


In connection with Clause 6 of the Agreement, the Grantor has undertaken to compensate or indemnify the 

Grantee for any loss represented by the diminution in value of the latter’s shareholdings in Cosland or losses, 

costs, claims or liabilities arising from or attributed to any realised or foreseeable losses in relation to the 

above property development project undertaken by Cosland at any time during the Option Period. 

In view of the above undertaking, an adjustment was made at the Group level to transfer the Group’s share 

of the provision for forseeable losses which is represented by its 80% interest in Cosland, amounting to 

$336,000 (1999: Nil) to the Grantor, as an amount recoverable. This adjustment resulted in the Group’s 

profit before tax to increase by the same amount (see note 25 to the financial statements). 

(d) The development property is mortgaged to a bank to secure credit facilities as disclosed in note 24 to the 

financial statements. 

16. Other debtors 


2000 1999 2000 1999 

$ $ $ $ 

Deposits and prepayments 1,213,626 468,084 70,510 74,400 

Deferred voyage costs 266,183 – – – 

Staff loans and advances 274,491 128,287 264,437 111,230 

Interest receivable 2,890 369,702 2,890 369,702 

Sundry debtors 226,913 476,528 – 4,526 

17. Non-trade debtor 

1,984,103 1,442,601 337,837 559,858 

This represents the operating loss incurred by a motor vessel recoverable from a third party. In 1997, a subsidiary 

of the Company entered into an agreement with a third party (“Charterer”) to bareboat charter a motor vessel for 

a period of 15 years commencing on 12 January 1999. During the period of the bareboat charter, any operating 

loss incurred on the motor vessel at the end of a financial year shall be carried forward from year to year until the 

sale of the motor vessel or the termination of the bareboat charter arrangement, whichever is earlier. 

The operating loss incurred on the motor vessel will be recovered via the sale proceeds derived from the sale of 

the motor vessel. In the event that the proceeds of such sale are insufficient to discharge any operating loss 

brought forward, the Charterer shall bear and be fully responsible for all outstanding undischarged amounts 

thereunder. Accordingly, the operating loss mentioned above was reflected as an amount recoverable from the 

Charterer.



18. Loan to a related company 

The loan is unsecured, interest free and repayable in full on 1 January 2004. The repayment of this loan is guaranteed 

by the immediate holding company. 

19. Investments 


2000 1999 2000 1999 

$ $ $ $ 

Unquoted equity shares in 

corporations, at cost 1,854,500 120,000 – – 

Transferable club memberships in 

country clubs, at cost 855,917 652,677 517,820 517,820 

Exchange rate adjustment 989 240 – – 

Less: Provision (180,560) (180,560) (180,560) (180,560) 

676,346 472,357 337,260 337,260 

Total 2,530,846 592,357 337,260 337,260 

20. Associated companies 

(a) 


2000 1999 2000 and1999 

$ $ $ 

Unquoted equity shares, at cost 1,000,000 

Represented by: 

Net tangible assets acquired 1,100,000 1,100,000 

Group’s share of post acquisition accumulated losses (213,424) (130,287) 

Dividend received (net) – (37,000) 

886,576 932,713 


47



20. Associated companies (continued) 

(b) Information relating to the associated companies is set out below: 

21. Subsidiaries 

(a) 


Country of % of % of 

incorporation/ paid-up paid-up 

business capital held by capital held Accounting 

Name of company carried on in the Company by subsidiary year end 

2000 and 1999 2000 and 1999 

% % 

Cosem Pte Ltd 

Cosco Bundaberg Sugar 

Singapore 50 – 31 December 2000 

(Singapore) Pte Ltd Singapore – 50 31 December 2000 

The Company 

2000 1999 

$ $ 

Unquoted equity shares, at cost 18,498,038 18,447,034 

Loans to subsidiaries 159,884,147 148,836,888 

178,382,185 167,283,922 

The loans to subsidiaries are unsecured and have no fixed terms of repayment but substantial repayments 

are not expected within the next twelve months from the balance sheet date. Except for an amount of 

$139,245,820 (1999: $103,828,822) due from wholly owned subsidiaries which is interest-free, the 

remaining loans bear interest at rates ranging from 6% to 12% (1999: 4% to 12%) per annum. 

(b) Due by subsidiaries 

The Company 

2000 1999 

$ $ 

Trade 2,019,342 1,262,472 

Non-trade 1,103,091 802,579 

(c) Short-term advance from a subsidiary 

3,122,433 2,065,051 

The short-term advance from a subsidiary is unsecured, interest-free and have no fixed terms of repayment.



21. Subsidiaries (continued) 

(d) The subsidiaries are: 

Country of 

incorporation/ % of paid-up capital held by 

Name of Principal country of Cost of The 

subsidiary activities business investment Company Subsidiaries 

2000 1999 2000 1999 2000 1999 

$ $ % % % % 

Cosco Ship owning, ship Singapore 5,000,000 5,000,000 100 100 – – 

(Singapore) chartering and 

Pte Ltd investment holding 

Cosco Marine Ship repairing, Singapore 1,442,400 1,442,400 60 60 – – 

Engineering marine engineering, 

(Singapore) container repairs 

Pte Ltd and services, 

fabrication works 

services and 

production of 

marine outfitting 

components 

Cosco General trading Singapore 2,400,000 2,400,000 80 80 – – 

Trading and commission 

(Singapore) 

Pte Ltd 

agent 

Harington Trading and Singapore 5,000,000 5,000,000 100 100 – – 

Property investing in 

Pte Ltd properties, provide 

property management 

services and 

investment holding 

Coslink (M) Shipping agency Malaysia 586,640 586,640 51 51 – – 

Sdn. Bhd. (i) and related activities 

Costar Shipping agents Singapore 4,017,990 4,017,990 70 70 – – 

Shipping and investment 

Pte Ltd holding 

Calzona Investment Singapore 2 2 100 100 – – 

Pte Ltd (ii) holding 


49





Country of 




2000 1999 2000 1999 2000 1999 

$ $ % % % % 

Johnston Investment Singapore 2 2 100 100 – – 

Investments 

Pte Ltd (ii) 

holding 

Costo Trading of Singapore 51,000 – 51 – – – 

(Singapore) bitumen and 

Private other shipping 

Limited related activities 

Revo Investment British 2 – 100 – – – 

Technologies holding Virgin 

Ltd Islands 

Marlene Investment British 2 – 100 – – – 

International holding Virgin 

Ltd (iii) Islands 

Serene Sky Ship owning Liberia/ – – – – 100 100 

Shipping Inc. and ship 

chartering 

Worldwide 

Greenery Ship owning Panama/ – – – – 100 100 

Shipping and ship Worldwide 

Corporation 

S.A. 

chartering 

Dynamism Ship owning Panama/ – – – – 100 100 

Shipping and ship Worldwide 

Corporation 

S.A. 

chartering 

COS Glory Ship owning Panama/ – – – – 100 100 

Shipping Inc. and ship 

chartering 

Worldwide 

Cosland (SR) Property Singapore – – – – 80 80 

Development 

Pte Ltd 

development




Country of 




2000 1999 2000 1999 2000 1999 

$ $ % % % % 

Costar 

Agencies (M) 

Sdn. Bhd. (iv) 

Shipping agent Malaysia – – – – 100 100 

CNF Shipping 

(M) Sdn. Bhd. 

(iv) 

Shipping agent Malaysia – – – – 60 60 

CNF Shipping 

Agencies 

Pte Ltd 

Shipping agent Singapore – – – – 100 – 

18,498,038 18,477,034 

(i) Company audited by another member firm of PricewaterhouseCoopers global organisation. 

(ii) The shares in these subsidiaries were pledged to a bank to secure bank loans (see note 24 to the 

financial statements). 

(iii) Not required by the law of the country of its incorporation to be audited. The company has not 

commenced operations since the date of incorporation. 

(iv) Company audited by other firms. 


