ANNUAL REPORT 2024 KEONG HONG HOLDINGS LIMITED ENSURING STEADY RECOVERY SUSTAINABLE GROWTH
04 Chairman’s Message 10 Financial Highlights 12 Financial and Operations Review 18 Board of Directors 22 Key Management 23 Corporate Information 24 Corporate Governance Report 48 Directors’ Statement 53 Independent Auditors’ Report 58 Financial Statements 139 Analysis of Shareholdings 141 Notice of Annual General Meeting 144 Additional Information on Directors Seeking Re-election Proxy Form CONTENTS
OVERCOMING ADVERSITIES Keong Hong’s financial performance improved significantly in FY2024 after completing several pandemic-impacted projects.
DEAR SHAREHOLDERS, I am pleased to present our Annual Report 2024 and to highlight the improvement we have made in the past year. We have narrowed our losses in the construction sector, with the completion of several challenging projects which had been impacted by the COVID-19 pandemic. Overall, we have benefitted from the improved economic conditions, with Singapore’s economy expanding by 4.3% year-on-year in the fourth quarter of 2024, and by 4.0% for the whole of 20241. The construction sector registered a 4.8% growth over the same period last year, fuelled by an increase in public sector projects. Despite the economic expansion, inflationary pressures persisted with rising interest rates, increasing borrowing costs for businesses and dampening consumer demand. The war in the Middle East and the RussianUkraine conflict have had some impact on logistics operations. We have worked within the constraints of a challenging environment by being prudent in our financial decisions, keeping a lean workforce and restructuring our borrowing facilities so as to strengthen our cashflow. As such, we are in a more financially comfortable position to face future challenges and seize growth opportunities where they present themselves. FINANCIAL HIGHLIGHTS We registered a 13.6% decrease in revenue of S$172.6 million for the financial year ended 30 September 2024 (“FY2024”) as compared to revenue of S$199.8 million in the financial year ended 30 September 2023 (“FY2023”). We recorded a negative gross margin of 3.1% on the back of a gross loss of S$5.4 million in FY2024. This is compared against a negative gross margin 1 Ministry of Trade and Industry, “Singapore’s GDP Grew by 4.3 Per Cent in the Fourth Quarter of 2024 and by 4.0 Per Cent in 2024,” 2 January 2025. of 13.2% following on the gross loss of S$26.4 million in the previous financial year. The Group recorded other income of S$8.7 million as compared to S$16.9 million in FY2023, a decrease of 48.3%. The higher other income recorded in FY2023 was mainly attributed to the one-off gain on disposal of investments properties in Japan. The Group, consequently, recorded net loss after tax of S$3.9 million compared to a net loss after tax of S$51.2 million in FY2023. Our cash and cash equivalents were S$20.8 million (FY2023: S$14.6 million). The Group recorded positive net cash from operating activities of S$8.8 million in FY2024. Net asset value per share stood at 21.5 cents as at 30 September 2024. Considering our financial performance and taking into consideration the Group’s overall financial position, working capital requirements and future investment needs, the Board is not proposing any dividends for the financial year FY2024. This is in line with our commitments to ensure financial robustness and the long-term sustainable growth of the Group. BUILDING CONSTRUCTION – STEADY RECOVERY POISED FOR AN UPTURN Our construction sector was the strongest performing of our business divisions. We have narrowed our losses in this sector, with many of our unprofitable projects having been completed. We have made significant progress in our ongoing projects and are on schedule for projected completions. 04 KEONG HONG HOLDINGS LIMITED CHAIRMAN’S MESSAGE
Our first mixed-use commercial construction project in the Central Business District, Solitaire on Cecil, has completed ground strengthening and progressed to piling phase. The project consists of a 20-storey office building comprising restaurants on the first storey with two basement carparks on Cecil Street. Our residential construction project, Sky Eden @ Bedok, had its topping out ceremony before Lunar New Year on 27 January 2025. Phase 1 of the additions and alterations work to the Grand Hyatt Singapore Hotel was completed in April 2024 with the soft opening having been held in July 2024. The next phase, which comprises among other things, refurbishment to over 400 rooms, is slated for completion in the second quarter of this year. With respect to our public sector projects, Phase 2 of the new National Skin Centre at Mandalay Road, comprising a five-storey building with basement and Mechanical and Electrical roof was awarded Temporary Occupation Permit (“TOP”) in December 2024. We hope to receive the Certificate of Substantial Completion in the first quarter of 2025. The Punggol Regional Sports Centre is almost completed. However, with additional variation works on rain screens and football pitch lightings, the TOP is expected in the third quarter of this year. Bored piling has been completed for the Housing and Development Board’s (“HDB”) Tengah Plantation C5 project, with superstructure structural works reaching the fourth and sixth storeys for the more advanced blocks. We enter 2025 with a healthy order book currently valued at approximately S$368 million as at 30 September 2024. With our latest portfolio of projects, our residential projects and commercial projects are in the proportion of 49% and 51% respectively. 05 ANNUAL REPORT 2024 CHAIRMAN’S MESSAGE
2 Building and Construction Authority, “Construction Demand to Remain Strong for 2025,” 23 January 2025. 3 Urban Redevelopment Authority, “Release of 4th Quarter 2024 real estate statistics,” 24 January 2025. Total construction demand is expected to range between S$47 billion and S$53 billion in 20252. The demand will be driven from both private as well as public sector initiatives such as construction of Changi Airport Terminal 5, the expansion of the Marina Bay Sands Integrated Resort, new HDB flats, the cross-island MRT Line contracts, Tuas Port development, and major road enhancements and drainage improvement. With many of the public sector projects ongoing for the foreseeable future and more in the pipeline, particularly health, educational and community facilities, total construction demand in the medium term is expected to be between S$39 billion and S$46 billion per year from 2026 to 2029. Considering the opportunities in both public and private sector construction, we will continue to seek new projects with attractive returns, given our strong track record in the sector. PROPERTY DEVELOPMENT AND INVESTMENT – CHALLENGING NEAR-TERM OUTLOOK, LONG-TERM FUNDAMENTALS UNCHANGED Recent data have indicated