INDEX TO CORPORATE GORVERNANCE

AND FINANCIAL REPORT

Report on Corporate Governance 58

Directors’ Report 72
Statement by Directors 82
Auditors’ Report 83
Profit Statement 84
Balance Sheet 85
Statement of Changes in Equity 86
Cash Flow Statement 89
Notes to the Financial Statements 91
Particulars of Group Properties 183
Shareholding Statistics 192
Notice of Annual General Meeting 193
Proxy Form – Annual General Meeting

Fraser and Neave, Limited & Subsidiary Companies Annual Report 2006 57
REPORT ON CORPORATE GOVERNANCE
for the year ended 30 September 2006

Driving value, with its rich heritage, vision, and entrepreneurial spirit, Fraser and Neave, Limited (“F&N” or the “Company”)
is firmly committed to good corporate governance, and adherence to the principles and guidelines set out in the Code of
Corporate Governance 2005 (“Code 2005”). In areas where F&N deviates from Code 2005, the rationale is provided.

Code 2005 The Board of Directors comprises:

Principle 1:
The Board’s Conduct
of Affairs Dr Michael Fam (Chairman – Non-executive)
Dr Han Cheng Fong (Group Chief Executive Officer)
Mr Timothy Chia (Non-executive)
Mr Ho Tian Yee (Non-executive)
Mr Koh Beng Seng (Non-executive)
Mr Stephen Lee (Non-executive)
Mr Lee Ek Tieng (Non-executive)
Dr Lee Tih Shih (Non-executive)
Mr Nicky Tan Ng Kuang (Non-executive)
Mr Anthony Cheong Fook Seng (Executive)
Mr Patrick Goh*
(alternate to Dr Han Cheng Fong)

* Mr Patrick Goh retired on 28 July 2006 and is a consultant with the Company on a 3-year contract.

At the Company’s 107th Annual General Meeting on 26 January 2006:

• Dr Fam retired as Chief Executive Officer, after 27 years of sterling service with the F&N Group,
out of which 23 years were as Executive Chairman. Dr Fam has accepted the Board’s invitation
to continue as non-executive Chairman until a new Group Chairman is appointed, and to serve
as consultant for a period of 2 years. This will ensure an orderly “changing of the guard” at
Board and Management levels, and assist in succession planning;

• Dr Han was appointed Group Chief Executive Officer on 1 February 2006; and

• Mr Timothy Chia and Mr Koh Beng Seng were appointed to the Board as independent non-
executive directors, increasing the Board strength from 8 to 10 members.

As the F&N Group enters a new phase with its expanded Board, and under the continued guidance of
the Chairman, and the able leadership of Dr Han as the Group Chief Executive Officer, it is well poised
to build on the solid foundations laid. The Board works hand-in-hand with Management to ensure the
success of the Company.

58 Fraser and Neave, Limited & Subsidiary Companies Annual Report 2006
REPORT ON CORPORATE GOVERNANCE
for the year ended 30 September 2006

Code 2005 The Board Executive Committee (“Board EXCO”), as a specialised Committee of the Board, is
Guideline 1.3: empowered, except for certain reserved matters, to exercise the full powers and authority of the
Delegation of
authority on certain Board, when the Board does not meet. Board EXCO, with the Board’s endorsement, formulates for
Board matters the F&N Group, strategic development initiatives, provides direction for new investments and material
financial and non-financial matters to secure the achievement of its desired performance objectives and
enhancement of long-term shareholder value. It also oversees the F&N Group’s conduct and corporate
governance structure. Board EXCO comprises the following members:

Dr Michael Fam (Chairman)

Mr Ho Tian Yee (Member)
Mr Stephen Lee (Member)
Mr Lee Ek Tieng* (Member)

* Mr Lee Ek Tieng was appointed a Board EXCO Member on 26 January 2006.

Code 2005 Regular meetings of the Board and of specialised committees established by the Board, are convened,
Guideline 1.4: and the number of meetings and attendance by Board members are set out in the table on page 67.
Meetings of the
Board and of F&N’s Articles of Association provide for telephone, video conference or any other form of electronic or
Specialised instantaneous communication meetings.
Committees

Code 2005 The levels of authorisation required for specified transactions, including those that require Board
Guideline 1.5: approval, are contained in a Chart of Authority.
Chart of Authority

The F&N Group has in place a programme for orientation of new Directors, and to update all Directors
on the F&N Group’s facilities and operations, and major new projects. Occasional visits are arranged for
non-executive Directors to acquaint them with important operations overseas.

Courses have been tailored for senior management and newly appointed Directors on directors’
duties and compliance with the relevant bodies of law in the performance of their duties. Sessions for
Directors and senior management, on new statutory developments, including the Competition Act,
and the Workplace Safety & Health Act, were conducted as part of the compliance programme for the
F&N Group. With a few exceptions, all Directors are members of the Singapore Institute of Directors
(“SID”), and eligible to receive updates and training from SID. The Company has amended its Articles
of Association in line with the amendments made to the Companies (Amendment) Act 2005.

A formal letter is provided to each Director, upon his appointment, setting out the Director’s duties
and obligations. Directors and senior management are encouraged to attend SID courses and receive
journal updates to keep abreast and updated of changes to the financial, legal, management and
industry landscape.

Code 2005 With more than one-third, indeed, a majority, of the Board comprising independent non-executive
Principle 2:
Board Composition Directors, the Board is able to exercise objective judgment on corporate affairs independently, and no
and Guidance individual or small group of individuals dominate the Board’s decision making.

Fraser and Neave, Limited & Subsidiary Companies Annual Report 2006 59
REPORT ON CORPORATE GOVERNANCE
for the year ended 30 September 2006

Code 2005 The Board, on the recommendation of the Nominating Committee, has confirmed the non-
Guideline 2.2: independent status of Dr Lee Tih Shih in view of his position as a non-executive director on the Board of
Nature of a Director’s
Relationship Oversea-Chinese Banking Corporation Limited (“OCBC”), and his relationship with one non-executive
director on the Board of OCBC who is also a member of the OCBC Executive Committee. OCBC is a
substantial shareholder of F&N, with which the F&N Group has a business relationship, under normal
commercial terms.

The Board, with its expanded size, and the stature, core competencies and experience of its Directors
in various fields, is well positioned, effective and equipped to continue to chart the direction forward
for the F&N Group, expanding its core businesses into new markets and boundaries. Non-executive
Directors actively participate in setting the strategy and goals for the Company and the F&N Group. The
Board meets regularly with Management, and reviews and monitors the performance of Management
in meeting agreed goals and objectives set.

Code 2005 There is clear division of responsibilities between the Chairman and the Group Chief Executive Officer,
Principle 3:
Chairman and Chief
which ensures an appropriate balance of power, increased accountability and greater capacity of the
Executive Officer Board for independent decision making.

The division of responsibilities between the Chairman and the Group Chief Executive Officer has been
clearly established, and agreed by the Board. The Chairman continues to lead the Board to ensure
its effectiveness on all aspects of its role, ensures that Directors receive accurate, timely and clear
information, ensures effective communication with shareholders, encourages constructive relations
between the Board and Management, as well as among Board members, and promotes high standards
of corporate governance.

Code 2005 The Chairman and the Group Chief Executive Officer are not related to each other.
Guideline 3.1:
Relationship between
the Chairman and
Group Chief
Executive Officer

60 Fraser and Neave, Limited & Subsidiary Companies Annual Report 2006
REPORT ON CORPORATE GOVERNANCE
for the year ended 30 September 2006

Code 2005 The Nominating Committee makes recommendations to the Board on all board appointments. Two out
Principle 4:
Board Membership of the four members of the Nominating Committee, including the Chairman, are independent:

Mr Ho Tian Yee (Chairman)

Dr Michael Fam (Member)
Mr Stephen Lee (Member)
Dr Lee Tih Shih (Member)

Although not in strict compliance with Guideline 4.1 of the Code 2005 which provides that the
majority of the members should be independent, members of the Committee comprise persons of
stature, integrity and accountability, who would be able to exercise independent judgement in the
performance of their duties.

Code 2005 The Nominating Committee Chairman, Mr Ho Tian Yee, is an independent non-executive director
Guideline 4.1: of both Oversea Assurance Company Ltd, as well as the holding company, Great Eastern Holdings
Nominating
Committee Limited, which in turn is a subsidiary of OCBC. OCBC is a substantial shareholder of F&N, with which
Member’s association the F&N Group has a business relationship, under normal commercial terms. Mr Ho is not *directly
with Substantial
Shareholder (with associated with OCBC.
interest of 5% or
more in the voting Note: * A director will be considered “directly associated” to a substantial shareholder when the director is accustomed or
shares of F&N) under an obligation, whether formal or informal, to act in accordance with the directions, instructions or wishes of
the substantial shareholder.