51



22. Investment properties 


The Group 

2000 1999 

$ $ 

Leasehold investment properties, at cost 


Exchange rate adjustments 1,834,875 441,977 


Accumulated depreciation 


Depreciation charge for the financial year 1,320,579 1,305,846 

Exchange rate adjustments 80,429 (6,111) 


Net book value at 31 December 95,937,345 95,503,478 

Market value [note (a)] 89,603,500 93,766,100 

(a) The open market value of the above investment properties comprises: 

(i) The open market value of the investment properties in Singapore as at 31 December 2000 which 

amounted to $49,450,000 (1999: $50,700,000) was based on an independent professional valuation 

carried out by CB Richard Ellis Pte Ltd on 22 January 2001 on the basis of open market value for existing 

use. 

(ii) The open market value of the investment properties in Shanghai, People’s Republic of China as at 31 

December 2000 which amounted to $40,153,500 (1999: $43,066,100) was based on an independent 

professional valuation carried out by DTZ Debenham Tie Leung, a firm of international surveyors on 

2 January 2001, on the basis of open market value for existing use.



22. Investment properties (continued) 

(b) The Group’s investment properties as at 31 December 2000 are set out below: 

Address Held By Title Description Floor Area 

(square metres) 

(i) 

(ii) 

Suntec City, Temasek 

} 

Boulevard, Singapore 

Telok Ayer Street, 

Harington Property 

Pte Ltd 

Lease term of 

99 years 

commencing 

1 March 1989 

Lease term of 

3 units of 

office space 

8 units of shop 

1,336 

4,685 

Singapore 999 years 

commencing 1884 

houses 

(iii) 818 Dongfang Road, Calzona Lease term of A 3 storey 11,359 

Lujiazui Finance and Pte Ltd 50 years commercial 

Trade Zone, Pudong, commencing podium and 

Shanghai, People’s 18 June 1992 2 levels of 

Republic of China office units 

(iv) 19 Lingshan Road, Johnston Lease term of 60 units of 8,817 

Lujiazui Finance and Investments 70 years residential 

Trade Zone, Pudong, Pte Ltd commencing apartments 

Shanghai, People’s 

Republic of China 

2 September 1993 

These properties have been mortgaged to banks as securities for long-term bank loans and bank overdrafts 

(see note 24 to the financial statements). 


53



23. Fixed assets 

(a) The Group 


Leasehold 

Freehold land and 

buildings buildings 

$ $ 

Cost 

At 1 January 2000 

Exchange rate 

6,137,570 13,628,168 

adjustments – 210,761 

Additions – – 

Disposals – – 

At 31 December 2000 6,137,570 13,838,929 


At 1 January 2000 554,117 1,537,595 

Exchange rate adjustments – 19,773 

Depreciation charge 122,950 383,759 

Disposals – – 

At 31 December 2000 677,067 1,941,127 

Net book value 

At 31 December 2000 5,460,503 11,897,802 


At 31 December 1999 5,583,453 12,090,573 

(i) As at the balance sheet date, the net book value of fixed assets of the Group mortgaged to banks to 

secure long-term bank loans and bank facilities amounted to $172,983,080 (1999: $174,516,077). The 

details of these fixed assets are disclosed in note 24 to the financial statements.



Office 

renovation, Plant, 

furniture, machinery 

fixtures and and Motor Motor 

equipment equipment vehicles vessels Total 

$ $ $ $ $ 

3,824,373 3,478,874 3,574,462 286,364,507 317,007,954 

53,592 89,237 56,207 11,774,291 12,184,088 

291,559 6,490 562,819 – 860,868 

(5,558) – (393,666) – (399,224) 

4,163,966 3,574,601 3,799,822 298,138,798 329,653,686 

2,951,594 2,200,631 1,958,371 55,479,414 64,681,722 

46,642 50,131 39,221 2,390,591 2,546,358 

504,115 548,773 279,280 14,385,747 16,224,624 

(3,117) – (275,474) – (278,591) 

3,499,234 2,799,535 2,001,398 72,255,752 83,174,113 

664,732 775,066 1,798,424 225,883,046 246,479,573 

872,779 1,278,243 1,616,091 230,885,093 252,326,232 

(ii) As at the balance sheet date, the net book value of fixed assets of the Group under hire purchase 

agreements included in motor vehicles amounted to $195,961 (1999: Nil). 


55



23. Fixed assets (continued) 

(b) The Company 


Office 

furniture, 

fixtures and Motor 

equipment vehicles Total 

$ $ $ 

Cost 

At 1 January 2000 132,871 203,252 336,123 

Additions 5,665 – 5,665 

At 31 December 2000 138,536 203,252 341,788 


At 1 January 2000 116,487 43,697 160,184 

Depreciation charge 10,406 20,154 30,560 

At 31 December 2000 126,893 63,851 190,744 


At 31 December 2000 11,643 139,401 151,044 


At 31 December 1999 16,384 159,555 175,939 

(c) The Group’s properties as at 31 December 2000, which are all located in Singapore are set out below: 

Address Held By Title Description 

(i) 

(ii) 

Riverwalk Apartment, 

} 

Upper Circular Road 

Harington Property 

Pte Ltd 

Grangeford Apartment, 

99 years leasehold 

commencing 

15 December 1980 

99 years leasehold 

Residential 

apartment 

Residential 

Leonie Hill Road commencing 

December 1974 

apartment 

(iii) Roxy Square, Cosco (Singapore) 9,999 years leasehold 6 units of 

East Coast Road Pte Ltd commencing residential 

3 April 1848 apartments 

(iv) King’s Mansion, Cosco Trading Freehold Residential 

Amber Garden (Singapore) 

Pte Ltd 

apartment



23. Fixed assets (continued) 

Address Held By Title Description 

(v) 52 Penjuru Lane Cosco Marine Lease term of 30 Leasehold industrial 

Engineering years commencing land for ship repair 

(Singapore) Pte Ltd 15 April 1992 workshops and 

production of 

marine outfitting 

components 

(vi) Amber Park Garden 

(vii) Sarhad Ville, 

Lorong Sarhad 

(viii) Buona Vista Garden, 

Zehnder Road } 

Costar Shipping 

Pte Ltd 

Freehold 

Residential 

apartment 

Residential 

apartment 

Residential 

apartment 

(ix) Margate Mansion, 2 units of residential 

Margate Road apartments 

24. Bank borrowings 


2000 1999 2000 1999 

$ $ $ $ 

Bank overdrafts 

Secured 8,394,084 7,397,343 – – 

Unsecured 

Short-term bank loans 

2,975,502 – 2,975,502 – 

Secured 

Long-term bank loans 

3,655,551 13,894,881 – – 

Secured 190,578,703 205,435,429 – – 

Unsecured 5,203,500 56,227,500 5,203,500 56,227,500 

Less: Bank borrowings 

210,807,340 282,955,153 8,179,002 56,227,500 

due after twelve months (144,285,337) (192,800,193) (5,203,500) (6,247,500) 

66,522,003 90,154,960 2,975,502 49,980,000 


57



24. Bank borrowings (continued) 

(a) Bank overdraft facilities of the Group to the extent of $9,338,000 (1999: $9,064,000) are secured by way 

of: 


(i) a first legal mortgage on the leasehold property at Riverwalk Apartment; 

(ii) a first legal mortgage on the leasehold properties at Telok Ayer Street and an assignment over all 

rental/lease income generated by these properties; and 

(iii) a first legal mortgage on the leasehold and trading properties at Leonie Hill Road and an assignment 

of the rental proceeds generated by these properties. 

(b) The Group’s secured long-term bank loans comprise the following: 

(i) Secured by a first legal mortgage on a subsidiary’s leasehold 

properties at Roxy Square. The term loan is 

repayable over 15 years at a monthly instalment of 

$18,444 (1999: $18,444). The first repayment commenced 

in October 1995. The loan bears interest at 

6.5% (1999: 6.5%) per annum. 

(ii) Secured by a first mortgage over the MV Cos Cherry 

and an assignment of the vessel’s earnings, fixed deposit 

of US$436,144 (1999: US$409,876) equivalent to 

$756,492 (1999: $682,853) and insurance coverage. 

The loan is repayable in 31 quarterly instalments of 

US$350,000 equivalent to $607,075 (1999: $583,100) 

with a final instalment of US$7,150,000 equivalent to 

$12,401,675 (1999: $11,911,900). The first quarterly 

repayment commenced in March 1997. The loan bears 

interest at 0.9% (1999: 0.9%) per annum over three, six 

or twelve months’ US Dollar Singapore Inter-bank 

Offer Rate (SIBOR). 