that the property sector is beginning to moderate slightly after reaching frenzied levels in recent years. Private housing pricing increased by 2.3% in the fourth quarter of 2024, with an increase of 3.9% for the whole of 2024. This represents a moderation from the increase of 6.8% in 2023 and 8.6% in 2022. The effects of increased Additional Buyer’s Stamp Duty rates, higher borrowing costs and uncertain economic growth have turned buyer sentiment cautious. Developers sold 6,469 private residential units for the whole of 2024 as compared with 6,421 units in 20233. Despite the relatively muted property market as compared with recent years, in land-scarce Singapore with limited supply of prime locations, property development projects which afford healthy investment returns will always be in demand. While there are no plans for land acquisition in the immediate future, it remains a sector that is of particular interest and importance to the Group. As such, we will continue to be on alert for opportunities which afford an attractive return on investment. In the meantime, we will ensure that we are in a strong financial position to take advantage of such opportunities should they present themselves. HOTEL DEVELOPMENT AND INVESTMENT – TOURISM REVIVAL The Maldivian tourism sector continues to improve, recording 2.0 million tourists in 2024 as compared with 1.9 million tourists in the previous year (an 8.9% increase). Nevertheless, high operating costs impacted the profitability of our investment, with the Group registering a share of losses in our two hotel investments, Mercure Maldives Kooddoo Hotel and Pullman Maldives Maamutaa Resort in which we have a 49% equity interest. We have taken steps to address this, among other measures, restructuring the costs’ structure, which will improve our liquidity. We are also looking at ways to attract more tourists and are currently studying proposals to achieve this. We have initiated the process of selling our minority interest in Katong Holdings Pte Ltd. The sale would enable us to utilise the net proceeds from the sale for our working capital requirements as well as for potential business opportunities. The divestment will allow the Group to focus on other aspects of its business and strategic endeavours instead of having to allocate resources and effort to this investment. BUILDING FINANCIAL AND OPERATIONAL RESILIENCE With the completion of the Group’s disposal of its two commercial properties in Honmachi and Minamihorie, Osaka, Japan in February 2023, the Group’s liquidity has improved with enhanced working capital and stronger cashflow. There are no plans at the moment to reinvest these realised gains from our investments but the Group will not discount future investments which will be beneficial to our portfolio and financial strategy. While raw material costs have stabilised and, in some cases, decreased, operating, manpower and borrowing costs coupled with a slowing economy make it imperative that cost management, 06 KEONG HONG HOLDINGS LIMITED CHAIRMAN’S MESSAGE
productivity enhancement and digital investment remain front and centre. Given the shortage of skilled labour, digitalisation will be a key strategy. Building on the digitalisation experience gained from implementing Aptiv8 IT Solutions and AirSquire’s cloud-based 360-degree virtual sites at Grand Hyatt Singapore Hotel, we are continuing our IDD journey with the experimental implementation of Doxa Connex’s procurement-to-payment system company-wide, and Autodesk Construction Cloud on new projects. In Maldives, Lumitics Artificial Intelligence (“AI”) smart food waste tracker has recently been installed at Pullman Maldives Maamutaa Resort and Mercure Maldives Kooddoo Hotel offering insights to Chefs on how to reduce their food waste by up to 40% and food cost by 2% to 8%. For HDB’s Tengah Plantation C5 project, we use IFCA Contract Management Solution to connect project site offices, contract and cost management and purchasing to pursue excellence in project cost control. We have adopted AI in enhancing worker safety as it remains our priority. This, together with ongoing worker safety education and upskilling initiatives provide a safer, more effective and productive work environment for all. We have also implemented digitalisation in various stages of our construction process, for example QR code enabled components which can be tracked. SOCIAL RESPONSIBILITY AND SUSTAINABILITY We have been a staunch advocate of training and education for the next generation of professionals in our field. We continued to support Institute of Technical Education’s (“ITE”) Work-Learn Technical Diploma programme. We have one ITE trainee continuing his Work-Learn Technical Diploma programme at the Tengah Plantation C5 project site. On the sustainability front, the solar panel installation at our Chin Bee factory has been commissioned and begun providing green energy since July 2023, supplementing the power requirement at the production floors and administration blocks of 20 Chin Bee Drive and 21 Fourth Chin Bee Road. The solar panels are capable of generating 800 amperes of green electricity and offsetting up to 215 tons of carbon dioxide per year. New sustainability initiatives have also been implemented in Maldives. Food composters have been installed at both the resort hotels to convert food waste to compost as fertilisers for the gardens. Please refer to our Sustainability Report 2024 for an in-depth account of our sustainability and conservation programmes. BUILDING ON OUR CORE STRENGTH; ENSURING SUSTAINABLE GROWTH We have never put short-term gains ahead of long-term sustainable growth and this strategy is set to continue. Tight costs control, careful investment decisions, prudent financial planning as well as an effective and comprehensive project management have stood us well through downturns and uptrends. We are certain that this will continue to stand us in good stead, allowing us to growth sustainably and assuredly in the long-term. APPRECIATION AND ACKNOWLEDGEMENTS Greatest appreciation from our Board of Directors and me to our staff and executive management for their efforts and hard work throughout the year. I would like to take this opportunity to welcome on board our new Chief Financial Officer, Mr Heng Fook Chang who brings with him a wealth of experience. We are certain he will be a great asset to our team. Lastly, thank you to our business partners, associates, customers, and shareholders for continuing to support the Group. Working together, we are confident of bringing greater value to all our stakeholders and the community at large. LEO TING PING RONALD Chairman and Chief Executive Officer 07 ANNUAL REPORT 2024 CHAIRMAN’S MESSAGE
STEADY RECOVERY The Group is poised to benefit from improved economic conditions, higher construction demand and strong tourism growth.