The Nominating Committee is also responsible for re-nomination and re-election of directors who
retire at least once every three years. In recommending to the Board any re-nomination and re-election
of existing Directors, the Nominating Committee takes into account the Directors’ contribution and
performance at Board meetings. All Directors submit themselves for re-nomination and re-election
every three years.

Fraser and Neave, Limited & Subsidiary Companies Annual Report 2006 61
REPORT ON CORPORATE GOVERNANCE
for the year ended 30 September 2006

The Nominating Committee, having considered the guidelines set out in the Code, has confirmed the
status of the following non-executive Directors:

Mr Timothy Chia Independent

Mr Ho Tian Yee Independent
Mr Koh Beng Seng Independent
Mr Stephen Lee Independent
Mr Lee Ek Tieng Independent
Dr Lee Tih Shih Non-independent
Mr Nicky Tan Ng Kuang Independent

Notwithstanding that some of the Directors have multiple board representations, the Nominating
Committee is satisfied that each Director is able to and has been adequately carrying out his duties as
a director of the Company.

Code 2005 The search and nomination process for new directors, if any, will be through search companies, contacts
Guideline 4.5: and recommendations that go through the normal selection process, to cast its net as wide as possible
Description of Search
& Nomination Process for the right candidates.
for New Directors

Code 2005 Key information regarding Directors is set out on pages 68 and 69.
Guideline 4.6:
Key Information
regarding Directors

Code 2005 The Nominating Committee uses objective performance criteria to assess the effectiveness of the Board
Principle 5:
Board Performance as a whole and the contribution of each Director. Such criteria includes Directors’ attendance and
Code 2005 contributions during Board meetings, as well as consideration of the factors set out in the Guidelines
Guideline 5.1: to Principle 5 of the Code 2005.
Process for Assessing
Effectiveness of
the Board & each
Director

Code 2005 Adequate and timely information prior to Board meetings, and on an on-going basis, are provided
Principle 6:
Access to Information to Board members, who have access to the Company’s senior management, including the Group
Company Secretary. Under the direction of the Chairman, the Group Company Secretary, who attends
all Board meetings, ensures good information flows within the Board and its committees, and between
senior management and non-executive Directors, as well as facilitating orientation, and assisting with
professional development as required.

Directors may, in the furtherance of their duties, take independent professional advice at the Company’s
expense.

62 Fraser and Neave, Limited & Subsidiary Companies Annual Report 2006
REPORT ON CORPORATE GOVERNANCE
for the year ended 30 September 2006

Code 2005 The Remuneration Committee was renamed The Remuneration & Staff Establishment Committee on
Principle 7:
Remuneration 7 April 2006 and its terms of reference expanded to include succession planning. The composition of
Matters the Committee comprises entirely non-executive Directors, all of whom, including the Chairman, are
independent:

Mr Stephen Lee (Chairman)

Mr Ho Tian Yee (Member)
Mr Lee Ek Tieng (Member)

The Remuneration & Staff Establishment Committee recommends for the endorsement of the Board,
a framework of remuneration and the specific remuneration packages for each Executive Director, and
reviews the remuneration of, and succession planning for, senior management. It also administers the
F&N Executives Share Option Scheme (the “F&N ESOS”).

Code 2005 In setting remuneration packages, the Remuneration & Staff Establishment Committee considers the
Principle 8:
Level and Mix of level of remuneration to attract, retain and motivate Executive Directors, and to align their interests
Remuneration with those of shareholders, linking rewards to corporate and individual performance.

The remuneration of non-executive Directors is set at a competitive level, appropriate to their level of
contribution, taking into account attendance and time spent, and their respective responsibilities.

Service contracts, if any, for Executive Directors, is for a fixed appointment period, is not excessively
long, and all contracts do not contain onerous removal clauses. The Remuneration & Staff Establishment
Committee aims to be fair, linking rewards with performance.

Long term incentive schemes are encouraged. Executive Directors are eligible for the grant of options
under the F&N ESOS and are encouraged to hold their shares beyond the vesting period, subject to the
need to finance any costs of acquisition and associated tax liability.

F&N’s remuneration policy is based on an annual appraisal system using the criteria of core values,
competencies, key result areas, performance rating, potential, and training needs.

Fraser and Neave, Limited & Subsidiary Companies Annual Report 2006 63
REPORT ON CORPORATE GOVERNANCE
for the year ended 30 September 2006

Code 2005 The remuneration of Directors and the top 5 key executives (who are not also Directors), is set out
Principle 9:
Disclosure on below. Disclosure is provided to enable investors to understand the link between remuneration paid to
Remuneration Directors, and key executives, and performance.

Code 2005 Allowances

Guidelines 9.1 & 9.2: Fee Salary (4) Bonus & Benefits Total
Remuneration of % % % % %
Directors and Top 5
Key Executives
a) Directors of the Company
i) Between $2,750,001 to $3,000,000
Dr Michael Fam (1) 19 62 5 14 100
ii) Between $2,000,001 to $2,250,000
Dr Han Cheng Fong (2) – 59 33 8 100
iii) Between $750,001 to $1,000,000
Mr Patrick Goh (5) – 46 21 33 100
Mr Anthony Cheong Fook Seng – 55 37 8 100
iv) Below $250,000
Mr Stephen Lee 100 – – – 100
Mr Ho Tian Yee 100 – – – 100
Mr Lee Ek Tieng 100 – – – 100
Dr Lee Tih Shih 100 – – – 100
Mr Nicky Tan Ng Kuang 100 – – – 100
Mr Koh Beng Seng 100 – – – 100
Mr Timothy Chia 100 – – – 100
b) Key Executives of the Group
i) Between $1,750,001 to $2,000,000
Mr Koh Poh Tiong – 62 37 1 100
ii) Between $1,000,001 to $1,250,000
Mr Lim Ee Seng – 52 47 1 100
iii) Between $500,001 to $750,000
Dato’ Ng Jui Sia (3) – 67 24 9 100
Mr Huang Hong Peng (6) – 58 29 13 100
Mr Tan Ang Meng – 66 31 3 100

(1) In addition, Dr Michael Fam received an ex-gratia payment of $1,000,000 when he retired as the Executive Chairman
of the Group at the close of the Annual General Meeting of the Company held on 26 January 2006.
(2) Dr Han Cheng Fong was appointed Group Deputy Chief Executive Officer and Managing Director up to 31 January 2006
and Group Chief Executive Officer from 1 February 2006.
(3) The remuneration paid to Dato’ Ng Jui Sia, who was appointed Chief Executive Officer of Times Publishing Limited from
15 July 2006, includes his remuneration during the year as Managing Director, F&N Coca-Cola (Malaysia) Sdn Bhd.
(4) Includes fees paid to Dr Michael Fam and Mr Patrick Goh as consultants after their retirement.
(5) Mr Patrick Goh retired on 28 July 2006 and is a consultant with the Company on a 3-year contract.
(6) Mr Huang Hong Peng resigned from the Company on 30 September 2006, to take up a position with Asia Pacific
Breweries Limited.

Code 2005 Information on the F&N ESOS is set out in the Directors’ Report on page 75. Information on key
Guideline 9.4:
Details of Employee
executives is set out on pages 70 and 71.
Share Option Scheme

64 Fraser and Neave, Limited & Subsidiary Companies Annual Report 2006
REPORT ON CORPORATE GOVERNANCE
for the year ended 30 September 2006

Code 2005 The Board is responsible for providing a balanced and understandable assessment of F&N’s
Principle 10:
Accountability performance, position and prospects. Management provides to members of the Board monthly
and Audit management accounts which present a balanced and understandable assessment of F&N’s
performance, position and prospects.

Code 2005 The Audit Committee comprises the following non-executive Directors, all of whom including the
Principle 11:
Audit Committee Chairman, are independent:

Code 2005 Mr Lee Ek Tieng (Chairman)

Guideline 11.8: Mr Stephen Lee (Member)
Disclosure of Names
of Members of Audit Mr Nicky Tan Ng Kuang (Member)
Committee & their
Activities
The Board ensures that members of the Audit Committee are appropriately qualified to discharge their
responsibilities, possessing the requisite accounting and related financial management expertise and
experience.

The Audit Committee is empowered to investigate any matter within its terms of reference, and has full
access to, and the co-operation of Management. It has reasonable resources to enable it to discharge
its functions properly.

The authority and duties of the Audit Committee are set out in its terms of reference.

