Tuan Sing : Statutory Reports and Accounts 2020

STATUTORY REPORTS

AND ACCOUNTS

82 Directors' Statement

1. Independent Auditor's Report

1. Statements of Financial Position

1. Consolidated Statement of Profit or Loss and Other Comprehensive Income
2. Consolidated Statement of Cash Flows
3. Statement of Changes in Equity

94 Notes to the Financial Statements

STATUTORY REPORTS AND ACCOUNTS

DIRECTORS' STATEMENT

FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2020

The Directors of the Company present their statement together with the audited consolidated financial statements of the	Group and
statement of financial position and	statement	of changes in equity of the Company for the	financial	year	ended 31	December	2020.
In the opinion of the Directors:
(a)	the consolidated financial	statements	of the Group and the statement of financial	position	and	statement	of	changes in equity of
	the Company as set out on pages 88 to 171 are drawn up so as to give a true and fair view of the financial	position of the Group
	and the Company as at 31 December 2020, and the financial performance, changes in equity and cash flows of the Group and
	changes in equity of the Company for the financial year then ended; and

1. at the date of this statement, there are reasonable grounds to believe that the Company will be able to pay its debts when they fall due.

1. DIRECTORS
   The Directors of the Company in office at the date of this statement are as follows:
   Mr Richard Eu Yee Ming
   Mr William Nursalim alias William Liem Mr Cheng Hong Kok
   Mr Choo Teow Huat Albert Ms Michelle Liem Mei Fung
2. ARRANGEMENTS TO ENABLE DIRECTORS TO ACQUIRE BENEFITS BY MEANS OF THE ACQUISITION OF

SHARES AND DEBENTURES

Neither at the end of the financial year nor at any time during the financial	year	was the Company a party to any arrangement
whose object is to enable the Directors of the Company to acquire benefits	by	means of the acquisition of shares or debentures
of the Company or any other body corporate.

3	DIRECTORS' INTERESTS IN SHARES AND DEBENTURES
	The Directors of the Company holding office at the end	of the financial year	had no interest in the share capital and debentures
	of the Company or of related corporations as recorded in the Register of Directors' Shareholdings kept by the Company for the
	purposes of Section 164 of the Singapore Companies Act (the "Act") except as follows:
		Holdings registered in		Holdings in which Director is
		name of Director		deemed to have an interest
		As at	As at		As at	As at
	Names of Directors and companies	31 December	1 January		31 December	1 January
	in which interests are held	2020	2020	2020	2020
	The Company (Ordinary Shares)
	Ms Michelle Liem Mei Fung	-	-	629,064,529(1)(2)	628,814,529(1)
	Mr William Nursalim alias William Liem	-	-	628,814,529(1)	628,814,529(1)
	The Company
	S$150 million 3-year 6% per annum Notes due 2020
	pursuant to the S$900,000,000 Multicurrency Medium
	Term Note Programme ("MTN Programme")
	Mr William Nursalim alias William Liem	-(3)	$500,000		-	-
	Mr Choo Teow Huat Albert	-	-		-(3)	$250,000
	S$65 million 2-year 7.75% per annum Notes due 2022
	pursuant to the MTN Programme
	Mr William Nursalim alias William Liem	$750,000	-		-	-
	Subsidiary
	SP Corporation Limited (Ordinary Shares)
	Ms Michelle Liem Mei Fung	-	-	28,146,319(1)	28,146,319(1)
	Mr William Nursalim alias William Liem	-	-	28,146,319(1)	28,146,319(1)

Note

(1 )	By virtue of interest in Nuri Holdings (S) Pte Ltd.

1. Ms Michelle Liem Mei Fung is deemed interested in 250,000 shares held by the Estate of David Lee Kay Tuan.
2. The S$150 million 3-year 6% per annum Notes due 2020 pursuant to the MTN Programme were redeemed in full.

By virtue of Section 7 of the Act, Ms Michelle Liem Mei Fung and Mr William Nursalim alias William Liem are deemed to have an interest in the Company and in all the related corporations of the Company.

There was no change in any of the above-mentioned Directors' interests between the end of the financial year and 21 January 2021.

82TUAN SING HOLDINGS LIMITED ANNUAL REPORT 2020

STATUTORY REPORTS AND ACCOUNTS

DIRECTORS' STATEMENT

FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2020

1. SHARE OPTIONS
   During the financial year, there were no options granted to take up unissued shares of the Company or any corporation in the Group.
   During the financial year, there were no shares of the Company or any corporation in the Group issued by virtue of the exercise of an option to take up unissued shares.
   At the end of the financial year, there were no unissued shares of the Company or any corporation in the Group under option.
2. AUDIT AND RISK COMMITTEE
   The members of the Audit & Risk Committee at the date of this statement are as follows:

Choo Teow Huat Albert	(Chairman, Non-Executive and Independent Director)
Richard Eu Yee Ming	(Non-Executive and Independent Director)
Michelle Liem Mei Fung	(Non-Executive and Non-Independent Director)

The Audit and Risk Committee performed functions specified in Section 201B (5) of the Act, the Listing Manual of the Singapore Exchange Securities Trading Limited ("SGX-ST") and the Singapore Code of Corporate Governance.