NET LOSS ($’000) The Group recorded a net loss after tax of S$3.9 million in FY2024, as compared to a net loss after tax of S$51.2 million in FY2023. GROSS PROFIT/LOSS ($’000) In line with the lower revenue recorded, cost of sales decreased to S$178.0 million in FY2024 as compared to S$226.2 million in FY2023. The Group significantly narrowed its gross loss to S$5.4 million or by 79.4% from S$26.4 million in FY2023. The decrease in gross loss was mainly attributable to the near completion of pre-pandemic projects which had higher construction costs for materials and labour. REVENUE ($’000) Group’s revenue decreased by 13.6% to S$172.6 million. The decrease in revenue was mainly due to lower revenue recognition for construction projects which have already obtained Temporary Occupation Permit in FY2023, namely The Antares, Wilshire Residences and Sky Everton, while construction projects such as Tengah Plantation C5 and Solitaire on Cecil have just started. FY2021 FY2022 FY2023 FY2024 76,952 148,067 199,789 172,597 FY2021 FY2022 7,488 (30,792) FY2023 FY2024 (26,366) (5,428) FY2021 FY2022 FY2023 FY2024 (20,180) (46,591) (51,216) (3,916) 10 KEONG HONG HOLDINGS LIMITED FINANCIAL HIGHLIGHTS
RETURN ON ASSETS (PER CENT) RETURN ON EQUITY (PER CENT) BASIC EPS (SINGAPORE CENTS) FY2021 FY2022 FY2023 FY2024 (7.5) (19.5) (21.1) (1.7) NET ASSET VALUE (SINGAPORE CENTS) FY2021 FY2022 FY2023 FY2024 67.5 47.2 21.8 21.5 FY2021 FY2022 FY2023 FY2024 (5.8) (17.1) (22.5) (2.1) FY2021 FY2022 FY2023 FY2024 (11.6) (38.7) (57.1) (5.6) 11 ANNUAL REPORT 2024 FINANCIAL HIGHLIGHTS
Singapore registered growth of 4.0% in 20241 as compared to the modest 1.1% in 2023. Our results, likewise, mirrored the overall improvement in economic conditions. In particular, we registered commendable performance in our construction sector, in tandem with the performance of that sector in the overall economic performance of Singapore. The construction sector in Singapore posted growth of 4.8% easing from the 5.2% growth in 2023. Keong Hong Holdings Limited (“Keong Hong” or together with its subsidiaries, the “Group”), turned in revenue of S$172.6 million for the full year ended 30 September 2024 (“FY2024”) as compared to S$199.8 million for the full year ended 30 September 2023 (“FY2023”). This represents a contraction in revenue of 13.6%. The decrease in revenue was mainly due to lower revenue recognition of construction projects which have obtained Temporary Occupation Permit (“TOP”) in FY2023, namely The Antares, Wilshire Residence and Sky Everton, while construction projects such as Tengah Plantation C5 and Solitaire on Cecil have just started. The Group, however, has made great strides in narrowing its gross loss and turning in a net profit. The Group significantly narrowed its gross loss to S$5.4 million or by 79.4% from S$26.4 million in FY2023. The decrease in gross loss was mainly attributable to the near completion of pre-pandemic projects which had higher construction costs for materials and labour, and as well as the effectiveness of our cost management strategies. In line with the lower revenue, cost of sales decreased by 21.3% to S$178.0 million in FY2024 as compared to S$226.2 million in FY2023. Consequent to our lower gross loss, we recorded a negative gross profit margin of 3.1%, as compared to a negative gross profit margin of 13.2% in FY2023. The Group’s registered other income of S$8.7 million in FY2024, as compared to S$16.9 million in FY2023, representing a 48.3% decrease, mainly attributable to the one-off gain on disposal of investment properties of S$7.8 million and higher interest income in FY2023. The Group’s share of results from its joint ventures decreased to S$44,000 in FY2024 as compared to S$0.3 million in FY2023. The Group’s share of net losses of associates increased to S$10.6 million in FY2024 as compared to S$8.4 million in FY2023. The increase was mainly attributed to its investment in an associate that owns and operates an airport, hotel and resort in the Maldives. A higher loss was reported arising from higher operating and finance costs during the current financial year reported on. Following from the above, the Group recorded a net loss after tax of S$3.9 million in FY2024, as compared to a net loss after tax of S$51.2 million in FY2023. Balance sheet-wise, as at 30 September 2024, the Group’s net cash position was S$20.8 million as compared to S$14.6 million in FY2023. Total assets stood at S$194.3 million as against total liabilities of S$143.7 million (FY2023: total assets of S$181 million and total liabilities of S$129.7 million). The Group’s gearing ratio was 0.65 (FY2023: 0.65). The Group recorded loss per share of 1.7 cents and a net asset value per share of 21.5 cents. BUILDING AND CONSTRUCTION – HIGHLIGHTS Despite a strongly-performing construction sector and overall improvement in the economic conditions, the Group still had to operate within a challenging environment of high interest rates, increased business borrowing costs, manpower and productivity challenges. Nonetheless, we succeeded in leveraging 1 Ministry of Trade and Industry, “Singapore’s GDP Grew by 4.3 Per Cent in the Fourth Quarter of 2024 and by 4.0 Per Cent in 2024” 2 January 2025. 12 KEONG HONG HOLDINGS LIMITED FINANCIAL AND OPERATIONS REVIEW
on technology, managing costs and improving our operations to overcome some of these challenges. The construction order book as at 30 September 2024 stood at approximately S$368 million, with our residential and commercial projects forming 49% and 51% of our portfolio respectively. The Group’s current project pipeline consists of Solitaire on Cecil and Tengah Plantation C5. Sky Eden @ Bedok had its topping out ceremony before Lunar New Year on 27 January 2025. Solitaire on Cecil, a 20-storey office building development comprising restaurants on the first storey with two basement carparks on Cecil Street has completed ground strengthening works and is progressing on to bored piling and foundation phase. Bored piling works for Housing and Development Board’s Tengah Plantation C5 project have been completed with structural works having progressed to fourth and sixth storeys for the more advanced blocks. With Phase 1 of the additions and alterations work to the Grand Hyatt Singapore Hotel having been completed in April 2024 and Phases 2 and 3 both completed in July 2024, we have now moved on to Phase 4. This phase includes, among other improvements, the refurbishment of over 400 rooms, which remains on track for completion in the second quarter of this year. Phase 2 of the new National Skin Centre at Mandalay Road, comprising a five-storey building with basement and Mechanical and Electrical roof obtained TOP in