In performing its functions, the Audit Committee met with the internal and external auditors who
have unrestricted access to the Audit Committee, and reviewed the overall scope of both internal and
external audits, and the assistance given by Management to the auditors.

The Audit Committee is satisfied with the independence and objectivity of the external auditors and
recommends to the Board of Directors, the nomination of the external auditors for re-appointment.

The Audit Committee has recommended for endorsement by the Company, a Whistle-Blowing Policy,
for the F&N Group. The Policy serves to encourage and provide a channel to employees to report
in good faith and in confidence, without fear of reprisals, concerns about possible improprieties in
financial reporting or other matters. The objective for such arrangement is to ensure independent
investigation of such matters and for appropriate follow-up action.

Code 2005 The Board is responsible for ensuring that Management maintains a sound system of internal controls
Principle 12:
to safeguard shareholders’ investments and the assets of the Company. The Audit Committee reviews
Internal Controls
the adequacy of such controls, including financial, operational and compliance controls, and risk
management policies and systems established by Management.

Code 2005 Enterprise-wide risk management (“ERM”) continues to cascade to all levels of the F&N Group, in
Guideline 12.2: Singapore and overseas. Key risks, control measures and management actions are continually identified,
Internal Controls,
including financial updated and monitored by Management. An annual validation session is conducted, attended by the
operational and reporting risk units within the F&N Group, with oversight from the Group Chief Executive Officer. The
compliance
controls, and risk internal auditors review the adequacy of ERM, as part of their routine audit.
management

Fraser and Neave, Limited & Subsidiary Companies Annual Report 2006 65
REPORT ON CORPORATE GOVERNANCE
for the year ended 30 September 2006

The Risk Management Committee was constituted on 7 April 2006 comprising the following Board
members:

Mr Koh Beng Seng (Chairman)

Mr Timothy Chia (Member)
Mr Nicky Tan Ng Kuang (Member)

Focus is being given by the Risk Management Committee to key strategic risks, and to the management
of such risks including business continuity plans and use of insurance as a tool for the transfer of a
certain portion of the risks.

The Audit Committee, with the assistance of the internal and external auditors, have reviewed, and
the Board is satisfied with, the adequacy of F&N’s internal controls, including financial, operational and
compliance controls, and risk management systems.

Code 2005 The Internal Audit Department of the F&N Group is independent of the activities it audits. The Head
Principle 13:
Internal Audit of Internal Audit’s primary line of reporting is to the Chairman of the Audit Committee, with an
administrative line of reporting to the Director & Group Company Secretary.

The Internal Audit function is adequately resourced, and has appropriate standing within the F&N
Group. The Head of Internal Audit is a certified public accountant.

The Audit Committee has reviewed and is satisfied with the adequacy of the Internal Audit function.

Code 2005 F&N engages in regular, effective and fair communication with its shareholders. Regular dialogues
Principle 14:
Communication are held with investors, analysts, fund managers and the press. Material information is
with Shareholders simultaneously disseminated to SGX, the press and posted on the Company’s website at
www.fraserandneave.com.

Code 2005 At the annual general meeting of the Company, shareholders are given opportunity to communicate
Principle 15:
Communication their views on matters relating to F&N. The Chairpersons of the Audit, Nominating and Remuneration
with Shareholders & Staff Establishment Committees are present and available to address questions at general meetings.
The external auditors are also present to address shareholders’ queries, if any, on the conduct of audit
and the preparation and content of the auditors’ report.

66 Fraser and Neave, Limited & Subsidiary Companies Annual Report 2006
REPORT ON CORPORATE GOVERNANCE
for the year ended 30 September 2006

Code of Business F&N’s Code of Business Conduct also sets the standards and ethical conduct expected of employees of
Conduct
the F&N Group. Directors, officers and employees are required to observe and maintain high standards
of integrity, as are in compliance with the law and the regulations, and company policies.

Listing Rule 1207 In line with Listing Rule 1207 (18) on Dealings in Securities, the F&N Group issues a quarterly circular to
sub-Rule (18) on
Dealings in Securities
its Directors, officers and employees prohibiting dealings in listed securities of the F&N Group from one
month or two weeks, as the case may be, before the announcement of F&N’s quarterly, half-year and
full-year financial results, and at any time they are in possession of unpublished material price sensitive
information.

ATTENDANCE AT BOARD & SPECIALISED BOARD MEETINGS

REMUNERATION & RISK

BOARD EXCO AUDIT STAFF ESTABLISHMENT NOMINATING MANAGEMENT
No. of No. of No. of No. of No. of No. of
DIRECTORS Meetings Attendance Meetings Attendance Meetings Attendance Meetings Attendance Meetings Attendance Meetings Attendance

Michael Fam 7 7 12 12 NA NA NA NA 1 1 NA NA
Timothy Chia # 6 6 NA NA NA NA NA NA NA NA 1 1
Han Cheng Fong 7 7 NA NA NA NA NA NA NA NA NA NA
Ho Tian Yee 7 6 12 11 NA NA 1 1 1 1 NA NA
Koh Beng Seng # 6 6 NA NA NA NA NA NA NA NA 1 1
Stephen Lee 7 7 12 12 5 4 1 1 1 1 NA NA
Lee Ek Tieng ** 7 7 9 9 5 5 1 1 NA NA NA NA
Lee Tih Shih 7 5 NA NA NA NA NA NA 1 1 NA NA
Nicky Tan Ng Kuang 7 7 NA NA 5 5 NA NA NA NA 1 1
Anthony Cheong Fook Seng 7 7 NA NA NA NA NA NA NA NA NA NA
Patrick Goh * – – NA NA NA NA NA NA NA NA NA NA

Note: The Risk Management Committee was constituted on 7 April 2006.

# Mr Timothy Chia and Mr Koh Beng Seng were appointed to the Board on 26 January 2006.
* Mr Patrick Goh is an alternate director to Dr Han Cheng Fong.
** Mr Lee Ek Tieng was appointed an EXCO Member on 26 January 2006.

NA Not applicable

Fraser and Neave, Limited & Subsidiary Companies Annual Report 2006 67
REPORT ON CORPORATE GOVERNANCE
Particulars of Directors as at 30 September 2006

Directorship: Board
Board Date first appointment
Committees appointed whether Due for
Academic & Professional as Chairman Date last Executive or re-election
Name of Director Age Qualifications or Member re-elected Non-Executive at next AGM

Dr Michael Fam 79 BBM, PJG, DUBC, DUNU (1st Class), Chairman: 16.08.1978 Non-Executive Retirement
Hon LLD, Hon D Eng, Hon D Litt, Board Executive 26.01.2006 pursuant
Bachelor of Engineering with Committee to S153(6)
1st Class Honours in Civil Engineering, Member:
Hon Fellow of The Institution of Nominating Committee
Engineers, Australia

Mr Timothy Chia 55 cum laude in Management, Fairleigh Member: 26.01.2006 Independent

Dickinson University, USA Risk Management Non-Executive
Committee

Dr Han Cheng Fong 64 Bachelor of Science (Hons)(1st Class) NIL 01.04.2002 Executive
in Physics, University of Singapore 26.01.2006 – Group Chief
Master of Science, Doctor of Executive Officer
Philosophy, University of Birmingham,
UK

Mr Ho Tian Yee 54 Bachelor of Arts (Hons) Chairman: 01.12.1997 Independent Retirement

Economics (CNAA), Portsmouth Nominating Committee 29.01.2004 Non-Executive by rotation
University, UK Member:
Executive Program, Carnegie-Mellon Board Executive
University, USA Committee
Member:
Remuneration & Staff
Establishment Committee

Mr Koh Beng Seng 54 Bachelor of Commerce (1st Class Hons), Chairman: 26.01.2006 Independent
Nanyang University, Singapore Risk Management Non-Executive
MBA, Columbia University, New York Committee

Mr Stephen Lee 59 DSO, MBA, Northwestern University, Chairman: 01.07.1997 Independent Retirement
Evanston, USA Remuneration & Staff 27.01.2005 Non-Executive by rotation
Establishment Committee
Member:
Board Executive Committee
Member:
Audit Committee
Member:
Nominating Committee

68 Fraser and Neave, Limited & Subsidiary Companies Annual Report 2006
REPORT ON CORPORATE GOVERNANCE
Particulars of Directors as at 30 September 2006

Directorship: Board
Board Date first appointment
Committees appointed whether Due for
Academic & Professional as Chairman Date last Executive or re-election
Name of Director Age Qualifications or Member re-elected Non-Executive at next AGM