The Audit and Risk Committee met four times during the financial year ended 31 December 2020 and had reviewed, inter alia, the followings with the executive Director, external and internal auditors of the Company where relevant:

1. the external and internal audit plans; the scope of the internal audit procedures and results of the internal auditors' examination and evaluation of the Group's systems of internal accounting controls;
2. the Group's financial and operating results and accounting policies;
3. the consolidated financial statements of the Group and the financial statements of the Company before their submission to the Directors of the Company and the external auditors' report on those financial statements;
4. the half-yearly and annual announcements on the results and financial positions of the Company and the Group;

(e) the interested person transactions as specified under Chapter 9 of the SGX-ST Listing Manual Rules;

1. the co-operation and assistance given by the management to the Group's external and internal auditors; and
2. the re-appointment of the external and internal auditors of the Group.

The Audit and Risk Committee has full access to and has the co-operation of the management and has been given the resources required for it to discharge its functions properly. It also has full discretion to invite any Director and executive officer to attend its meetings. The external and internal auditors have unrestricted access to the Audit and Risk Committee.

The Audit and Risk Committee has recommended to the Directors the nomination of Deloitte & Touche LLP for re-appointment as the external auditors of the Group at the forthcoming Annual General Meeting of the Company.

6 EXTERNAL AUDITORS

Deloitte & Touche LLP have expressed their willingness to accept re-appointment.

On Behalf of the Directors

Mr Richard Eu Yee Ming

Chairman

Mr William Nursalim alias William Liem

Executive Director/Chief Executive Officer

9 March 2021

ANNUAL REPORT 2020 TUAN SING HOLDINGS LIMITED 83

STATUTORY REPORTS AND ACCOUNTS

INDEPENDENT AUDITOR'S REPORT

TO THE MEMBERS OF TUAN SING HOLDINGS LIMITED

Report on the Audit of the Financial Statements

Opinion

We have audited the financial statements of Tuan Sing Holdings Limited (the "Company") and its subsidiaries (the "Group"), which comprise the consolidated statement of financial position of the Group and the statement of financial position of the Company as at 31 December 2020, and the consolidated statement of profit or loss and other comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows of the Group and the statement of changes in equity of the Company for the year then ended, and notes to the financial statements, including a summary of significant accounting policies, as set out on pages 88 to 171.

In our opinion, the accompanying consolidated financial statements of the Group and the statement of financial position and statement of changes in equity of the Company are properly drawn up in accordance with the provisions of the Companies Act, Chapter 50 (the "Act") and Singapore Financial Reporting Standards (International) ("SFRS(I)s") so as to give a true and fair view of the consolidated financial position of the Group and the financial position of the company as at 31 December 2020 and of the consolidated financial performance, consolidated changes in equity and consolidated cash flows of the Group and of the changes in equity of the Company for the year ended on that date.

Basis for Opinion

We conducted our audit in accordance with Singapore Standards on Auditing ("SSAs"). Our responsibilities under those Standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Group in accordance with the Accounting and Corporate Regulatory Authority Code of Professional Conduct and Ethics for Public Accountants and Accounting Entities ("ACRA Code") together with the ethical requirements that are relevant to our audit of the financial statements in Singapore, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ACRA Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements of the current year. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Revenue recognition of development properties

The Group recognises revenue based on the stage of completion for the sale of development properties under development on the terms and specifications as set out in the contracts. The analysis of whether the contracts comprises one or more performance obligations, determination of whether the performance obligations are satisfied over time and the method used to measure progress for revenue recognition for these development properties requires estimate by management.

The stage of completion is measured by reference to certifications of the value of work performed to date by third party quantity surveyors as compared to the estimated total construction costs of the development project as approved by management. Significant judgements are required to determine the total construction costs which include estimation for variation works and any other claims from contractors. Any changes to the estimated total construction costs will impact the stage of completion, and consequentially the revenue recognised.

Our audit performed and responses thereon

We read the sales and purchase agreements of development properties and discussed with management to understand the relevant terms of the contracts and the basis of management's identification of performance obligations to determine whether the criteria for recognising revenue over time were met. We performed procedures to evaluate the design and implementation of the relevant controls put in place by the Group in respect of revenue recognition from the development properties.