December 2024 and the award of the Certificate of Substantial Completion is anticipated to be in the first quarter of 2025. The TOP date for Punggol Regional Sports Centre has been revised to July 2025 due to additional variation works involving rain screens and football pitch lightings. The Building and Construction Authority (“BCA”) has projected the total construction demand in 2025 to range between S$47 billion and S$53 billion, mainly driven by several large scale projects such as such as Changi Airport Terminal 5 and the expansion of the Marina Bay Sands Integrated Resort, as well as public housing development and upgrading works such as Build-To-Order flats, Cross Island MRT Line contracts, and Tuas Port developments. Over the medium-term, the total construction demand is projected to reach an average of between S$39 billion and S$46 billion per year from 2026 to 2029 due to public sector housing, community educational and health projects and urban rejuvenation works2. We will continue to focus efforts on winning projects in both the private as well as public housing and healthcare sectors. We are confident that our track record in these areas will stand us in good stead to attain new projects. PROPERTY DEVELOPMENT AND INVESTMENTS The property market in 2024 lost some momentum from 2023. For the whole of 2024, prices of private residential projects increased by 3.9% as compared to 6.8% in 2023 and 8.6% in 20223. The effects of increased Additional Buyer’s Stamp Duty (“ABSD”) rates, higher borrowing costs and uncertain economic growth have negatively impacted buyer sentiment. 3,420 completed and uncompleted units were sold in the fourth quarter of 2024 as compared to 1,160 units in the previous quarter, with 6,469 units sold for the whole of 2024 as compared to 6,421 units in 20234. In land scarce Singapore, the demand for property will always remain strong. Furthermore, given Singapore’s attractiveness as an investment haven, with its transparent and robust legal environment, stable government and strategic location, property as an asset class will always be attractive for foreign and local investors. There may, in the near term, be vicissitudes brought about by, among other things, cooling measures or cyclical economic downturns but in the longer term, property will maintain its lustre. While there are no plans for land acquisition in the immediate future, it remains a sector that is of particular interest and importance to the Group. We will continue to look out for opportunities which will provide an attractive return on investment. 2 Building and Construction Authority, “Construction Demand to Remain Strong for 2025”, 23 January 2025. 3 Urban Redevelopment Authority, “Release of 4th Quarter 2024 real estate statistics,” 24 January 2025. 4 Urban Redevelopment Authority, “Release of 4th Quarter 2024 real estate statistics,” 24 January 2025. 13 ANNUAL REPORT 2024 FINANCIAL AND OPERATIONS REVIEW
HOTEL DEVELOPMENT AND INVESTMENTS The tourism sector continued to make up ground post-COVID-19 pandemic and is on its way to making a full recovery. As of the first nine months of 2024, global tourism has recovered 98% of pre-pandemic levels5. In tandem with the strong global tourism growth, Maldives’ tourism sector continued to perform strongly which augured well for our two resorts, the Mercure Maldives Kooddoo Hotel and Pullman Maldives Maamutaa Resort. Maldives received 2.0 million visitors for 2024 as compared with 1.9 million tourists in the previous year (an 8.9% increase)6. The combined average occupancy of Mercure Maldives Kooddoo Hotel and Pullman Maldives Maamutaa Resort for 2024 was 62.5%, higher than the industry average of 59.1%. Nevertheless, our investment bottomline was impacted due to high operating costs. The Group registered a share of losses in our two hotel investments. We are working closely with the hotel operator, Accor, on improving the performance of these two properties among other measures. Despite some threats to this sector such as weaker consumer sentiment in 2025 amid global uncertainties, the overall demand for travel will continue to contribute to the sector’s resilience. SUSTAINING COMPETITIVENESS THROUGH INNOVATION, DIGITALISATION AND PRODUCTIVITY We have fully integrated Design for Manufacturing and Assembly (“DfMA”) technologies into our manufacturing process. The Prefabricated Prefinished Volumetric Construction (“PPVC”), Prefabricated Bathroom Unit (“PBU”), and Mechanical Electrical Plumbing (“MEP”) modules improve productivity at construction sites, as the manufacturing of these building components can be completed off-site in a safe and controlled environment. We have upgraded our digital capability in Building Information Modelling (“BIM”), Virtual Design and Construction (“VDC”), and Virtual Reality (“VR”). We are proud to be one of the pioneers in adopting the Digit-alpha capability transformation Programme, a pilot project with VR as a core module sponsored by Info-communications Media Development Authority. We will continue to invest in innovation and new technology to improve our operations, enhance productivity and maintain our competitive advantage. A SKILLED, PRODUCTIVE AND SATISFIED WORKFORCE OUR CORE COMPETITIVE ADVANTAGE As with previous years, our staff were sent for various reskilling, upskilling and other productivity training programmes to enable them to operate effectively and more importantly safely at the worksites and our offices. With the emphasis on innovative technology being deployed, we ensure all affected staff are well-equipped to operate confidently in this digital age. For example, we have established a drone team and have sent them for certified drone training, comprising of practical and theory sessions. This will enable them to attain a license to operate drones for our building and construction projects. These drones will be utilised for a variety of applications. We continued to send our staff for training in certification courses such as those for Green Mark Manager and Specialist Diploma in Construction Productivity as well as production-related areas such as Good Industry Practices, BIM Management and BIM Architecture to ensure they are well-versed in specific sustainability and innovation programmes. Our basic skilled workers were enrolled for higher skills training such as in the BCA Coretrade Skills training and Multi-Skilling training. To-date, 43.5% of our 259 work permit holders are higher skilled (R1) certified, surpassing the minimum 10% as required by the Ministry of Manpower (“MOM”). We met work-site safety targets over and above compliance with the Workplace Safety and Health (“WSH”) Act. Training in workplace safety included designation of Peer Support Leaders to reach out to fellow workers with mental health issues or in distress. We also participated in the CultureSAFE program to cultivate a progressive and prevalent WSH culture in the organisation which extends beyond merely executing WSH practices. By actively promoting a safety awareness culture, we ensure that every employee embodies and expounds our WSH values for an accident-free, safe and healthy work environment. 5 UN Tourism, “Global tourism set for full recovery by end of the year with spending growing faster than arrivals,” 4 December 2024. 6 Ministry of Tourism, Republic of Maldives. 14 KEONG HONG HOLDINGS LIMITED FINANCIAL AND OPERATIONS REVIEW