Mr Lee Ek Tieng 73 DSO, PJG, Bachelor of Engineering Chairman: 08.01.2001 Independent Retirement
Diploma in Public Health Engineering Audit Committee 26.01.2006 Non-Executive pursuant
Fellow, Institution of Civil Engineers, Member: to S153(6)
UK Remuneration & Staff
Fellow, Chartered Institution Establishment Committee
of Water & Environmental Member:
Management, UK Board Executive Committee
Hon Fellow, Institution
of Engineers, Singapore
Member, Institution of Engineers,
Malaysia

Dr Lee Tih Shih 43 Doctor of Medicine,Yale University Member: 01.12.1997 Non-Independent

Master of Business Administration Nominating Committee 26.01.2006 Non-Executive
with Distinction (London)

Mr Nicky Tan 48 Member, The Institute of Chartered Member: 21.10.2003 Independent Retirement
Ng Kuang Accountants in England and Wales Audit Committee 29.01.2004 Non-Executive by rotation
Certified Public Accountant, Institute Member:
of Certified Public Accountants in Risk Management
Singapore Committee

Mr Anthony Cheong 52 Member of the Institute of Chartered NIL 01.02.2005 Executive

Fook Seng Accountants in England & Wales and 26.01.2006 – Group Company
the Institute of Certified Public Secretary
Accountants in Singapore

Mr Patrick Goh 62 Fellow of The Association of NIL 15.11.2002 Alternate Director to

Chartered Certified Accountants of UK, Dr Han Cheng Fong
Associate of The Chartered Institute
of Management Accountants of UK,
and Member of the Institute of Certified
Public Accountants in Singapore

Note: (1) Directors’ shareholdings in the Company and its related Companies: please refer to pages 73 and 74.
(2) Directorships or Chairmanships in other listed companies and other major appointments, both present and over the preceding 3 years: please
refer to pages 14 and 15.

Fraser and Neave, Limited & Subsidiary Companies Annual Report 2006 69
REPORT ON CORPORATE GOVERNANCE
Particulars of Key Management Staff

Academic & Professional

Name Age Qualifications Working Experience Area of Responsibility

Koh Poh Tiong 60 Bachelor of Science, 1985 – 1991 Director and

University of Singapore General Manager Chief Executive Officer
Asia Pacific Breweries Limited Asia Pacific Breweries Limited
1991 – 1993 (Date appointed:
Deputy Group General Manager 01.10.1993)
Asia Pacific Breweries Limited

Lim Ee Seng 55 Bachelor of Engineering (Civil), 1982 – 1989 Director and

University of Singapore Project Manager Chief Executive Officer
Master of Science (Project Management), Singapore Land Ltd Frasers Centrepoint Limited
University of Singapore 1989 – 1996 (Date appointed:
General Manager (Property Divison) 15.10.2004)
First Capital Corporation Ltd
1996 – 2004
Managing Director
MCL Land Ltd

Dato’ Ng Jui Sia 54 Bachelor of Business Administration, 1978 Director

University of Singapore Investment Officer Times Publishing Limited
Associate, Institute of Chartered Board of Commissioner of Currency (Date appointed:
Accountants in England and Wales of Singapore 31.08.2006)
1978 – 1980
Audit Assistant Chief Executive Officer
Michael Fenton and Co. Times Publishing Limited
1982 – 1985 (Date appointed:
Audit Senior 15.07.2006)
Price Waterhouse Singapore
1985 – 1989
Regional Financial Controller
MK Electric SEA Pte Ltd
1989 – 1995
Regional Finance Manager
Carnaud Metalbox Asia Pacific
Sep 1995 – June 1999
General Manager
Fraser and Neave, Limited/
F&N Coca-Cola (Singapore) Pte Ltd
June 1999 – July 2006
Managing Director
F&N Coca-Cola (Malaysia) Sdn Bhd

70 Fraser and Neave, Limited & Subsidiary Companies Annual Report 2006
REPORT ON CORPORATE GOVERNANCE
Particulars of Key Management Staff

Academic & Professional

Name Age Qualifications Working Experience Area of Responsibility

Tan Ang Meng 51 Certified Public Accountant 1983 – 1991 Director and
Member, Malaysian Institute of Financial Controller Chief Executive Officer
Certified Public Accountants Guinness Malaysian Berhad Fraser & Neave Holdings Bhd
1991 – 2001 (Date appointed:
Regional Director 24.05.2001)
Asia Pacific Breweries Limited

Wang Eng Chin* 47 Bachelor of Business Administration 1987 – 1988 Acting Chief
and Master of Business Administration, Corporate Development Executive Executive Officer,
University of Mississippi, USA Cold Storage (S) Pte Ltd Food & Beverage
1988 – 1991 Fraser and Neave Group
Manager, Plain Heaven (Date appointed:
Cold Storage (S) Pte Ltd 01.10.2006)
Oct 1991 – Sep 1997
General Sales Manager
F&N Foods Pte Ltd
Oct 1997 – Sep 2003
Deputy General Manager
F&N Foods Pte Ltd/
F&N Dairies (M) Sdn Bhd
Oct 2003 – Sep 2006
General Manager
F&N Foods Pte Ltd/
F&N Vietnam Foods Company Limited

* Mr Wang Eng Chin replaces Mr Huang Hong Peng who resigned from the Company on 30 September 2006, to take up a position with Asia Pacific Breweries Limited.

Fraser and Neave, Limited & Subsidiary Companies Annual Report 2006 71
DIRECTORS’ REPORT

Your directors have pleasure in submitting their report and the audited financial statements of the Company and of the
Group for the financial year ended 30 September 2006.

1. DIRECTORATE
The directors of the Company in office at the date of this report are:

Dr Michael Fam
Mr Timothy Chia
Dr Han Cheng Fong
Mr Ho Tian Yee
Mr Koh Beng Seng
Mr Stephen Lee
Mr Lee Ek Tieng
Dr Lee Tih Shih
Mr Nicky Tan Ng Kuang
Mr Anthony Cheong Fook Seng
Mr Patrick Goh (Alternate to Dr Han Cheng Fong)

At the forthcoming Annual General Meeting the following directors retire and, being eligible, offer themselves for
re-election:

– Pursuant to Section 153 of the Companies Act, Cap. 50:

• Dr Michael Fam
• Mr Lee Ek Tieng

– By rotation pursuant to Article 117 of the Company’s Articles of Association:

• Mr Stephen Lee
• Mr Ho Tian Yee
• Mr Nicky Tan Ng Kuang

2. ARRANGEMENTS TO ENABLE DIRECTORS TO ACQUIRE SHARES AND DEBENTURES

Neither at the end of, nor at any time during the financial year did there subsist any arrangements to which the
Company or the Group is a party whereby directors of the Company might acquire benefits by means of the
acquisition of shares in, or debentures of, the Company or any other body corporate except for the options granted
under the Fraser and Neave, Limited Executives’ Share Option Scheme and Frasers Property (China) Limited (“FPCL”)
Share Option Scheme referred to under paragraphs 5(a) and 5(d) respectively. The options granted under the FPCL
Share Option Scheme were offered prior to FPCL becoming a subsidiary of the Company. No executive shall, at any
one time, be entitled to participate in more than one share option scheme implemented by the Company or any of
its subsidiaries.

72 Fraser and Neave, Limited & Subsidiary Companies Annual Report 2006
DIRECTORS’ REPORT

3. DIRECTORS’ INTERESTS IN SHARES OR DEBENTURES

The directors who held office at the end of the financial year and their beneficial or deemed interests in the issued
capital of the Company and its related corporations as recorded in the register required to be kept under Section 164
of the Companies Act, Cap. 50 were as follows:

ORDINARY SHARES OTHER SECURITIES IN

OF THE COMPANY GROUP COMPANIES
As at As at As at As at
1 Oct 2005 30 Sep 2006 1 Oct 2005 30 Sep 2006 NAME OF COMPANY

Michael Fam 1,165,005 (1) 5,425,025 (2) (3) 774,000 4,660,000 (3) Fraser and Neave, Limited
Share Options
50,000 (4) Nil (2) Asia Pacific Breweries
Limited Ordinary Shares
2,315,794 3,500,000 (6) Frasers Property (China)
Limited Ordinary Shares
Nil 1,000,000 (5) Frasers Centrepoint Trust
Units

Timothy Chia Nil (8) Nil Nil (8) Nil

Han Cheng Fong Nil Nil 526,320 3,502,350 (3) Fraser and Neave, Limited
Share Options
3,000,000 3,238,318 (6) Frasers Property (China)
Limited Share Options