(iii) Secured by a first mortgage over the MV Cos Angel and 

an assignment of the vessel’s earnings. The loan is 

repayable in 19 quarterly instalments of US$360,000 

equivalent to $624,420 (1999: $599,760) with a final 

instalment of US$520,000 (1999: US$3,160,000) 

equivalent to $901,940 (1999: $5,264,560). The first 

quarterly repayment commenced in June 1996. The 

loan bears interest at 0.875% (1999: 0.875%) per 

annum over US Dollar SIBOR. 

The Group 

2000 1999 

$ $ 

2,158,002 2,379,336 

18,992,777 20,575,100 

1,526,360 8,263,360




(iv) Secured by a first legal mortgage over the MV Cos 

Bonny and an assignment of the vessel’s earnings, fixed 

deposit of US$251,311 (1999: US$1,200,000) equivalent 

to $435,899 (1999: $1,999,200) and insurance coverage. 

The loan is repayable in 48 equal quarterly instalments 

of US$281,250 equivalent to $487,828 (1999: 

$468,563) and a final instalment of US$4,500,000 

equivalent to $7,805,250 (1999: $7,497,000). The first 

quarterly repayment commenced in February 1997. The 

loan bears interest at 1% (1999: 1%) per annum over 

three, six or twelve months’ US Dollar London Interbank 

Offer Rate (LIBOR). 

(v) Secured by a first legal mortgage on a subsidiary’s 

leasehold property at Riverwalk Apartment. The loan is 

repayable over 10 years at a monthly instalment of 

$8,336 (1999: $8,365). The first repayment commenced 

in May 1995. The loan bears interest at 6% (1999: 6%) 

per annum and is subject to fluctuations at the lending 

bank’s discretion. 

(vi) Secured by a first legal mortgage on a subsidiary’s leasehold 

properties at Telok Ayer Street and an assignment 

of all rental/lease income generated by these properties. 

The loan is repayable over 100 equal monthly instalments 

of US$113,826 equivalent to $197,431 (1999: 

$189,634) with a final repayment of US$1,685,098 

equivalent to $2,922,802 (1999: $2,807,373). The first 

repayment commenced in August 1995. The loan bears 

interest at rates ranging from 1.15% to 1.25% (1999: 

1.15% to 1.25%) per annum over the bank’s US Dollar 

SIBOR. 

(vii) Secured by a first legal mortgage on a subsidiary’s 

investment properties at Suntec City, Temasek 

Boulevard and an assignment of the lease proceeds generated 

by these properties and insurance policies taken 

on these properties. The loan is repayable over 31 

quarterly instalments of US$250,000 equivalent to 

$433,625 (1999: $416,500) with a final repayment 

of US$4,750,000 equivalent to $8,238,875 (1999: 

$7,913,500). The first quarterly repayment commenced 

in September 1997. The loan bears interest at 1.25% 

(1999: 1.25%) per annum over the bank’s US Dollar 

SIBOR. 

The Group 

2000 1999 

$ $ 

23,415,750 24,365,250 

378,354 451,196 

9,832,893 11,720,176 

15,038,612 16,110,697 


59





(viii) Secured by a first legal mortgage on a subsidiary’s leasehold 

land and building at 52 Penjuru Lane. The loan is 

repayable in 22 quarterly instalments of $75,000 (1999: 

$75,000) with a final repayment of $2,350,000. The first 

quarterly repayment commenced in July 1996. The loan 

bears interest at the rate of 0.625% (1999: 0.625%) per 

annum above the bank’s prevailing prime lending rate. 

(ix) Secured by a first legal mortgage on a subsidiary’s freehold 

property at Amber Garden and a legal assignment 

of the present and future rental income on the freehold 

property. The loan is repayable in 180 equal consecutive 

monthly instalments of $7,955 (1999: $7,955) 

(inclusive of interest), payable in arrears subject to 

changes at the bank’s discretion. The first repayment 

commenced in May 1995. The loan bears interest at 

0.25% (1999: 0.25%) per annum over the bank’s prime 

lending rate. 

(x) Secured by a first legal mortgage on a subsidiary’s leasehold 

and trading properties at Leonie Hill Road and an 

assignment of the rental proceeds generated by these 

properties. The loan is repayable over 15 years at a 

monthly instalment of $5,777 (1999: $5,777) with a 

final repayment of $5,917. The first repayment commenced 

in June 1997. The loan bears interest at 5% per 

annum for the first year, 5.25% per annum for the second 

year and 0.5% per annum over the bank’s prime 

lending rate from the third year onwards. 

(xi) Secured by an all monies open mortgage over a subsidiary’s 

freehold land at Shanghai Road and an assignment 

of the development rights and benefits in the Sale 

and Purchase agreement of units sold in the development 

property. The loan is also personally guaranteed 

by one of the directors of the subsidiary to the extent of 

$7,612,000 (1999: $7,612,000). The loan shall be repaid 

in the third year from the date of the first draw down of 

the loan which was on 22 August 1997. During the 

financial year, the subsidiary has obtained an extension 

of the date of repayment of loan to June 2001. The loan 

bears interest at the bank’s prime lending rate plus 

0.75% (1999: bank’s prime lending rate plus 0.75%) per 

annum. 

The Group 

2000 1999 

$ $ 

2,650,000 2,950,000 

676,132 727,465 

797,366 866,690 

32,831,638 30,370,983




(xii) Secured by a first and second preferred Panamanian 

Mortgage over MV Cos Fair, an assignment of the time 

charter agreements of the motor vessel and an earnings 

account pledged to the lending banks. The loans are 

repayable in two tranches. The first tranche which represents 

70% of the loan drawn down is repayable over 

40 consecutive quarterly instalments of equal amounts 

of US$325,873, equivalent to $565,227 (1999: 

$542,904) and the second tranche of 30% of 

US$5,586,400 equivalent to $9,689,611 (1999: 

$9,306,942) is repayable in one final instalment together 

with the 40th instalment. The first repayment commenced 

in July 1999. The loan bears interest at 1.1125% 

(1999: 1.1125%) per annum over three months’ US 

Dollar LIBOR. 

Included in the loans is an amount of up to 

US$3,562,500 (1999: US$3,562,500) equivalent to 

$6,179,156 (1999: $5,935,125) from a lending financial 

institution for which the repayment is subordinated to 

other lending banks as a second priority lender. 

(xiii) Secured by a first and second preferred Panamanian 

Mortgage over MV Cos Glory, an assignment of the 

time charter agreements of the motor vessel and an 

earnings account pledged to the lending banks. The 

loans are repayable in two tranches. The first tranche 

which represents 70% of the loan drawn down is 

repayable over 40 consecutive quarterly instalments of 

equal amounts of US$318,161 equivalent to $551,850 

(1999: $530,056) and the second tranche of 30% 

of US$5,454,193 equivalent to $9,460,298 (1999: 

$9,086,686) is repayable in one final instalment together 

with the 40th instalment. The first repayment 

commenced in October 1999. The loan bears interest 

at 1.1125% (1999: 1.1125%) per annum over three 

months’ US Dollar LIBOR. 

Included in the loans is an amount of up to 

US$3,562,500 (1999: US$3,562,500) equivalent to 

$6,179,156 (1999: $5,935,125) from a lending financial 

institution for which the repayment is subordinated to 

other lending banks as a second priority lender. 

The Group 

2000 1999 

$ $ 

28,907,344 29,937,334 

28,223,225 29,228,840 


61





(xiv) Secured by a simple deposit of title deeds of two investment 

properties located in the People’s Republic of 

China, held by two of the subsidiaries, a fixed and floating 

charge over the assets of and a pledge of all shares of 

these two subsidiaries. The loan is also secured by an 

assignment of all sales and rental proceeds from the 

investment properties from all purchasers and tenants 

including the ultimate holding and a related corporation. 

The loan is repayable over 19 quarterly instalments 

of US$500,000 each equivalent to $867,250 (1999: 

$833,000). The first repayment commenced in April 

1998 and a final repayment of US$10,500,000 equivalent 

to $18,212,250 (1999: $17,493,000) is repayable in 

January 2003. The loan bears interest at 1.5% per annum 

over US Dollar SIBOR. 