We provide recreational amenities such as mini games courts, gym sites and planting corners for relaxation, well-being and exercise, at our various worker accommodations. Proper rest and canteen areas provide on-site relief and relaxation for workers during their shifts. Our overseas staff in the Maldives were also given essential training for their jobs such as x-ray operation, airline security, wildlife hazard management, fire-fighting training and more. In FY2024, we recoded 3,394 training hours; 8.2 hours of training per employee and 11.5 hours of training per worker were expended. Our Sustainability Report 2024 provides a more detailed narration of our training, staff benefits and welfare, workplace safety and health initiatives. SUSTAINABILITY EFFORTS AND CORPORATE RESPONSIBILITY Our corporate social responsibility efforts included support for educational programmes, donations to charitable organisations and scholarship awards for our staff and workers. In FY2024, our programmes aimed at helping our staff and workers attain their potential within the organisation included our assistant project manager, Ms Michelle Leu. She will complete her master’s degree in international construction management from Nanyang Technological University in 2025. We continued our Institute of Technical Education (“ITE”) sponsorship, supporting ITE’s Work-Learn Technical Diploma programme. Donations to various charitable organisations were also part of our corporate social responsibility programme. Among the beneficiaries in FY2024 were the Church of The Immaculate Heart of Mary, Singapore Children’s Society and the ITE Education Fund. Among our various sustainability programmes, energy use due to the nature of our industry remains one area of focus. The Group endeavours to utilise renewable energy sources instead of non-renewable sources so as to preserve the environment, reduce production and operating costs, and meet compliance standards. We incorporate, where possible, green-label appliances and energy-efficient light fittings to reduce energy consumption and emissions. In 2023, we completed the installation of solar panels on the rooftop of our Chin Bee Factory. These have begun to provide low-carbon energy to our operations in the factory and will potentially provide excess solar energy to the electrical grid. The Group also utilises solar energy to power noise meters and traffic warning signs. In order to preserve the pristine and natural beauty of the Maldives and to counter damage to corals due to tourist activities, the Group has imposed rules on boat operators on the island such as anchoring, boat operation, boat sewage, and garbage disposal. Strict rules have also been placed surrounding activities such as fishing, marine wildlife viewing, snorkelling, diving, and scuba. We continued to maintain the corals at our corals nursery and those transplanted to Ocean Villas and Underwater Villas. OUTLOOK FOR 2025 The Ministry of Trade and Industry has forecasted slower growth for Singapore in 2025. Challenges facing Singapore and the world include the United Staes (US) and China trade conflict which may intensify under a new US administration, continued tensions globally and market volatility with continued inflationary pressures exacerbated by potential increased tariffs and high interest rates. All these would translate into a difficult operating environment for the Group. Nevertheless, we have time and time again demonstrate resilience and fortitude. With a strong order book, financial prudence, sound management strategies and an innovative mindset, we are confident of overcoming whatever obstacles lie ahead. 15 ANNUAL REPORT 2024 FINANCIAL AND OPERATIONS REVIEW
SUSTAINABLE GROWTH Digital transformation, financial prudence, effective project management and an innovative mindset are essential to achieving long-term growth.
MR LEO TING PING RONALD Chairman and Chief Executive Officer MR LEO TING PING RONALD, 73, was appointed to our Board on 15 April 2008 and was re-elected on 30 January 2023. As Chairman and Chief Executive Officer, he oversees the day-to-day operations and the Group’s strategic direction and corporate business expansion. Mr Leo also holds directorships in the Group’s subsidiaries and associated companies. Mr Leo is a civil engineer with over 40 years of post-graduate experience in the industry. From 1974 to 1983, he was a senior structural engineer in the Structural Engineering Department at Housing and Development Board (“HDB”). In 1980, as head of the construction technology unit of HDB, he spearheaded the drive towards prefabrication and mechanisation of the local construction industry. He later joined Eng Hup Heng Construction Pte Ltd from 1983 to 1985 as its general manager and was responsible for construction and management of their projects, including Housing and Urban Development Corporation, HDB housing, factories and institutional buildings. Mr Leo joined Keong Hong Construction Pte. Ltd. (“KH Construction”) in 1985 as Managing Director, where he grew the business from a subcontractor to an established design and build main contractor of Building and Construction Authority A1 Grading. He led the Group to its initial public offering on the Catalist Board of the Singapore Exchange Securities Trading Limited on 16 December 2011. The Group was subsequently transferred to the Mainboard on 2 August 2016. Mr Leo graduated with a Bachelor of Engineering (Civil) with First Class Honours and a Master of Science (Construction Engineering) from the National University of Singapore (“NUS”), in 1974 and 1977 respectively. He became a member of The Institution of Engineers Singapore and an associate of The Institute of Structural Engineers, United Kingdom, in 1978 and 1992 respectively. He was also registered as a professional engineer with the Singapore Professional Engineers Board in 1979. Mr Leo is not related to any existing Director, executive officer or substantial shareholder of the Company or any of its principal subsidiaries. MR