(Alternate: Patrick Goh) 112,288 (1) 256,040 (3) (7) 216,720 1,363,400 (3) Fraser and Neave, Limited
Share Options
60,000 (4) Nil Asia Pacific Breweries
Limited Ordinary Shares
1,000,000 1,079,439 (6) Frasers Property (China)
Limited Share Options
Nil 300,000 (5) Frasers Centrepoint Trust
Units

Ho Tian Yee Nil Nil Nil Nil

Koh Beng Seng Nil (8) Nil Nil (8) Nil

Lee Ek Tieng 67,500 87,500 (3) 34,000 34,000 Asia Pacific Breweries
Limited Ordinary Shares

Stephen Lee Nil Nil Nil Nil

Fraser and Neave, Limited & Subsidiary Companies Annual Report 2006 73
DIRECTORS’ REPORT

3. DIRECTORS’ INTERESTS IN SHARES OR DEBENTURES (cont’d)

ORDINARY SHARES OTHER SECURITIES IN

OF THE COMPANY GROUP COMPANIES
As at As at As at As at
1 Oct 2005 30 Sep 2006 1 Oct 2005 30 Sep 2006 NAME OF COMPANY

Lee Tih Shih Nil Nil Nil 100,000 (5) Frasers Centrepoint Trust
Units

Nicky Tan Ng Kuang Nil Nil Nil Nil

Anthony Cheong Fook Seng 4,050 20,250 (3) 204,800 1,662,550 (3) Fraser and Neave, Limited
Share Options
Nil 50,000 (5) Frasers Centrepoint Trust
Units

(1) Includes deemed interest in 80,000 ordinary shares held by Fraser & Neave (Singapore) Ltd Staff Provident Fund (“Fund”) by reason of
Dr Michael Fam and Mr Patrick Goh being Trustees of the Fund.
(2) Dr Michael Fam ceased to be a Trustee of the Fund w.e.f. 23 March 2006.
(3) Adjustment due to sub-division of shares on 4 July 2006.
(4) Includes deemed interest in 50,000 ordinary shares held by the Fund.
(5) Frasers Centrepoint Trust (managed by Frasers Centrepoint Asset Management Ltd), was listed on the Singapore Exchange Securities
Trading Limited on 5 July 2006.
(6) Adjustment due to Rights Issue on 12 September 2006.
(7) Includes deemed interest in 35,000 ordinary shares held by the Fund.
(8) As at date of appointment, i.e. 26 January 2006.

4. DIRECTORS’ CONTRACTUAL BENEFITS

Since the end of the previous financial year, no director has received or has become entitled to receive a benefit
required to be disclosed by Section 201(8) of the Companies Act, Cap. 50 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 had a substantial financial interest except in respect of remuneration as shown in the financial statements
and in respect of participation by Dr Michael Fam, Dr Han Cheng Fong, Mr Anthony Cheong Fook Seng and
Mr Patrick Goh in the Executives’ Share Option Scheme of the Company.

74 Fraser and Neave, Limited & Subsidiary Companies Annual Report 2006
DIRECTORS’ REPORT

5. SHARE OPTIONS

(a) Share Options pursuant to the Fraser and Neave, Limited Executives’ Share Option Scheme
Approved by Shareholders on 7 August 1989 (“the 1989 Scheme”)
The 1989 Scheme expired on 30 September 1999 but Options already granted under that Scheme remain
exercisable until the end of the relevant Option period.

Share Options pursuant to the Fraser and Neave, Limited Executives’ Share Option Scheme
Approved by Shareholders on 30 September 1999 (“the 1999 Scheme”)
The 1999 Scheme succeeded the 1989 Scheme.

The Schemes are administered by the Remuneration & Staff Establishment Committee which comprises the
following three non-executive directors who do not participate in the Schemes:

Mr Stephen Lee (Chairman)

Mr Ho Tian Yee
Mr Lee Ek Tieng

No options have been granted to controlling shareholders or their associates, or parent group employees and
no employee has received 5% or more of the total options available under the schemes.

The following are details of options granted to and exercised by executive directors:

Aggregate
Aggregate Number of Aggregate
Number of Ordinary Shares Number of
Ordinary Shares granted under Ordinary Shares
Number of granted under Options granted under
Ordinary Shares Options since exercised since Options
granted under commencement of commencement of Adjustment outstanding as
Options during Schemes to end of Schemes to end of due to at end of the
Name of the financial year the financial year the financial year Options Sub-division financial year
Participants under review under review under review Lapsed of Shares under review

Michael Fam 258,000 3,490,881 1,595,835 963,046 3,728,000 4,660,000

Han Cheng Fong 174,150 700,470 – – 2,801,880 3,502,350
Anthony Cheong Fook Seng 127,710 332,510 – – 1,330,040 1,662,550
Patrick Goh 92,880 771,503 321,965 176,858 1,090,720 1,363,400

Year 7 Options of the 1999 Scheme

During the financial year ended 30 September 2006, in consideration of the payment of $1 for each offer
accepted, offers of options were granted pursuant to the Scheme in respect of 2,394,857 unissued shares of
the Company at an exercise price of $17.32 (adjusted to $3.46) per share.

Fraser and Neave, Limited & Subsidiary Companies Annual Report 2006 75
DIRECTORS’ REPORT

5. SHARE OPTIONS (cont’d)

Information pertaining to outstanding Options

At the end of the financial year, there were 30,863,510 unissued ordinary shares of the Company under
options granted pursuant to the Schemes. Details of the options to subscribe for ordinary shares in the capital
of the Company granted to executives pursuant to the Schemes are as follows:

Balance as at Adjustment
1.10.2005 or due to Balance Previous Adjusted
Offer Date Options Options Sub-division as at Exercise Exercise
Options Offer Date if later Lapsed # Exercised of Shares 30.9.2006 Price Price * Exercise Period

1989 Scheme
1999 23.12.1998 16,873 – (9,288) 30,340 37,925 $3.86 $0.77 23.09.2001 – 22.11.2008

1999 Scheme
Year 1 23.11.1999 – – – – – – – 23.08.2002 – 22.10.2009
Year 2 21.11.2000 27,818 – (12,347) 61,884 77,355 $6.43 $1.29 22.08.2003 – 21.10.2010
Year 3 08.10.2001 128,514 – (80,606) 191,632 239,540 $6.98 $1.40 09.07.2004 – 08.09.2011
Year 3A 28.01.2002 11,845 – (6,966) 19,516 24,395 $7.81 $1.56 29.10.2004 – 08.09.2011
Year 3B 02.07.2002 130,651 – – 522,604 653,255 $7.79 $1.56 03.04.2005 – 02.06.2012
Year 4 01.10.2002 1,088,866 – (540,821) 2,192,180 2,740,225 $7.54 $1.51 01.07.2005 – 31.08.2012
Year 5 08.10.2003 1,985,728 (50,736) (579,254) 5,422,952 6,778,690 $10.58 $2.12 08.07.2006 – 07.09.2013
Year 6 08.10.2004 2,057,153 (188,422) – 7,474,924 9,343,655 $14.08 $2.82 08.07.2007 – 07.09.2014
Year 7 10.10.2005 2,394,857 (201,163) – 8,774,776 10,968,470 $17.32 $3.46 10.07.2008 – 09.09.2015

7,842,305 (440,321) (1,229,282) 24,690,808 30,863,510

# lapsed due to resignations (404,330) and non-acceptance (35,991)

* adjustment due to sub-division of shares on 4 July 2006

Subsequent to the financial year ended 30 September 2006, a total of 11,241,470 share options of Year 8 of
the 1999 Scheme were offered on 10 October 2006 at an exercise price of $4.22 per share.

Statutory and other information regarding the Options

(i) The Exercise Price is equal to the market value of a share based on the average of the last done price on
the Singapore Exchange Securities Trading Limited for the five market days preceding the option offer
date.

(ii) The grantee may exercise an option during the Exercise Period (which commences 33 months after
the Offer Date) by notice in writing accompanied by a remittance for the number of options at the full
amount of the Exercise Price.

76 Fraser and Neave, Limited & Subsidiary Companies Annual Report 2006
DIRECTORS’ REPORT

5. SHARE OPTIONS (cont’d)

Statutory and other information regarding the Options (cont’d)

(iii) Options expire 119 months after the Offer Date unless an option has previously lapsed by reason of the
resignation of the grantee from employment with the group after the grant of an option and before
its exercise.

(iv) The number of shares which may be acquired by a grantee and the Exercise Price are subject to
adjustment, as confirmed by the auditors of the Company that such adjustment is fair and reasonable,
by reason of any issue of additional shares in the Company by way of rights or capitalisation of profits
or reserves, or repayment and reduction of capital, made while an option remains unexercised.