The Group 

2000 1999 

$ $ 

25,150,250 27,489,002 

190,578,703 205,435,429 

The loans taken up by subsidiaries set out in note (b)(i) to (xiv) above are guaranteed by the Company. 

(c) The remaining unsecured term loans of the Group and the Company amounting to $5,203,500 (1999: 

$6,247,500) bear interest at rates ranging from 1.25% to 1.5% (1999: 1.25%) per annum over US Dollar 

SIBOR and has no fixed terms of repayment but substantial repayments are not expected within the next 

twelve months from the balance sheet date.



25. Holding and ultimate holding corporations 

(a) The Company’s immediate holding company is Cosco Holdings (Singapore) Pte Ltd, incorporated in 

Singapore. The ultimate holding corporation is China Ocean Shipping (Group) Company, registered in the 

People’s Republic of China. 

(b) Due by/(to) immediate holding company 


2000 1999 2000 1999 

$ $ $ $ 

Trade 

Interest payable 

Non-trade 

Sale consideration 

receivable from the 

(414,456) (254,253) (41,181) – 

disposal of a subsidiary 

Losses recoverable on 

property development 

– 262,979 – 262,979 

[see note 15 (c)] 336,000 – – – 

(c) Loans from immediate holding company 

(78,456) 8,726 (41,181) 262,979 

The loans from the immediate holding company are unsecured and have no fixed terms of repayment but 

substantial repayments are not expected within the next twelve months from the balance sheet date. The 

loans bear interest at rates ranging from 8.94% to 9% (1999: 6% to 7.75%). 

26. Other creditors 


2000 1999 2000 1999 

$ $ $ $ 

Rental deposits 

Advances received from 

649,925 768,750 – – 

customers 

Provision for dry docking 

and survey repair 

– 39,104 – – 

expenses [note (a)] 

Provision for off hire 

claim on freight and hire 

2,406,154 1,521,039 – – 

income [note (b)] 966,252 524,117 – – 

Deferred voyage income 300,477 – – – 

Accrued operating liabilities 7,907,841 8,632,627 238,817 1,514,225 

12,230,649 11,485,637 238,817 1,514,225 


63



26. Other creditors (continued) 

(a) Movements in provision for dry docking and survey repair expenses are analysed as follows: 


The Group 

2000 1999 

$ $ 


Provision made during the financial year 1,204,980 1,206,304 

Reclassification – (333,200) 

Amount utilised during the financial year (388,618) (750,718) 

Exchange rate adjustments 68,753 6,422 


(b) Movements in provision for off hire claim on freight and hire income are analysed as follows: 

The Group 

2000 1999 

$ $ 

Balance at the beginning of the financial year 524,117 1,116,547 

Provision made during the financial year 799,552 460,226 

Amount utilised during the financial year (385,052) (1,073,933) 

Exchange rate adjustments 27,635 21,277 

Balance at the end of the financial year 966,252 524,117 

27. Hire purchase creditors 

The Group 

2000 1999 

$ $ 

Not later than one financial year 

Later than one financial year but not later than 

32,016 – 

five financial years 100,078 – 

Later than five financial years 42,262 – 

174,356 – 

Less: Future finance charges (27,523) – 

Included in: 

146,833 – 

Current liabilities 27,660 – 

Non-current liabilities 119,173 – 

146,833 –



28. Loan from a minority shareholder of a subsidiary 

The loan from a minority shareholder of a subsidiary is unsecured and bears interest at 8% (1999: 8%) per annum. 

The repayment of this loan is subordinated to a bank for the banking facilities extended to the subsidiary. 

29. Share capital of Cosco Investment (Singapore) Limited 

2000 1999 

$ $ 

Authorised 

1,250,000,000 (1999: 250,000,000) ordinary shares 

of $0.20 (1999: $1) each 

37,829,333 3.8% Redeemable Convertible Cumulative 

250,000,000 250,000,000 

Preference Shares (“RCCPS”) of $0.01 each 378,293 378,293 

250,378,293 250,378,293 

2000 1999 2000 1999 

Shares Shares $ $ 

Issued and paid up 

- Ordinary Shares of $1 each 


of the financial year 105,411,350 100,033,850 105,411,350 100,033,850 

Issue of fully paid ordinary shares of $1 

each on the exercise of options 

granted under the Cosco Group 

Employees’ Share Option Scheme 

comprising 3,000 (1999: 669,000) 

1997 Options at $1 each and 4,000 

(1999: 101,000) 1998 Options at $1 

each for cash 7,000 770,000 7,000 770,000 

Issue of fully paid ordinary shares of $1 

each on the exercise of Warrants 2000 

at $1 each, for cash 5,942,100 4,607,500 5,942,100 4,607,500 

Balance at the end of the financial year 111,360,450 105,411,350 111,360,450 105,411,350 

Subdivision of existing ordinary shares 

of $1 each into 5 ordinary shares 

of $0.20 each 556,802,250 527,056,750 111,360,450 105,411,350 

- RCCPS of $0.01 each 

Balance at the beginning of the 

financial year 33,453,283 – 334,533 – 

Issue of fully paid RCCPS for cash – 33,453,283 – 334,533 

Balance at the end of the financial year 33,453,283 33,453,283 334,533 334,533 

Total 111,694,983 105,745,883 


65



29. Share capital of Cosco Investment (Singapore) Limited (continued) 

(a) The newly issued ordinary shares rank pari passu in all respects with the previously issued ordinary shares. 

(b) During the financial year, the Company reduced the par value per ordinary share from $1 each to $0.20 each 

through a share split of one ordinary share of $1 each to five ordinary shares of $0.20 each. Consequently, 

the authorised share capital of the Company has been changed from 250,000,000 ordinary shares at $1 each 

to 1,250,000,000 ordinary shares at $0.20 each. 

(c) In 1999, the Company issued 33,453,283 of RCCPS of $0.01 each at $1.50. The RCCPS holders have the 

right to receive a fixed gross preferential dividend of 5.7 cents (3.8% of issue price) per annum for each 

RCCPS, payable annually in arrears on each dividend payment date in priority to any dividend or distribution 

in favour of any other classes of shares. 


As a result of the share split above, the RCCPS holders are entitled to convert all or any of their RCCPS 

into fully paid ordinary shares of $0.20 each based on the conversion ratio of five ordinary shares of $0.20 

each for every one RCCPS held subject to adjustment under certain circumstances in accordance with the 

Articles of Association (“AA”) of the Company, or such other ratio as may be prescribed by the directors of 

the Company for a new issue of preference shares, commencing on and including the date of the first 

anniversary of the issue date of the RCCPS (15 November 2000) up to final redemption date which is on 

15 November 2004. 

Unless earlier redeemed or converted, each RCCPS shall be redeemed by the Company at $1.50 per 

RCCPS on the final redemption on 15 November 2004. At 31 December 2000, there was no redemption 

or conversion of RCCPS. 

The RCCPS holders are not entitled to attend or vote at any General Meeting other than under the circumstances 

set out in the AA of the Company. 