ER ANG HOOA, 72, joined our Group in 1996. He was appointed to our Board on 26 September 2011 and was re-elected on 30 January 2023. He has been the Project Director of our wholly owned subsidiary, KH Construction, since June 2010. He is responsible for all operational activities relating to construction projects undertaken by our Group. Mr Er also holds directorships in the Group’s subsidiaries and associated companies. Prior to being a Project Director, he was the General Manager from 2005 to 2010, Assistant General Manager from 2001 to 2004 and Senior Project Manager from 1996 to 2000 of KH Construction. He graduated from the University of Dundee, United Kingdom, with a Bachelor of Science in Civil Engineering in 1978. He also graduated from Imperial College London, United Kingdom, with a Master of Science in Structural Steel Design in 1985. He obtained a graduate diploma in management and administration from Bradford University, United Kingdom, in 1986. Mr Er is not related to any existing Director, executive officer or substantial shareholder of the Company or any of its principal subsidiaries. MR ER ANG HOOA Executive Director 18 KEONG HONG HOLDINGS LIMITED BOARD OF DIRECTORS
MR XU QUANQIANG Executive Director MR XU QUANQIANG, 46, was appointed to our Board on 29 March 2021 as Non-Executive Non-Independent Director. He was subsequently re-designated as Executive Director on 1 September 2022 to oversee the Group’s investments and was re-elected on 28 March 2024. Mr Xu also holds directorships in Kori Holdings Limited, FT Development Pte. Ltd., Forevertrust International (S) Pte. Ltd., LJHB Capital (S) Pte. Ltd., PT Forevertrust International Indonesia, Wisestone Pte. Ltd., Innotrust Pte. Ltd. and two subsidiaries of the Group. From 2013 to 2016, Mr Xu was a Director of BSI Group Singapore Pte Ltd. Besides overseeing the Group’s investments, Mr Xu is the Chief Executive Officer of LJHB Holdings (S) Pte Ltd (“LJHB”), responsible for LJHB’s strategic decisions and growth plans in the region. LJHB is the controlling shareholder of the Group and is primarily in the assets investment business in real estate, hospitality and tourism sectors. He also concurrently holds the appointment as Chief Executive Officer of related company of LJHB, namely Continental Hope Singapore Industrial Development Pte. Ltd. Prior to joining LJHB, Mr Xu held senior leadership positions including Chief Executive Officer of Ronghua Group Pte Ltd, Regional General Manager of GIC Group Pte Ltd, Country General Manager of BSI Group Singapore Pte Ltd, and Assistant Vice President (Sales) of TUV SUD PSB Pte Ltd. Mr Xu holds a Master of Business Administration degree from the University of South Australia. He is a Certified Property Manager awarded by the Institute of Real Estate Management (REM) USA and a Certified Commercial Investment Member of the CCIM Institute USA. Mr Xu is an associate of LJHB. Except as disclosed, he is not related to any existing Director, executive officer or substantial shareholder of the Company or any of its principal subsidiaries. MR FONG HENG BOO Lead Independent Director Chairman – Audit Committee Member – Nominating Committee, Remuneration Committee MR FONG HENG BOO, 75, was appointed to our Board on 1 January 2022 and was re-elected on 25 March 2022. He was appointed as Lead Independent Director on 29 February 2024. Mr Fong has over 46 years of experience in auditing, finance, business development and corporate governance. He was with the Auditor-General’s Office (“AGO”), Singapore and held the position of Assistant Auditor-General when he left AGO in 1993. Mr Fong was also the Director (Special Duties) at the Singapore Totalisator Board, where he led the finance and investment functions. He retired from the board of CapitaLand China Trust Management Limited in 2022, where he was a non-executive independent director since 2013. Mr Fong currently holds directorships in Surbana Jurong Private Limited, TA Corporation Ltd, Livingstone Health Holdings Limited, Agency for Integrated Care Pte Ltd and Bonvest Holdings Limited. Mr Fong graduated from the University of Singapore (now known as the NUS) with a Bachelor of Accountancy (Honours) in 1973. He was a Fellow Member of the Institute of Singapore Chartered Accountants. 19 ANNUAL REPORT 2024 BOARD OF DIRECTORS
MR CHONG WAI SIAK, 77, was appointed to our Board on 1 October 2019 and was re-elected on 28 March 2024. Mr Chong joined HDB in 1971 and rose to the position of Senior Principal Structure Engineer before he was appointed in 1980 to establish and head a government owned construction company, Construction Technology Pte Ltd to spearhead and introduce mechanisation and appropriate technology in the construction industry. In 1989, he joined NSL Ltd (formerly known as NatSteel Ltd) and held various senior positions there, as Deputy President of NSL and President/CEO of its major subsidiary, Eastern Industries/Eastern Pretech Group. He was responsible for the overall management of the operations and business activities of the Group and its many subsidiaries, involved mainly in construction products and services, property development and engineering design. His work involved establishing and managing business activities in Singapore, Malaysia, Indonesia, Hong Kong, China, the Philippines, Vietnam, United Arab Emirates and Finland. He retired from the NSL Group in 2014 with wide business experience in many aspects of the building and construction industry. Mr Chong was a Director of Changi Airport Planners & Engineers Pte Ltd from 2007 to 2014. He had previously served as Council Member in Singapore Contractors Association Ltd and Institution of Engineers, Singapore and as a member in various Advisory and Technical Committees of the former CIDB and SISIR. Mr Chong graduated with a Bachelor of Science (Honours) in Civil Engineering and a Master of Science in Structural Engineering from the University of Manchester, Institute of Science and Technology, United Kingdom, in 1970 and 1971 respectively. He was a Chartered Engineer (UK) and a registered Professional Engineer with both the Singapore and Malaysia Engineering Boards. He was a member of the Institution of Civil Engineers (UK) and a member of both the Institution of Engineers, Singapore and Malaysia. MR KOH TEE HUCK KENNETH, 66, was appointed to our Board on 30 September 2021 and was re-elected on 28 March 2024. He commenced his legal career in 1984 with Singapore’s then largest law practice. Whilst actively engaged in dispute resolution, his focus on infrastructure and construction work began when he joined a London-based international law firm. His practice ranges from representing clients in court, arbitration, adjudication