(v) The persons to whom the options have been issued have no right to participate by virtue of the options
in any share issue of any other company.

(b) Share Options pursuant to the Asia Pacific Breweries Limited Executives’ Share Option Scheme
(“APBL Scheme”)
The APBL Scheme expired in July 2004 but options already granted under that Scheme remains exercisable
until the end of the relevant Option period. The Phantom Share Option Plan approved by the Remuneration
Committee of APBL on 24 September 2004 and endorsed by the APBL Board succeeded the APBL Scheme.

Information pertaining to outstanding Options

At the end of the financial year, 206,069 unissued ordinary shares of APBL were under options granted
pursuant to the APBL Scheme. Details of the options to subscribe for ordinary shares in the capital of APBL
granted to executives pursuant to the APBL Scheme are as follows:

Balance Balance
as at Options Options as at Exercise
Options Offer Date 1.10.2005 Lapsed # Exercised 30.9.2006 Price Exercise Period

1999 23.12.1998 12,379 – (6,100) 6,279 $3.61 22.09.2001 – 21.11.2008

2000 22.12.1999 17,820 – (9,980) 7,840 $4.28 21.09.2002 – 20.11.2009
2001 20.12.2000 53,700 – (38,750) 14,950 $3.91 19.09.2003 – 18.11.2010
2002 08.10.2001 140,625 – (134,975) 5,650 $3.79 08.07.2004 – 07.09.2011
2003 15.10.2002 636,950 – (599,850) 37,100 $4.79 15.07.2005 – 14.09.2012
2004 08.10.2003 1,031,525 (30,625) (866,650) 134,250 $6.29 08.07.2006 – 07.09.2013

1,892,999 (30,625) (1,656,305) 206,069

# lapsed due to resignation

Statutory and other information regarding the APBL Options

The statutory and other information provided above at paragraph 5(a), sub-paragraphs (i) to (v) inclusive in
respect of the Fraser and Neave, Limited Executives’ Share Option Scheme, applies also to the APBL options.

Fraser and Neave, Limited & Subsidiary Companies Annual Report 2006 77
DIRECTORS’ REPORT

5. SHARE OPTIONS (cont’d)

(c) Share Options pursuant to the Fraser & Neave Holdings Bhd Executives’ Share Option Scheme
(“F&NHB Scheme”)
During the financial year ended 30 September 2006, in consideration of the payment of RM1 for each offer
accepted, offers of options were granted by Fraser and Neave, Limited pursuant to the F&NHB Scheme to
executives to acquire:

2007 Options – 2,318,700 shares of RM1 each in the capital of F&NHB at an exercise price of
RM6.12 per share

Information pertaining to outstanding Options

At the end of the financial year, 8,395,800 F&NHB ordinary shares held by Fraser and Neave, Limited were
under options granted pursuant to the F&NHB Scheme. Details of the options granted to executives pursuant
to the F&NHB Scheme to acquire ordinary shares of RM1 each in the capital of F&NHB from Fraser and Neave,
Limited are as follows:

Balance as at
1.10.2005 or Balance
Offer Date Options Options as at Exercise
Options Offer Date if later Lapsed # Exercised 30.9.2006 Price Exercise Period

2001 08.12.2000 45,599 (18,199) (27,400) – RM 3.13 08.09.2003 – 07.11.2005

2002 31.12.2001 406,188 (7,400) (363,088) 35,700 RM 3.56 01.10.2004 – 30.11.2006
2003 21.11.2002 1,531,800 (8,200) (1,438,300) 85,300 RM 3.49 21.08.2005 – 20.10.2007
2004 24.11.2003 2,233,200 (55,500) (700,200) 1,477,500 RM 3.83 24.08.2006 – 23.10.2008
2005 24.11.2004 2,328,900 (102,800) – 2,226,100 RM 4.89 24.08.2007 – 23.10.2009
2006 26.08.2005 2,380,400 (127,900) – 2,252,500 RM 5.54 26.05.2008 – 25.07.2010
2007 26.09.2006 2,318,700 – – 2,318,700 RM 6.12 26.06.2009 – 25.08.2011

11,244,787 (319,999) (2,528,988) 8,395,800

# lapsed due to expiry (18,199) and resignations (301,800)

Statutory and other information regarding the F&NHB Options

The statutory and other information provided above at paragraph 5(a), sub-paragraphs (i) to (v) inclusive in
respect of the Fraser and Neave, Limited Executives’ Share Option Scheme, applies to the F&NHB options
except that Singapore Exchange Securities Trading Limited should be replaced by Bursa Malaysia and that all
options expire 59 months after the option offer date.

78 Fraser and Neave, Limited & Subsidiary Companies Annual Report 2006
DIRECTORS’ REPORT

5. SHARE OPTIONS (cont’d)

(d) Share Options pursuant to Frasers Property (China) Limited Share Option Scheme (“FPCL Scheme”)
Frasers Property (China) Limited (“FPCL”) has in place a share option scheme, FPCL Scheme, since 20 May
2003 and, unless otherwise cancelled or amended will remain in force for 10 years from that date.

2005 Options
During the financial year ended 30 September 2006, offers of options were granted pursuant to the Scheme
in respect of 13,100,000 unissued shares of HK$0.10 each of the Company at an exercise price of HK$0.1343
per share.

Information pertaining to outstanding Options

At the end of the financial year, there were 36,204,392 unissued ordinary shares of FPCL under options
granted pursuant to the FPCL Scheme. Details of the options to subscribe for ordinary shares of HK$0.10 each
in the capital of FPCL granted to employees pursuant to the FPCL Scheme are as follows:

Balance as at Adjustment
1.10.2005 or due to Balance Previous Adjusted
Offer Date Options Options Rights as at Exercise Exercise
Options Offer Date if later Lapsed # Exercised Issue * 30.9.2006 Price Price * Exercise Period

2003 31.12.2003 12,600,000 (2,599,720) – 837,289 10,837,569 HK$0.1706 HK$0.1580 31.12.2004 – 30.12.2013
2004 31.12.2004 12,000,000 (1,323,832) – 873,831 11,549,999 HK$0.1670 HK$0.1547 31.12.2005 – 30.12.2014
2005 31.12.2005 13,100,000 (323,832) – 1,040,656 13,816,824 HK$0.1450 HK$0.1343 30.12.2006 – 29.12.2015

37,700,000 (4,247,384) – 2,751,776 36,204,392

# lapsed due to resignations

* adjustment due to Rights Issue on 12 September 2006

Statutory and other information regarding the Options

(i) The Exercise Price will be determined by FPCL Board, but shall not be less than the highest of:

(1) the closing price as stated in the daily quotation sheet of the Stock Exchange of Hong Kong
Limited (“HKEX”) on the date of grant, which must be a trading day;

(2) the average closing prices as stated in the HKEX’s daily quotation sheets for the five trading
days immediately preceding the date of grant; or

(3) the nominal value of FPCL share.

Fraser and Neave, Limited & Subsidiary Companies Annual Report 2006 79
DIRECTORS’ REPORT

5. SHARE OPTIONS (cont’d)

(ii) The vesting period of the share options is in the following manner:

Percentage of shares over which

a share option is exercisable
Granted Granted
before 2004 after 2004
Vesting Schedule (%) (%)

Before the first anniversary of the date of grant Nil Nil

On or after the first but before the second anniversary

of the date of grant 25 40

On or after the second but before the third anniversary

of the date of grant 25 30

On or after the third but before the fourth anniversary

of the date of grant 25 30

On or after the fourth anniversary of the date of grant 25 NA

In relation to the share options, if the grantee, during any of the periods specified above, exercised
that share options for such number of shares which, in aggregate, represents less than the number
of shares for which the eligible participant may exercise in respect of such period, the balance of the
shares comprised in that share option for which the grantee could have exercised (but did not exercise)
in that period shall be carried forward and added to the number of shares which the grantee may
exercise in the next succeeding period or periods.

(e) Other than those reported in this paragraph 5, no shares of the Company or any corporation in the Group
were issued during the financial year by virtue of the exercise of options to take up unissued shares of the
Company or any corporation in the Group, whether granted before or during that financial year.

(f) Other than those reported in this paragraph 5, there were no unissued shares of the Company or any
corporation in the Group under options as at the end of the financial year to which this report relates.

6. AUDIT COMMITTEE
At a series of meetings convened during the twelve months up to the date of this report, the Audit Committee
reviewed reports prepared respectively by the external and the internal auditors and approved proposals for
improvement in internal controls. The announcement of results quarterly and the financial statements of the
Company and of the Group and the audit report thereon for the full year were also reviewed prior to consideration
and approval of the Board.