(d) At 31 December 2000, there were the following outstanding options to subscribe for ordinary shares of 

$0.20 each, exercisable at any time up to the dates indicated below: 

Ordinary shares Exercise 

of $0.20 each price/share 

$ 

Expiry Date 

1997 Options 3,100,000 0.20 29 September 2002 

1998 Options 5,425,000 0.20 9 November 2003 

1999 Options 3,850,000 0.2288 30 September 2004



30. Reserves 

Non-distributable reserves: 


2000 1999 2000 1999 

$ $ $ $ 

Share premium 



Premium on RCCPS issued 

60,657,224 11,178,398 60,657,224 11,178,398 

during the financial year 

Expenses incurred on the 

– 49,845,392 – 49,845,392 

issue of RCCPS 


– (366,566) – (366,566) 

financial year 60,657,224 60,657,224 60,657,224 60,657,224 

Foreign currency translation reserve 

Balance at the beginning of 

the financial year 

Net exchange differences 

arising on translation of 

opening share capital, 

retained profits and income 

statement for the 

3,441,466 3,176,888 – – 

financial year 


1,124,264 264,578 – – 

financial year 4,565,730 3,441,466 – – 

Distributable reserve: 

Realised surplus on 

long-term investments 68,780 68,780 526,716 526,716 

Total reserves 65,291,734 64,167,470 61,183,940 61,183,940 


67



31. Dividends 


The Group and The Company 

2000 1999 

$ $ 

Payment of prior year’s final dividend on new 

shares issued before book closure date – 1,303 

Proposed first and final dividend of 0.5 cents per ordinary share 

of $0.20 each (1999: 0.5 cents per ordinary share of $1 each), 

net of tax at 24.5% (1999: 25.5%) 2,101,928 414,818 

Fixed redeemable convertible cumulative 

preferential dividend of 5.7 cents (1999: Nil) 

per share per annum net of tax at 25.5% 1,244,204 – 

Accrued fixed redeemable convertible cumulative 

preferential dividend of 5.7 cents (1999: 5.7 cents) 

per share net of tax at 24.5% (1999: 25.5%) 179,959 176,382 

32. Related party transactions 

3,526,091 592,503 

(a) Other than as disclosed in notes 5, 6 and 15(b) to the financial statements, the Group had the following 

related party transactions with related corporations and related parties on terms agreed by the parties concerned: 


2000 1999 2000 1999 

$ $ $ $ 

Sales to related corporations 46,573,016 37,066,445 – – 

Sales to related parties 

Purchases from related 

– 859 – – 

corporations 1,085,133 30,403,134 – – 

Purchases from related parties 

Rental paid to immediate 

171,193 2,895 – – 

holding company 

Survey fees paid to a 

259,309 259,476 78,144 78,144 

related party – 6,413 – –



32. Related party transactions (continued) 

(a) 


2000 1999 2000 1999 

$ $ $ $ 

Project management service 

fee payable to a minority 

shareholder of a subsidiary 

Construction costs payable 

144,445 133,765 – – 

to a related corporation 

Vessel rental paid to a 

– 183,440 – – 

related corporation 

Commission income 

4,621,942 4,381,670 – – 

received from a related corporation 

Rental income received from 

38,910 8,410 – – 

related corporations 

Commission received from 

5,858,415 5,773,299 – – 

a related party 

Crew wages paid to related 

– 6,933 – – 

corporations 

Services income received from 

3,574,398 3,214,553 – – 

ultimate holding corporation 

Service fees paid to a 

1,238,049 927,346 – – 

related party 255,611 243,526 – – 

(b) The related parties refer to corporations in which certain directors of subsidiaries have substantial financial 

interests. 

33. Commitments 

(a) Capital commitments 

Expenditure contracted for: 


2000 1999 2000 1999 

$ $ $ $ 

Development expenditure 

for property development 6,487,577 11,665,255 – – 


69



33. Commitments (continued) 

(b) Lease commitments 


Commitments in relation to non-cancellable operating leases contracted for at the reporting date but not 

recognised as liabilities are payable as follows: 


2000 1999 2000 1999 

$ $ $ $ 

Not later than one 

financial year 

Later than one financial 

year but not later than 

4,125,897 4,709,646 – 78,144 

five financial years 15,066,994 16,622,122 – – 

Later than five financial years 27,549,055 33,209,244 – – 

Included in the lease commitments is an arrangement whereby a subsidiary of the Company has entered into 

an agreement with a third party to bareboat charter a motor vessel for fifteen years from the date of delivery 

of the motor vessel, which was on 12 January 1999, at a fixed rate of Yen 620,000 per day equivalent to 

$9,399 (1999: $10,076). The bareboat charter rental can be revised from time to time upon mutual consent 

by both parties. 

(c) Put option agreement 

As stated in note 15(c) to the financial statements, the Option shall be exercisable, at any time during the 

Option Period, by the Grantee in the sum of the exercise consideration as specified below: 

When the Option is exercised Exercise Consideration Payable 

$ 

(i) Between 1 January to 31 December 1999 2,000,000 

(ii) Between 1 January to 31 December 2000 1,500,000 

(iii) Between 1 January to 31 December 2001 1,000,000 

(iv) Between 1 January to 31 December 2002 500,000 

(v) Between 1 January to 31 December 2003 100,000



33. Commitments (continued) 

(d) Others 

(i) As at the balance sheet date, the directors of a subsidiary, Revo Technologies Ltd approved the acquisition 

of an additional 3% interest in the issued share capital of Cosco Network Limited, comprising 

3,000,000 ordinary shares of US$0.01 each for a consideration of US$3,167,000 equivalent to 

$5,493,162 in cash. 

(ii) In the ordinary course of business, a subsidiary as a shareholder of an associated company, has given 

an undertaking in proportion to its shareholding interest to continue to provide financial support to 

the associated company for at least the next twelve months from the balance sheet date. The subsidiary’s 

share of the deficit in shareholders’ funds of this associated company amounted to $257,347 

(1999: $176,232) as at 31 December 2000. 

34. Contingent liabilities (unsecured) 

(a) As at the balance sheet date, the Company had given the following unsecured guarantees and indemnities: 

The Company 

2000 1999 

$ $ 

(i) Guarantees given to banks in connection with 

bank facilities provided to subsidiaries/ 

associated company 300,030,624 264,357,200 

(ii) Indemnities given to a third party in respect of 

trading of petroleum products entered into by 

a related company 1,734,500 1,666,000 

(iii) Guarantees given to banks in connection with 

bank facilities provided to related companies 48,912,900 46,981,200 

350,678,024 313,004,400 

(b) In 1998, the Company received a notice of additional tax assessment from the Comptroller of Income Tax 

(“CIT”) in relation to the profit arising on the disposal of an investment property in the financial year ended 

31 December 1995. The additional tax assessed by CIT amounted to approximately $2.96 million. The 

directors are of the view that there are reasonable grounds to support that the above profit on disposal is 

capital in nature and accordingly, the additional tax, including penalties, if any, has not been provided for 

in the financial statements. An objection has been lodged with the CIT. There have been no developments 

during the financial year in respect of the above objection. 


71



34. Contingent liabilities (unsecured) (continued) 

(c) In connection with the disposal of the Company’s investment in Cosco-Feoso (Singapore) Pte Ltd (“CFS”) 

to its immediate holding company Cosco Holdings (Singapore) Pte Ltd (“CH”) in 1998, the minority shareholder 

of CFS has imposed certain conditions on the Company as part of the minority shareholder’s 

consent on the above disposal. 


These conditions require the Company to give an undertaking to the minority shareholder that the 

Company will comply with all the obligations under the Joint Venture Agreement (“JVA”) initially signed by 

the Company with various minority shareholders of this former subsidiary. In addition, the Company will 

remain to be bound to all guarantees, financial undertakings or indemnities given to third parties for or on 

behalf of CFS, notwithstanding that the Company is no longer a shareholder of CFS. 

The Company is liable to compensate the minority shareholder for any breach of the above conditions 

either by itself or CH on the JVA. Correspondingly, the Company has obtained an indemnity from CH to 

indemnify the Company for any losses, claims, costs, expenses or liabilities whatsoever in respect of the 

above conditions imposed by the minority shareholder. In view of this indemnity from CH, the directors 

are of the opinion that no loss or provision is required to be made in the financial statements of the 

Company. 

(d) The Company has issued a guarantee in the form of a bail bond of US$1,237,670 equivalent to $2,146,739 

(1999: $2,061,958) to a third party. This guarantee was issued in relation to an oil trading transaction 

entered into by CFS whereby another counter party has brought a legal suit against this third party. Based 

on legal advice obtained by CFS in 1998, the third party has a good claim on the losses it suffered and 

accordingly, a full provision of a similar amount has been made in the financial statements of CFS. There 

have been no developments during the financial year in respect of the above legal suit. 

The directors of the Company are of the opinion that no provision is required in the financial statements 

of the Company as CH has given an undertaking that it will indemnify the Company for any losses or 

liabilities that may arise in connection with the above bail bond.