and mediation to advisory work in engineering, procurement and construction contracts. After several years in a local partnership, he co-founded UniLegal LLC, and chaired its board of directors from 2002 to 2018. He currently serves as its consultant. Mr Koh graduated with a Bachelor of Laws in 1983 from the National University of Singapore and is an Advocate & Solicitor of the Supreme Court of Singapore. He holds memberships in the Singapore Academy of Law, the Law Society of Singapore, Society of Construction Law (Singapore) and the Singapore Institute of Directors (“SID”). He was recognised by the SID as a Senior Accredited Director on 16 January 2024. His previous appointments include being Honorary Legal Advisor to the Singapore Contractors Association Ltd. He also authored the Singapore chapters in two international publications. MR KOH TEE HUCK KENNETH Independent Director Chairman – Nominating Committee Member – Audit Committee, Remuneration Committee MR CHONG WAI SIAK Independent Director Chairman – Remuneration Committee Member – Audit Committee, Nominating Committee 20 KEONG HONG HOLDINGS LIMITED BOARD OF DIRECTORS
MS WONG EE KEAN Non-Executive Independent Director MS WONG EE KEAN, 40, was appointed to our Board on 31 January 2024 and was re-elected on 28 March 2024. Ms Wong is currently the CEO of Industrial Securities (Singapore) Corporate Advisory Pte Ltd. Prior to that, Ms Wong served as the CEO of a corporate finance advisory firm where she has over 15 years of experience in the investment and corporate financial industry in Asia Pacific with a focus on REITS, business trusts, real estate and capital markets. Ms Wong was previously a corporate lawyer and a partner with WongPartnership, a leading law firm in Singapore where she practiced law for over 10 years, representing listed companies and institutional clients on a broad range of corporate transactions including IPOs, follow-on offerings, block trades and private placements. Ms Wong graduated with a Bachelor of Laws (Honours) in 2007 and hold a Master of Science in Real Estate from the National University of Singapore. Currently, she serves on the board of the Children’s Charities Association of Singapore and as Vice President of the Deaf Education Committee for the Singapore Association for the Deaf. 21 ANNUAL REPORT 2024 BOARD OF DIRECTORS
MR HENG FOOK CHANG, 54, joined our Group in July 2024. As the Chief Financial Officer, his responsibilities include overseeing all financial, accounting and corporate secretarial matters. Prior to joining our Group, he was the Financial Controller at Singapore Exchange (SGX) Catalist-listed Boldtek Holdings Limited. Mr Heng has held executive positions in several SGX Mainboard-listed companies, where he was responsible for financial accounting and treasury functions, corporate secretarial and regulatory compliance matters. Mr Heng graduated with a Bachelor of Commerce (Accounting and Finance) degree from Curtin University of Technology, Western Australia, and obtained a Master of Commerce in Professional Accounting from Macquarie University, New South Wales. He is a member of the Institute of Singapore Chartered Accountants and holds a Certified Practising Accountant (Australia) qualification. MS NG SIEW KHIM, 52, joined our Group in 1993 and is currently the Head of Contracts of our Group. She is responsible for overseeing quantity surveying, tender process administration, technical correspondences preparation and other contractual documentation. Ms Ng graduated from South Bank University (London), United Kingdom, with a Bachelor of Science in Quantity Surveying in 1997. She also obtained a diploma in Building from the Singapore Polytechnic in 1993. MR HENG FOOK CHANG Chief Financial Officer MS NG SIEW KHIM CORINNE Head of Contracts 22 KEONG HONG HOLDINGS LIMITED KEY MANAGEMENT
BOARD OF DIRECTORS CHAIRMAN AND CHIEF EXECUTIVE OFFICER Leo Ting Ping Ronald EXECUTIVE DIRECTORS Er Ang Hooa Xu Quanqiang LEAD INDEPENDENT DIRECTOR Fong Heng Boo INDEPENDENT DIRECTORS Chong Wai Siak Fong Heng Boo Koh Tee Huck Kenneth Wong Ee Kean AUDIT COMMITTEE Fong Heng Boo (Chairman) Chong Wai Siak Koh Tee Huck Kenneth NOMINATING COMMITTEE Koh Tee Huck Kenneth (Chairman) Chong Wai Siak Fong Heng Boo REMUNERATION COMMITTEE Chong Wai Siak (Chairman) Fong Heng Boo Koh Tee Huck Kenneth COMPANY SECRETARIES Heng Michelle Fiona Lim Guek Hong REGISTERED OFFICE 9 Sungei Kadut Street 2 Singapore 729230 Tel: (65) 6564 1479 Fax: (65) 6566 2784 Website: www.keonghong.com Investor Relations: ir@keonghong.com SHARE REGISTRAR B.A.C.S Private Limited 77 Robinson Road #06-03 Robinson 77 Singapore 068896 AUDITORS FORVIS MAZARS LLP 135 Cecil Street #10-01 Singapore 069536 PARTNER-IN-CHARGE Zhang Liang Appointed on 22 August 2022 PRINCIPAL BANKERS Malayan Banking Berhad Overseas-Chinese Banking Corporation The Hongkong and Shanghai Banking Corporation Limited United Overseas Bank Limited 23 ANNUAL REPORT 2024 CORPORATE INFORMATION
The Company is committed to a high standard of corporate governance to ensure effective self-regulation practices are in place to enhance corporate performance and accountability. This report outlines the Company’s corporate governance practices throughout the financial year ended 30 September 2024 (“FY2024”), with specific references made to the principles of the Code of Corporate Governance 2018 (the “Code”). Pursuant to Rule 710 of the Listing Manual of the Singapore Exchange Securities Trading Limited (the “SGX-ST”) (“SGX-ST Listing Manual”), the Board of Directors (the “Board”) confirms that the Company has for FY2024 complied with the Principles as set out in the Code. The Board also confirms that where there are deviations from the provisions of the Code, explanations for the deviation and how the Group’s practices are consistent with the intent of the relevant principle, are provided in the sections below: BOARD MATTERS The Board’s Conduct of its Affairs Principle 1: The company is headed by an effective Board which is collectively responsible and works with Management for the long-term success of the company. Principal Duties of the Board All Directors objectively discharge their duties and responsibilities at all times as fiduciaries in the best interests of the Company, and hold management accountable for performance. The Board oversees the business affairs of the Group, approves the financial objectives and the strategies to be implemented by the management of the Company (the “Management”) and monitors standards of performance and issues of policy. In addition to its statutory duties, the Board’s principal functions are: Provision 1.1 (i) supervising the overall management of the business and affairs