The Audit Committee has nominated Ernst & Young for re-appointment by shareholders as auditor for the ensuing
financial year.

80 Fraser and Neave, Limited & Subsidiary Companies Annual Report 2006
DIRECTORS’ REPORT

7. AUDITORS
The auditors, Ernst & Young, Certified Public Accountants, Singapore have expressed willingness to accept
re-appointment.

8. OTHER INFORMATION REQUIRED BY SINGAPORE EXCHANGE SECURITIES TRADING LIMITED

(a) The interests of the directors of the Company in the share capital of the Company and of its related companies
as at the 21st day after the end of the financial year remained unchanged from those at 30 September 2006
as set out at paragraph 3 hereof, except for:

Dr Han Cheng Fong and Mr Anthony Cheong Fook Seng were respectively granted, under the 1999 Executives’
Share Option Scheme, 1,015,875 and 696,600 Year 8 Options exercisable not earlier than 10 July 2009 at
$4.22 per share.

(b) Since the end of the previous financial year, the Company and its subsidiary companies did not enter into
any material contracts involving interests of the directors or controlling shareholders and no such material
contracts still subsist at the end of the financial year, except for:

(i) the Sales and Purchase contract entered into on 19 July 2006 with Dr Han Cheng Fong for the purchase
of a condominium unit at Jing An Si Ji Yuan in Shanghai, for a price of RMB6,299,753; and

(ii) those disclosed in this Directors’ Report and in the Financial Statements.

On behalf of the Board

MICHAEL FAM
Director

HAN CHENG FONG

Director

Singapore,
10 November 2006

Fraser and Neave, Limited & Subsidiary Companies Annual Report 2006 81
STATEMENT BY DIRECTORS

We, MICHAEL FAM and HAN CHENG FONG, being two of the Directors of Fraser and Neave, Limited, do hereby state that
in the opinion of the Directors:

(a) the balance sheet, profit statement, statement of changes in equity and consolidated cash flow statement
together with the notes thereto, set out on pages 84 to 182, are drawn up so as to give a true and fair view of the
state of affairs of the Company and of the Group as at 30 September 2006 and of the results of the businesses
and changes in equity of the Company and of the Group and the cash flows of the Group for the year ended
30 September 2006; and

(b) 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 Board,

MICHAEL FAM
Director

HAN CHENG FONG

Director

Singapore,
10 November 2006

82 Fraser and Neave, Limited & Subsidiary Companies Annual Report 2006
AUDITORS’ REPORT
To the Members of Fraser and Neave, Limited

We have audited the accompanying financial statements of FRASER AND NEAVE, LIMITED (the “Company”) and its subsidiary
companies (the “Group”) set out on pages 84 to 182 for the year ended 30 September 2006. 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 the audit to obtain reasonable assurance about 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 consolidated financial statements of the Group and the balance sheet, profit statement and statement of changes
in equity of the Company are properly drawn up in accordance with the provisions of the Singapore Companies Act,
Cap. 50 (the “Act”) and Singapore Financial Reporting Standards so as to give a true and fair view of the state of
affairs of the Company and of the Group as at 30 September 2006, and of the results and changes in equity of the
Company and of the Group and the cash flows of the Group for the year ended on that date; and

(b) the accounting and other records required by the Act to be kept by the Company and by those subsidiary companies
incorporated in Singapore of which we are the auditors have been properly kept in accordance with the provisions of
the Act.

ERNST & YOUNG

Certified Public Accountants

Singapore,
10 November 2006

Fraser and Neave, Limited & Subsidiary Companies Annual Report 2006 83
PROFIT STATEMENT
for the year ended 30 September 2006

THE GROUP THE COMPANY

2006 2005 2006 2005
Notes ($’000) ($’000) ($’000) ($’000)

(Restated) (Restated)
REVENUE 3
Sale of goods 3,791,611 3,484,241 – –
Other revenue 3,948 3,753 3,559 3,094
3,795,559 3,487,994 3,559 3,094
Cost of sales (2,555,831) (2,397,928) – –
Gross profit 1,239,728 1,090,066 3,559 3,094

Operating expenses
– Distribution (144,738) (127,102) – –
– Marketing (298,031) (291,319) – –
– Administration (233,798) (200,659) (9,286) (6,656)
(676,567) (619,080) (9,286) (6,656)
TRADING PROFIT/(LOSS) 563,161 470,986 (5,727) (3,562)

Gross dividends from subsidiary and joint

venture companies 6 – – 160,975 145,255
Share of joint venture companies’ profits 16,065 19,187 – –
Share of associated companies’ profits 12,325 26,953 – –
Gross income from investments 7 12,028 7,463 673 1,620
PROFIT BEFORE INTEREST, TAXATION
AND EXCEPTIONAL ITEMS 603,579 524,589 155,921 143,313
Interest income 23,312 20,104 1,547 605
Interest expense (83,663) (61,043) (39,192) (20,494)
Net interest expense 4 (60,351) (40,939) (37,645) (19,889)
PROFIT BEFORE TAXATION AND
EXCEPTIONAL ITEMS 4 543,228 483,650 118,276 123,424
Exceptional items 8 34,016 29,304 – 10,005
PROFIT BEFORE TAXATION 577,244 512,954 118,276 133,429
Taxation 9 (145,216) (137,354) (29,803) (29,193)
PROFIT AFTER TAXATION 432,028 375,600 88,473 104,236

ATTRIBUTABLE PROFIT TO:

Shareholders of the Company
– Before exceptional items 295,414 270,968 88,473 94,231
– Exceptional items 24,111 24,685 – 10,005
319,525 295,653 88,473 104,236
Minority interests 112,503 79,947 – –

432,028 375,600 88,473 104,236

Earnings per share attributable to the

shareholders of the Company 11
Basic – before exceptional items 25.3 cts 23.3 cts
– after exceptional items 27.3 cts 25.4 cts
Fully diluted – before exceptional items 25.0 cts 23.1 cts
– after exceptional items 27.1 cts 25.2 cts

The Notes on pages 91 to 182 form an integral part of the Financial Statements.

84 Fraser and Neave, Limited & Subsidiary Companies Annual Report 2006
BALANCE SHEET
as at 30 September 2006

THE GROUP THE COMPANY

2006 2005 2006 2005
Notes ($’000) ($’000) ($’000) ($’000)

(Restated) (Restated)
SHARE CAPITAL AND RESERVES
Share capital 12 400,971 233,359 400,971 233,359
Reserves 12 3,199,509 2,863,280 2,321,320 2,511,136
3,600,480 3,096,639 2,722,291 2,744,495
MINORITY INTERESTS 1,004,098 621,256 – –
4,604,578 3,717,895 2,722,291 2,744,495
Represented by:
FIXED ASSETS 13 1,120,519 1,157,857 – –
INVESTMENT PROPERTIES 14 2,708,016 2,305,537 – –
PROPERTIES UNDER DEVELOPMENT 15 2,483,313 2,018,336 – –
SUBSIDIARY COMPANIES 16 – – 3,229,634 3,296,860
JOINT VENTURE COMPANIES 17 88,990 75,992 408,133 312,740
ASSOCIATED COMPANIES 18 295,898 231,801 – –
INTANGIBLE ASSETS 19 286,432 115,246 – –
OTHER INVESTMENTS 21 61,784 81,737 6,680 6,579
BRANDS 23 2,663 3,715 – 169
OTHER DEBTORS 26 17,537 19,114 – –
DEFERRED TAX ASSETS 32 24,208 9,675 – –
BANK FIXED DEPOSITS 22 – 4,600 – –
CURRENT ASSETS
Properties held for sale 24 178,393 431,867 – –
Inventories 25 365,402 374,816 – –
Trade debtors 26 481,774 585,233 – –
Subsidiary companies 16 – – 110,110 47,332
Joint venture companies 17 3,638 4,141 – –
Associated companies 18 826 688 – –
Other debtors 26 390,788 222,887 5,953 2,944
Short term investments 28 326,748 2,566 28,786 –
Bank fixed deposits 22 614,139 315,251 15,277 22,618
Cash and bank balances 22 220,752 257,516 285 452
2,582,460 2,194,965 160,411 73,346
Deduct: CURRENT LIABILITIES
Trade creditors 29 398,455 403,135 – –
Subsidiary companies 16 – – 16,349 20,329
Joint venture companies 17 1,199 2,063 – –
Associated companies 18 35,724 33,874 – –
Other creditors 29 467,430 431,366 16,124 6,544
Borrowings 30 988,544 1,168,173 94,923 112,340
Provision for taxation 197,216 153,044 5,986 5,986
2,088,568 2,191,655 133,382 145,199

NET CURRENT ASSETS/(LIABILITIES) 493,892 3,310 27,029 (71,853)

7,583,252 6,026,920 3,671,476 3,544,495
Deduct: NON-CURRENT LIABILITIES
Other creditors 29 14,937 14,420 – –
Borrowings 30 2,834,733 2,186,824 949,167 800,000
Provision for employee benefits 31 21,882 22,538 – –
Deferred tax liabilities 32 107,122 85,243 18 –
2,978,674 2,309,025 949,185 800,000
4,604,578 3,717,895 2,722,291 2,744,495

The Notes on pages 91 to 182 form an integral part of the Financial Statements.