35. Group segmental information 

(a) Primary reporting format – business segments 

Year ended 


Ship 

repairing 

and Rental of 

marine property and 

related property General Investment 

Shipping activities trading trading holding Group 

$ $ $ $ $ $ 

Revenue 85,982,800 3,663,909 7,595,107 64,688,971 – 161,930,787 

Segment result 20,055,950 544,082 5,303,232 32,260 (1,050,446) 24,885,078 

Finance income 5,769,943 

Finance costs (15,252,134) 

Share of results of 

associated 

companies (35,425) 

Profit before tax 15,367,462 

Tax (3,555,343) 

Group profit from 

ordinary activities 11,812,119 

Minority interest (1,034,772) 

Net profit 10,777,347 

Segment assets 274,358,076 8,480,426 154,972,421 8,724,871 29,280,037 475,815,831 

Associated 

companies 886,576 

Consolidated total 

assets 476,702,407 

Segment liabilities 35,429,620 2,114,562 8,123,982 314,439 4,423,004 50,405,607 

Bank borrowings 210,807,340 

Current tax 2,010,607 

Deferred tax 685,563 

Hire purchase 

creditors 146,833 


liabilities 264,055,950 

Capital expenditure 625,662 215,762 5,086 8,693 5,665 860,868 

Depreciation of fixed 

assets 15,573,588 477,465 81,151 48,880 30,560 16,211,644 

Depreciation of 

investment 

properties – – 1,320,579 – – 1,320,579 


73



35. Group segmental information (continued) 


Year ended 


Ship 

repairing 

and Rental of 

marine property and 

related property General Investment 

Shipping activities trading trading holding Group 

$ $ $ $ $ $ 

Revenue 115,860,361 3,424,526 8,029,631 74,097,369 – 201,411,887 

Segment result 9,378,091 542,906 7,664,685 390,747 (1,136,236) 16,840,193 

Finance income 2,622,958 

Finance costs (14,237,106) 

Share of results of 

associated 

companies (27,340) 

Profit before tax 5,198,705 

Tax (1,441,785) 

Group profit from 

ordinary activities 3,756,920 

Minority interest (2,941,943) 

Net profit 814,977 

Segment assets 281,867,342 8,883,927 147,068,826 19,930,407 76,320,490 534,070,992 

Associated 

companies 932,713 


assets 535,003,705 

Segment liabilities 36,072,795 2,091,541 6,275,634 1,693,959 6,303,720 52,437,649 

Bank borrowings 282,955,153 

Current tax 1,364,908 

Deferred tax 113,500 


liabilities 336,871,210 

Capital expenditure 54,072,204 54,177 70,010 5,828 10,775 54,212,994 

Depreciation of fixed 

assets 14,161,992 478,220 68,301 55,951 51,808 14,816,272 

Depreciation of 

investment 

properties – – 1,305,846 – – 1,305,846 

The division of the Group’s results, assets and liabilities into activities has been ascertained by reference to 

direct identification of assets, liabilities and revenue/cost centres.



35. Group segmental information (continued) 

There are no sales or other transaction between the business segments. Segment assets consist primarily of development 

property, trading property, investment properties, fixed assets, inventories, receivables and operating 

cash, and mainly exclude investment in associated companies. Segment liabilities comprise operating liabilities 

and exclude items such as taxation, bank borrowings and hire purchase creditors. Capital expenditure comprises 

additions to fixed assets. 

(b) By geographical locations 

The Company and its subsidiaries operate principally in Singapore and Malaysia except for the Group’s 

shipping companies which cover the world’s shipping routes. As such, it would not be meaningful to allocate 

revenue, total assets and capital expenditure to specific geographical segments for the Group’s shipping 

activities. 

36. Post balance sheet event 

Subsequent to the financial year end, one of the subsidiaries, Cosco (Singapore) Pte Ltd acquired for cash the 

entire issued and paid up capital of two corporations namely, Hanbo Shipping Limited and Sanbo Shipping 

Limited, which comprise 2 ordinary shares of HK$1 each respectively. These two corporations are incorporated 

in Hong Kong and their principal activities are the owning and chartering of vessels. The purchase consideration 

was HK$2 (equivalent to $0.45) for each corporation. The fair value of the net tangible assets of these corporations 

at the date of acquisition were approximately US$10,210 (equivalent to $17,709) each. 

37. Comparative figures 

Certain comparative figures have been reclassified to conform with the current financial year’s presentation. 

In particular, the comparatives have been adjusted or extended to take into account the requirements of the 

following revised Statements of Accounting Standard which the Group implemented in 2000: 

SAS 1 – Presentation of financial statements 

SAS 15 – Leases 

SAS 23 – Segment reporting 

The net profit is not affected by the adoption of the above standards in these financial statements as the Group 

was already following the recognition and measurement principles in those standards. 


75

Five Year Summary 

Notes 1996 1997 1998 1999 2000 

Profit and Loss Account $’000 $’000 $’000 $’000 $’000 

Turnover 

Operating profit/(loss) before 

440,794 574,780 325,129 201,412 161,931 

taxation and extraordinary items 

Share of profit/(loss) of associated 

3,865 3,489 3,747 5,226 15,403 

company 1 (12) (185) 88 (27) (35) 

3,853 3,304 3,835 5,199 15,368 

Taxation 

Profit/(loss) after taxation but 

(763) (1,270) (2,464) (1,442) (3,556) 

before extraordinary items 3,090 2,034 1,371 3,757 11,812 

Minority interest (105) 2,545 1,310 (2,942) (1,035) 

Profit/(loss) for the year 2,985 4,579 2,681 815 10,777 

Gross dividend 2,001 2,001 1,000 796 4,692 

Net dividend 1,481 1,481 740 593 3,526 

Balance Sheet 

Share capital 100,034 100,034 100,034 105,746 111,695 

Capital reserve 11,178 14,849 14,424 64,167 65,292 

Retained profits 22,538 22,403 24,276 24,498 31,749 

Minority interest 6,760 4,553 2,053 3,721 3,910 

140,510 141,839 140,787 198,132 212,646 

Fixed assets 234,334 258,073 211,001 252,326 246,480 

Investment property 21,861 21,622 96,361 95,503 95,937 

Associated company 1,156 969 1,018 933 886 

Loan to a related company – – 20,932 21,142 22,011 

Club memberships 518 448 472 472 676 

Investment 5 126 120 120 1,855 

Deferred expenditure – 1,288 31 – – 

Non-trade debtor – – – 1,008 1,091 

Net current assets/(liabilities) 37,595 71,366 25,815 27,889 (4,375) 

Non-current liabilities (154,959) (212,053) (214,963) (201,261) (151,915) 

140,510 141,839 140,787 198,132 212,646 

Ratios 

Basic earnings/(loss) per share (cents) 2 0.60 0.92 0.54 0.13 1.69 

Dividend per share - gross (%) 2.0 2.0 1.0 0.5 2.5 

Dividend cover (times) 3 2.0 3.1 3.6 1.4 3.1 

Net tangible assets per share (cents) 4 26.8 27.4 27.8 27.4 28.5 

Notes 

1. The equity method of accounting has been applied as from 1979. 

2. Earnings per share is calculated on the consolidated profit after tax, minority interest and preference dividend divided by the weighted average number of ordinary shares in issue during 

the year. 

3. The dividend cover is calculated on the consolidated profit/(loss) after tax and minority interest divided by the amount of equity dividend. 

4. Net tangible assets per share for 2000 is calculated, based on the number of shares in issue of 556,802,250 (1999: 527,056,750) after the share split and taking into account the 

amounts payable in the event of redemption of the preference shares. 

5. All computations per share have been adjusted to account for the share split of 1 ordinary share of $1.00 each divided into 5 ordinary shares of $0.20 each. 