We also reviewed management's estimated total construction cost for each of the development projects, and assessed the reasonableness of the assumptions and estimates applied by management which included key elements such as construction costs and variation works, taking also into consideration the need by management to account for any effects of significant or unusual events that occurred during the year which may impact the estimated total construction cost. In addition, we also used the value of the work performed to date as provided by third party quantity surveyors, compared to the estimated total construction cost and performed arithmetic computations of the stage of completion and revenue to be recognised for the year.

We found management's basis of identifying performance obligations and the basis of revenue recognition for these development properties to be appropriate. We also found that the key assumptions applied by management for estimated total construction costs to be reasonable based on supportable information available.

Further disclosures are made in Note 28 to the financial statements.

Valuation of development properties

The Group has residential properties under development and completed properties for sale which are mainly located in Singapore. These development properties are stated at the lower of cost and net realisable values.

The determination of the estimated net realisable value of these development properties is dependent upon the Group's expectations of future selling prices. Weakening market conditions and slow take up rate of development properties may impact and create downward pressure on the selling prices of these properties. There is a risk that the estimates of net realisable values may exceed future selling prices, resulting in losses when properties are sold.

84TUAN SING HOLDINGS LIMITED ANNUAL REPORT 2020

STATUTORY REPORTS AND ACCOUNTS

INDEPENDENT AUDITOR'S REPORT

TO THE MEMBERS OF TUAN SING HOLDINGS LIMITED

Key Audit Matters (cont'd)

Valuation of development properties(cont'd)

Our audit performed and responses thereon

We discussed with and evaluated management's basis used in their assessment in determining whether the Group's properties under development and completed properties for sale are impaired and the amount of impairment to be recorded if any, based on the Group's estimated selling prices of these properties, by comparing where available, to recently transacted prices for the same project and prices of past sales of comparable properties in the vicinity. In addition, we made reference to valuation performed by professional external valuers engaged by the Group. We also performed sensitivity analysis on the estimated selling prices used by management in their assessment and considered the adequacy of the disclosures in respect of the impairment losses, if any, presented in the financial statements for these properties.

We found management's estimates to be reasonable based on supportable information available, and that management had applied their knowledge of the business in determining the estimated selling prices of the respective properties, by taking into consideration the selling prices of recent sales of the respective properties and that of comparable properties, and expectations of the property market conditions. We found that the Group had appropriately recorded the impairment loss in profit or loss and the related disclosures to be appropriate.

Further disclosures are made in Note 10 to the financial statements.

Valuation of investment properties and hotel properties

The Group has investment and hotel properties stated at fair value, determined based on professional external valuers engaged by the Group.

The valuation process involves significant judgement and estimation. The valuations are dependent on the valuation methodology applied and the underlying assumptions used, which includes price per square metre of market comparables used; capitalisation rates; price per square metre of gross / net lettable area and value per room for hotel properties. A change in the key assumptions applied may have a significant impact to the valuation.

Our audit performed and responses thereon

We read the terms of engagement of the external valuers engaged and also considered the objectivity and independence of the external valuers including their qualifications and competency.

We considered the appropriateness of the valuation techniques used by the external valuers for the respective investment and hotel properties, taking into account the profile and type of these properties. We discussed with the external valuers on the results of their work, and compared the key assumptions used in their valuations by reference to externally published benchmarks or comparables where available and considered whether these assumptions are consistent with the current market environment. We have also engaged our internal valuation specialists to assist in reviewing the valuation reports issued by external independent professional valuers for the Group's major investment and hotel properties by assessing whether the valuation methodology and key assumptions adopted is reasonable.

Some of the external valuers highlighted that given the unprecedented set of circumstances on which to base a judgment, less certainty and higher degree of caution should be attached to their valuation than would normally be the case. Due to the unknown future impact that the Coronavirus Disease ("COVID-19") pandemic might have on the real estate market, the external valuers have also recommended to keep the valuation of these properties under frequent review.

We also considered the adequacy of the disclosures in the financial statements, in describing the inherent degree of subjectivity and key assumptions in the estimates.

We found the external valuers to have the appropriate level of qualifications and experience, and that the valuation methodologies adopted were in line with generally accepted market practices for similar properties. The key assumptions used were within reasonable range, taking into account historical rates and available industry data for comparable markets and properties. We also found that the related disclosures in the financial statements to be appropriate.

Further disclosures on the investment properties and hotel properties are found in Notes 14 and 12 to the financial statements respectively.

Information Other than the Financial Statements and Auditor's Report Thereon

Management is responsible for the other information. The other information comprises the Directors' Statement but does not include the financial statements and our auditor's report thereon, which we obtained prior to the date of this auditor's report, and the Company and Strategy, 5-Year Financial Highlights, Corporate Stewardship, Management Discussion and Analysis, Corporate Governance Report, Sustainability Report and Shareholding Statistics reports, which are expected to be made available to us after that date.

Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information identified above when it becomes available and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated.

ANNUAL REPORT 2020 TUAN SING HOLDINGS LIMITED 85