of the Group and approving the Group’s corporate and strategic policies and direction; (ii) formulating and approving financial objectives of the Group and monitoring its performance such as reviewing and approving of financial results announcement and financial statements; (iii) overseeing the processes for evaluating the adequacy of internal controls and risk management including the review and approval of interested person transactions; (iv) assuming responsibility for corporate governance and compliance with the Companies Act 1967 and the rules and regulations of the relevant regulatory bodies; (v) evaluating performance of Management; (vi) reviewing and approving the remuneration framework for the Board and key executives; and (vii) considering sustainability issues e.g. environmental and social factors, as part of its strategic formulation. The Company’s Constitution requires a Director and, the Chief Executive Officer (or person(s) holding an equivalent position), who is in any way whether directly or indirectly interested in a contract or proposed contract with the Company, to declare the nature of his interest at a meeting of the Directors in accordance with Section 156 of the Companies Act 1967 (the “Act). A Director and, Chief Executive Officer (or person(s) holding an equivalent position), shall not vote in respect of any contract or proposed contract or arrangement with the Company in which he has a personal material interest, directly or indirectly, and shall not be counted in the quorum present at the meeting. Accordingly, the Board is obliged to exercise reasonable due diligence and independent judgement when making decisions. It sets appropriate tone-from-the-top and desired organizational culture and ensures proper accountability within the Group. When there is any conflict of interest, Directors will voluntarily recuse themselves from the discussions and decisions involving the issues of conflict. 24 KEONG HONG HOLDINGS LIMITED CORPORATE GOVERNANCE REPORT
Board Orientation, Training and Updates Upon the appointment of a new Director, the Company will provide him/her with a formal letter, setting out his/her duties and obligations. The Company has put in place an orientation program for all newly appointed Director(s) to assimilate him/her into his/her new role and will provide him/her with a set of the Company’s policies, terms of reference of various board committees (where applicable) and corporate meeting calendar for the year. He/She will be briefed by Management on the business activities of the Group and its strategic directions as well as the duties and responsibilities as a Director. Provision 1.2 Changes to regulations and accounting standards are monitored closely by Management. To keep pace with the regulatory changes, where these changes have an important bearing on the Company’s or Director’s disclosure obligations, Directors are briefed by the Company Secretary on the continuing obligations under the SGX-ST Listing Manual and are regularly provided with news releases, articles and updates on changes to the Listing Manual from time to time. The Directors have also been kept abreast of the principles and provisions of the Code. During the financial year, a number of Directors attended the Listed Company Directors courses conducted by the Singapore Institute of Directors (“SID”) and other professional organisations including but not limited to “Director’s Conference”, “Sustainability as Corporate Strategy: Risks and Opportunities Beyond Reporting”, “ISCA Annual Conference”, “Annual Construction Law Update 2024”, “Sustainability as Corporate Strategy: Risks and opportunities beyond Reporting”, “Top Executive WSH Programme”, “Understanding and Applying the Public Sector Standard Conditions of Contract”, “Sustainability Reporting: Board & Director Responsibilities”, Sustainable Digital Transformation & Smart Everything”, “Green Infrastructure”, “Beyond the 9-Year Rule”, Nominating Committee Essentials”, Non-Executive Directors Arrested” What can go wrong?”, SGTI Forum – Navigating Sustainable Governance”, and “Legal Liabilities of Board Members (Commissioner of Charities and Charity Council)”. Appropriate external training for Directors conducted by the SID and other organisations will be arranged by the Company when necessary. Pursuant to Rule 720(7) of the Listing Manual, all directors have to undergo training on sustainability matters as prescribed by the SGX-ST. All the Directors have attended the LED-Environmental, Social and Governance Essentials (Core) conducted by the SID. Rule 720(7) During FY2024, Ms Wong Ee Kean, a newly appointed Director, completed her mandatory training courses (LED 1, 2, 3, 4 and 9) conducted by SID as well as elective modules, Audit Committee Essentials (LED 5) and Board Risk Committee Essentials (LED 6). Practice Note 2.3 Matters Requiring Board Approval The Board has adopted a set of internal guidelines on the matters requiring Board’s approval. Matters that are specifically reserved for the approval of the Board include, among others, any material acquisitions and disposals of assets, corporate or financial restructuring, share issuance, proposal of dividends, announceable matters, legal claims and litigation, and other matters as may be considered by the Board from time to time. Provision 1.3 Delegation to Board Committees The Board has delegated certain functions to various Board Committees, namely the Audit Committee (“AC”), the Remuneration Committee (“RC”), and the Nominating Committee (“NC”). Each Committee operates within clearly defined terms of reference and operating procedures, which are reviewed periodically. All Board Committees are chaired by an independent director. While these Board Committees are delegated with certain responsibilities, the responsibility for decisions relating to matters under the purview of the Board Committees ultimately lies with the Board. Provision 1.4 Attendance at Board and Board Committees Meetings The Company’s Constitution permits directors of the Company (the “Directors”) to attend meetings through the use of audio-visual communication equipment. Provision 1.5 The Board and Board Committees conduct meetings on a regularly basis which are planned in advance. Ad-hoc meetings are conducted as and when circumstances require. In between Board meetings, important matters concerning the Company are also put to the Board for its decision by way of circulating resolutions in writing for the Directors’ approval together with supporting memorandum, enabling the Directors to make informed decisions. Provisions 1.5 & 1.6 25 ANNUAL REPORT 2024 CORPORATE GOVERNANCE REPORT
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