Disclosure Requirements under Listing Manual 

Authorised Share Capital: 

S$250,000,000 comprising 1,250,000,000 ordinary shares of $0.20 each 

$378,293 comprising 37,829,333 Redeemable Convertibile Cumulative Preference Shares (“RCCPS”) of S$0.01 each 

(A) Class of Shares : Ordinary Shares of $0.20 each, fully paid 

Voting Rights : One vote per share 

Substantial Shareholders as at 16 April 2001 as shown in the Register of Substantial Shareholders:- 

Name of Substantial Shareholder No. of shares of $0.20 each fully paid 

Direct Deemed Total % 

Cosco Holdings (Singapore) Pte Ltd 332,495,000 – 332,495,000 59.72 

China Ocean Shipping (Group) Company – 332,495,000 332,495,000 59.72 

Distribution of shareholdings and number of shareholders as at 16 April 2001:- 

Size of Holdings No. of Holders % No. of Shares % 

1 — 1,000 45 1.72 29,400 0.01 

1,001 — 10,000 1,026 39.36 7,564,600 1.36 

10,001 — 1,000,000 1,509 57.88 93,500,750 16.79 

1,000,001 and above 27 1.04 455,707,500 81.84 

Grand Total 2,607 100.00 556,802,250 100.00 

Twenty largest shareholders as at 16 April 2001:- 

Name of shareholders Shareholdings % 

Cosco Holdings (Singapore) Pte Ltd 332,495,000 59.72 

Citibank Nominees Singapore Pte Ltd 40,775,000 7.32 

DBS Nominees Pte Ltd 13,050,000 2.34 

United Overseas Bank Nominees Pte Ltd 11,074,500 1.99 

BNP Paribas Merchant Banking Nominee Pte Ltd 6,040,000 1.08 

Hui Shune Ming 5,600,000 1.01 

Itochu Corporation 5,500,000 0.99 

Four Seas Nominees Pte Ltd 4,837,500 0.87 

Oversea-Chinese Bank Nominees Pte Ltd 3,605,000 0.65 

Overseas Union Bank Nominees Pte Ltd 3,376,750 0.61 

Keppel Bank Nominees Pte Ltd 3,191,000 0.57 

OUB Securities Pte Ltd 2,620,000 0.47 

Fong Kim Chit 2,523,000 0.45 

Vickers Ballas & Co Pte Ltd 2,235,000 0.40 

Lim Hock Yeong 2,105,000 0.38 

Citibank Consumer Nominees Pte Ltd 1,784,000 0.32 

HSBC (Singapore) Nominees Pte Ltd 1,550,000 0.28 

OCBC Securities Private Ltd 1,532,750 0.27 

DBS Securities Singapore Pte Ltd 1,505,000 0.27 

Chye Seng Tannery (Pte) Ltd 1,500,000 0.27 

Total 446,899,500 80.26 


77

Disclosure Requirements under Listing Manual 

(B) Class of Shares: Redeemable Convertible Cumulative Preference Shares (“RCCPS”) of $0.01 each 

Voting Rights: Refer to Article 4A(B)(g) 

Distribution of RCCPS holders and number of RCCPS holders as at 16 April 2001:- 

Size of Holdings No. of Holders % No. of RCCPS % 

1 — 1,000 22 30.56 20,499 0.06 

1,001 — 10,000 42 58.33 154,329 0.46 

10,001 — 1,000,000 7 9.72 230,331 0.69 

1,000,001 and above 1 1.39 33,048,124 98.79 

Grand Total 72 100.00 33,453,283 100.00 

Twenty-six largest RCCPS holders as at 16 April 2001:- 

Name of RCCPS holders No. of RCCPS % 

Evertop Enterprises Ltd 33,048,124 98.79 

Chye Seng Tannery (Pte) Ltd 100,000 0.30 

DBS Nominees Pte Ltd 40,732 0.13 

United Overseas Bank Nominees Pte Ltd 29,999 0.09 

Overseas Union Bank Nominees Pte Ltd 19,600 0.06 

Chua Tang Hock 14,000 0.04 

Lim Geok Seng 14,000 0.04 

Chong Tow San 12,000 0.04 

Ang Seng Tai 10,000 0.03 

Goh Ngoh Khang 9,000 0.03 

Ng Bak Soon 9,000 0.03 

Citibank Nominees Singapore Pte Ltd 8,333 0.03 

Huichoo Investment Pte Ltd 8,333 0.03 

Oversea-Chinese Bank Nominees Pte Ltd 7,333 0.02 

Png Chye Hong 7,000 0.02 

Tan Keng Soh 5,000 0.01 

Yong Khow Chung 5,000 0.01 

Chan Kok Chuan 4,000 0.01 

Chu Tee Chui 4,000 0.01 

Chua Kay Hock 4,000 0.01 

Lim Hong Tan 4,000 0.01 

Lim Kit Chia 4,000 0.01 

Ng Kim Soon 4,000 0.01 

Ong Mei Hsia 4,000 0.01 

Phua Eng Hai 4,000 0.01 

Tan Hong Boo @ Tan Kee Hong 4,000 0.01 

Total 33,383,454 99.79 

Remuneration of Directors 

The number of directors of the Company whose remuneration fell within the following remuneration bands is: 

2000 1999 

$500,000 and above – – 

$250,000 – $499,000 1 1 

Below $250,000 10 7 

11 8 


Notice of Annual General Meeting 

NOTICE IS HEREBY GIVEN that the Annual General Meeting of the Company will be held at Capricorn Room, Level 

1, Marina Mandarin Singapore, 6 Raffles Boulevard, Marina Square, Singapore 039594, on Monday, 28 May 2001, at 

11.00 a.m., to transact the following business:- 

Ordinary Business 

1. To receive and consider the audited Financial Statements for the year ended 31 December 2000 and the Reports 

of the Directors and Auditors thereon. (Resolution 1) 

2. To declare a first and final dividend of 0.5 cents per ordinary share of S$0.20 less 24.5% Singapore income tax. 

(Resolution 2) 

3. To approve payment of Directors' Fees of $79,200 [ 1999: $79,200 ]. (Resolution 3) 

4. (a) To re-elect Mr Lu Zhi Ming, a Director retiring under Article 98 of the Articles of Association of the 

Company. (Resolution 4) 

(b) To re-elect Mr Wei Jia Fu, a Director retiring under Article 98 of the Articles of Association of the Company. 


(c) To re-elect Ms Sun Yue Ying, a Director retiring under Article 84 of the Articles of Association of the 


(d) To re-elect Mdm Yao Hong, a Director retiring under Article 84 of the Articles of Association of the 


(e) To re-elect Mr Zhou Lian Cheng, a Director retiring under Article 84 of the Articles of Association of the 


(f) To re-elect Mr Liang Yan Feng, a Director retiring under Article 84 of the Articles of Association of the 


(g) To re-elect Mr Lin Li Bing, a Director retiring under Article 84 of the Articles of Association of the Company. 


(h) To re-elect Dr Wang Kai Yuen, a Director retiring under Article 84 of the Articles of Association of the 


5. To re-appoint Messrs PricewaterhouseCoopers as Auditors and to authorise the Directors to fix their remuneration. 


Special Business 

6. To consider and, if thought fit, to pass the following as Ordinary Resolutions:- 

(i) That the Directors be and are hereby authorised pursuant to the provisions of Section 161 of the Companies 

Act, Cap. 50 to allot and issue such of the unissued shares of the Company on such terms and conditions and 

with such rights or restrictions as they may deem fit PROVIDED ALWAYS THAT the aggregate number 

of shares to be issued pursuant to this Resolution shall not exceed fifty per cent (50%) of the issued share 

capital of the Company, of which the aggregate number of shares to be issued other than on a pro rata basis 

to existing shareholders shall not exceed twenty per cent (20%) of the issued share capital of the Company 

for the time being and that such authority shall continue in force until the conclusion of the next Annual 

General Meeting or the expiration of the period within which the next Annual General Meeting of the 

Company is required by law to be held, whichever is the earlier. (Resolution 13) 


79


(ii) That, in connection with or pursuant to the Cosco Group Employees’ Share Option Scheme (the “Scheme”), 

the Board of Directors of the Company be and is hereby authorised to from time to time allot and issue such 

number of Shares as may be required to be issued pursuant to the exercise of options granted by the Company 

pursuant to the Scheme during the continuance of this authority, provided always that the aggregate number 

of shares to be issued pursuant to the Scheme does not exceed 5 per cent. of the issued share capital of the 

Company from time to time. (Resoultion 14). 

(iii) That 

(a) approval be and is hereby given for the purposes of Chapter 9A of the Listing Manual of The Singapore 

Exchange Securities Trading Limited, for the Company, its subsidiaries and its target associated companies 

(as defined in the Listing Manual of The Singapore Exchange Securities Trading Limited) 

(“Group”) or any of them to enter into any of the transactions falling within the types of Interested 

Person Transactions described in the Company’s Circular to its shareholders dated 23 July 1977 

(“Circular”) with any person who is of the class of Interested Persons described in the Circular, subject 

to such transactions being made at arm’s length, on the Group’s normal commercial terms and in accordance 

with the methods and procedures of the Company for Interested Person Transactions as 

described in the Circular; 

Other Business 


(b) the Directors of the Company be and are hereby authorised to take such steps and exercise such discretion 

as the Directors of the Company may in their absolute discretion deem fit, advisable or necessary 

in connection with all such transactions; and 

(c) such approval shall, unless earlier revoked or varied by the Company in general meeting, continue to 

be in force until the next Annual General Meeting of the Company. (Resolution 15) 

7. To transact any other business that may be transacted at an Annual General Meeting. 

By Order of the Board 

Lawrence Kwan 

Secretary 

Singapore, 11 May 2001


Statement pursuant to Clause 902(4)(a) of the Listing Manual of the Singapore Exchange 

Securities Trading Limited 

Mr Lu Zhi Ming is a member of the Audit Committee and upon his re-appointment as a director, will continue to hold 

such office. Mr Lu is considered by the Board of Directors to be non-independent. 

Dr Wang Kai Yuen is a member of the Audit Committee and upon his re-appointment as a director will contimue to hold 

such office. Dr Wang is considered by the Board of Directors to be independent. 

Explanatory Notes on Special Business to be transacted:- 

Resolution (13), if passed, will empower the Directors of the Company from the date of the meeting until the next 

Annual General Meeting to issue shares in the Company up to and not exceeding in total 50 per cent of the issued share 

capital of the Company, for the time being, for such purposes as they consider would be in the interests of the Company. 

For issues and allotment of shares other than on a pro rata basis to all shareholders, the aggregate number of shares to 

be issued and allotted shall not exceed 20 per cent of the existing issued share capital of the Company. This authority 

will continue in force until the next Annual General Meeting of the Company, unless previously revoked or varied at a 

general meeting. 

Resolution (14), if passed, gives the authority to the Directors to issue shares in connection with the Scheme and, whilst 

this approval remains in force, to grant offers, agreements and options which could require shares to be issued (notwithstanding 

that such issue may take place after the expiration of this approval) provided that the aggregate number of 

shares to be issued pursuant to the Scheme shall not exceed 5 per cent of the issued share capital of the Company, for 

the time being. This authority is additional to the general authority to issue shares sought under Resolution (13). 

Resolution (15), if passed, will renew the General Mandate to allow the Company, its subsidiaries and target associated 

companies or any of them to enter into certain Interested Person Transactions with persons who are considered 

“Interested Persons” (as defined in Chapter 9A of the Listing Manual of The Singapore Exchange Securities Trading 

Limited). 

Note:- 

A member of the Company entitled to attend and vote at the above meeting may appoint a proxy to attend and vote on 

his behalf and such proxy need not be a member of this Company. The instrument appointing a proxy, together with 

the power of attorney (if any) under which it is signed or a notarially certified or office copy thereof must be lodged at 

the Registered Office of the Company at 143 Cecil Street #11-01, GB Building, Singapore 069542, not less than 48 hours 

before the Meeting. 


81


Proxy Form for Annual General Meeting 

I/We ____________________ of ____________________________ being (a) member(s) 

of the abovenamed company, hereby appoint _______________________________ of 

__________________________________ or failing him ________________________ 

of ____________________________________ as my/our proxy to vote for me/us and on 

my/our behalf at the Annual General Meeting of the Company to be held at 11.00 a.m. 

on Monday, 28 May 2001 and at any adjournment thereof. I/We direct my/our proxy to 

vote in the following manner: 

Resolutions: 

Ordinary Business 

1. To receive and consider the audited Financial Statements 

and Reports for the year ended 31 December 2000. 

2. To declare a first and final dividend of 0.5 cents per ordinary share 

of S$0.20 less 24.5% Singapore income tax. 

3. To approve payment of Directors' Fees. 

4. To re-elect Mr Lu Zhi Ming, a Director retiring under 

Article 98 of the Articles of Association of the Company. 

5. To re-elect Mr Wei Jia Fu, a Director retiring under 


6. To re-elect Ms Sun Yue Ying, a Director retiring under 


7. To re-elect Mdm Yao Hong, a Director retiring under 


8. To re-elect Mr Zhou Lian Cheng, a Director retiring under 


9. To re-elect Mr Liang Yan Feng, a Director retiring under 


10. To re-elect Mr Lin Li Bing, a Director retiring under 


11. To re-elect Dr Wang Kai Yuen, a Director retiring under 


12. To re-appoint Messrs PricewaterhouseCoopers as Auditors 

and to authorise the Directors to fix their remuneration. 

Special Business 

13. To authorise Directors to issue shares pursuant to Section 161 

of the Companies Act, Cap. 50 

14. To authorise Directors to issue shares pursuant to the Scheme. 

15. To approve the General Mandate for Interested Persons Transactions. 

As witness my/our hand this _______ day of __________________ 2001. 

Number of ordinary 

shares held 

IMPORTANT: 

The Proxy Form is not valid for 

use by RCCPS holders and CPF 

Investors and shall be ineffective 

for all intents and purposes if used 

or purported to be used by them. 

For Against 

Signature 


83

Proxy Form for Annual General Meeting 

Notes: 

1. Please insert the total number of shares held by you. If you have shares entered against your name in the 

Depository Register (as defined in Section 130A of the Companies Act, Cap. 50), you should insert that number 

of shares. If you have shares registered in your name in the Register of Members, you should insert that number 

of shares. If you have shares entered against your name in the Depository Register and shares registered in your 

name in the Register of Members, you should insert the aggregate number of shares entered against your name in 

the Depository Register and registered in your name in the Register of Members. If the number of shares is not 

inserted, this proxy form will be deemed to relate to the entire number of ordinary shares in the company registered 

in your name(s). 

2. A member entitled to attend and vote at a meeting of the company is entitled to appoint one or two proxies to 

attend and vote instead of him/her. 

3. Where a member appoints more than one proxy, he/she shall specify the proportion of his/her shareholding or the 

number of shares to be represented by each proxy. If no such proportion or number is specified, the first-named 

proxy may be treated as representing 100 per cent of the shareholding and any second-named proxy as alternate 

to the first-named. 

4. The instrument appointing a proxy, together with the power of attorney (if any) under which it is signed or a notarially 

certified or office copy thereof, shall be deposited at the Registered Office at 143 Cecil Street #11-01, GB 

Building, Singapore 069542, not later than 11.00 a.m. on Saturday, 26 May 2001. 

5. The instrument appointing a proxy shall be in writing under the hand of the appointor or of his attorney duly 

authorised in writing; or if such appointor is a corporation under its common seal, if any, and, if none, then under 

the hand of some officer duly authorised in that behalf. An instrument appointing a proxy to vote at a meeting 

shall be deemed to include the power to demand or concur in demanding a poll on behalf of the appointor. 

6. A corporation which is a member may authorise by resolution of its directors or other governing body such person 

as it thinks fit to act as its representative at the meeting, in accordance with Section 179 of the Companies Act, 

Cap. 50. 

7. Please indicate with an " X " in the appropriate space how you wish your proxy to vote. If this proxy form is 

returned without any indication as to how your proxy shall vote, he/she will vote or abstain from voting as he/she 

thinks fit. 

General: 

The Company shall be entitled to reject the instrument appointing a proxy or proxies if it is incomplete, improperly 

completed or illegible or when the true intentions of the appointer are not ascertainable from the instructions of the 

appointor specified in the instrument appointing a proxy or proxies. In addition, in the case of shares entered in the 

Depository Register, the Company may reject any instrument appointing a proxy or proxies lodged if the member, being 

the appointer, is not shown to have shares entered against his/her name in the Depository Register as at 48 hours 

before the time appointed for holding the Annual General Meeting, as certified by The Central Depository (Pte) Limited 

to the Company.

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