Fraser and Neave, Limited & Subsidiary Companies Annual Report 2006 85
STATEMENT OF CHANGES IN EQUITY

THE GROUP
Capital Fair Value Employee
Share Share Redemption Capital Revenue Exchange Adjustment Share Option Dividend Minority Total
Capital Premium Reserve Reserve Reserve Reserve Reserve Reserve Reserve Total Interests Equity
Notes ($’000) ($’000) ($’000) ($’000) ($’000) ($’000) ($’000) ($’000) ($’000) ($’000) ($’000) ($’000)

YEAR ENDED 30 SEPTEMBER 2006

Balance at 1 October 2005
As previously stated 233,359 152,223 3,228 527,012 2,092,423 6,967 – – 81,676 3,096,888 1,124,438 4,221,326
Effect of adopting FRS 102 – – – – (5,659) – – 5,410 – (249) (101) (350)
Effect of adopting
Proportionate Consolidation – – – – – – – – – – (503,081) (503,081)
As restated 233,359 152,223 3,228 527,012 2,086,764 6,967 – 5,410 81,676 3,096,639 621,256 3,717,895
Effect of adopting FRS 39 – – – – 1,294 – 4,480 – – 5,774 1,157 6,931
233,359 152,223 3,228 527,012 2,088,058 6,967 4,480 5,410 81,676 3,102,413 622,413 3,724,826
Revaluation surplus
on investment properties – – – 326,600 – – – – – 326,600 21,825 348,425
Revaluation surplus on
investment and
properties for
sale realised – – – (4,023) 977 – – – – (3,046) – (3,046)
Deferred taxation on
revaluation of assets – – – (1,818) – – – – – (1,818) – (1,818)
Share of joint venture
and associated
companies’ reserves – – – 1,546 2,771 – (194) – – 4,123 – 4,123
Change in minority interests’
in reserves upon the issue
of shares by subsidiary
companies – – – (36) (321) – – – – (357) 357 –
Net fair value changes on
available-for-sale
financial assets – – – – – – 52,321 – – 52,321 (196) 52,125
Currency translation
difference – – – (115) – (79,791) – – – (79,906) (31,001) (110,907)
Net income recognised
directly in equity – – – 322,154 3,427 (79,791) 52,127 – – 297,917 (9,015) 288,902
Profit after taxation – – – – 319,525 – – – – 319,525 112,503 432,028
Total recognised income
and expenses
for the year – – – 322,154 322,952 (79,791) 52,127 – – 617,442 103,488 720,930
Transfer of reserves by
overseas subsidiary
companies in
compliance with
statutory requirements – – – 140 (140) – – – – – – –
Employee share-based
expense – – – – – – – 5,748 – 5,748 301 6,049
Issue of shares in the
Company upon
exercise of share
options 12 8,865 3,296 – – – – – (1,211) – 10,950 – 10,950
Transfer to share capital 158,747 (155,519) (3,228) – – – – – – – – –
Contribution of capital
by minority interests – – – – – – – – – – 349,422 349,422
Change of interests in
subsidiary and joint
venture companies – – – – – – – – – – (9,057) (9,057)
Minority interests’ loan – – – – – – – – – – 1,656 1,656
Equity’s listing expenses – – – – (7,412) – – – – (7,412) (7,120) (14,532)
Dividends 10
Dividend to minority
interests, paid – – – – – – – – – – (57,005) (57,005)
Dividend to shareholders, paid – – – – (46,985) – – – (81,676) (128,661) – (128,661)
Dividend to shareholders, proposed – – – – (93,835) – – – 93,835 – – –
Balance at 30 September 2006 400,971 – – 849,306 2,262,638 (72,824) 56,607 9,947 93,835 3,600,480 1,004,098 4,604,578

The Notes on pages 91 to 182 form an integral part of the Financial Statements.

86 Fraser and Neave, Limited & Subsidiary Companies Annual Report 2006
STATEMENT OF CHANGES IN EQUITY

THE GROUP
Employee
Capital Share
Share Share Redemption Capital Revenue Exchange Option Dividend Minority Total
Capital Premium Reserve Reserve Reserve Reserve Reserve Reserve Total Interests Equity
Notes ($’000) ($’000) ($’000) ($’000) ($’000) ($’000) ($’000) ($’000) ($’000) ($’000) ($’000)

YEAR ENDED 30 SEPTEMBER 2005

Balance at 1 October 2004
As previously stated 232,008 143,598 3,228 561,251 1,922,457 (17,545) – 81,203 2,926,200 915,348 3,841,548
Effect of adopting FRS 102 – – – – (1,812) – 1,812 – – – –
Effect of adopting
Proportionate Consolidation – – – – – – – – – (447,507) (447,507)
As restated 232,008 143,598 3,228 561,251 1,920,645 (17,545) 1,812 81,203 2,926,200 467,841 3,394,041

Revaluation deficit on properties – – – (28,365) – – – – (28,365) – (28,365)

Revaluation surplus reversed on
transfer of investment
properties to fixed assets – – – (1,467) – – – – (1,467) – (1,467)
Revaluation surplus on
investment and
development properties realised – – – (1,799) 1,742 – – – (57) – (57)
Deferred taxation on revaluation
of assets – – – (3,448) – – – – (3,448) – (3,448)
Share of joint venture and associated
companies’ reserves – – – 685 (2,898) – – – (2,213) – (2,213)
Change in minority interests’ in
reserves upon the issue of
shares by subsidiary companies – – – (22) 50 – – – 28 (28) –
Currency translation difference – – – 122 – 24,512 – – 24,634 (4,393) 20,241
Net expenses recognised directly
in equity – – – (34,294) (1,106) 24,512 – – (10,888) (4,421) (15,309)
Profit after taxation – – – – 295,653 – – – 295,653 79,947 375,600

Total recognised income and

expenses for the year – – – (34,294) 294,547 24,512 – – 284,765 75,526 360,291
Transfer of reserves by overseas
subsidiary companies in
compliance with statutory
requirements – – – 55 (55) – – – – – –
Employee share-based expense – – – – – – 3,598 – 3,598 – 3,598
Issue of shares in the Company
upon exercise of share options 12 1,351 8,625 – – – – – – 9,976 – 9,976
Contribution of capital by minority
interests – – – – – – – – – 9,437 9,437
Change of interests in subsidiary
companies – – – – – – – – – 125,173 125,173
Minority interests’ loan – – – – – – – – – (37) (37)
Dividends 10
Dividend to minority interests, paid – – – – – – – – – (56,684) (56,684)
Dividend to shareholders, paid – – – – (46,697) – – (81,203) (127,900) – (127,900)
Dividend to shareholders, proposed – – – – (81,676) – – 81,676 – – –
Balance at 30 September 2005 233,359 152,223 3,228 527,012 2,086,764 6,967 5,410 81,676 3,096,639 621,256 3,717,895

The Notes on pages 91 to 182 form an integral part of the Financial Statements.

Fraser and Neave, Limited & Subsidiary Companies Annual Report 2006 87
STATEMENT OF CHANGES IN EQUITY

THE COMPANY
Capital Fair Value Employee
Share Share Redemption Capital Revenue Adjustment Share Option Dividend
Capital Premium Reserve Reserve Reserve Reserve Reserve Reserve Total
Notes ($’000) ($’000) ($’000) ($’000) ($’000) ($’000) ($’000) ($’000) ($’000)

YEAR ENDED 30 SEPTEMBER 2006

Balance at 1 October 2005
As previously stated 233,359 152,223 3,228 1,039,274 1,231,473 – – 81,676 2,741,233
Effect of adopting FRS 102 – – – – (1,330) – 4,592 – 3,262

As restated 233,359 152,223 3,228 1,039,274 1,230,143 – 4,592 81,676 2,744,495

Effect of adopting FRS 39 – – – – 1,860 212 – – 2,072

233,359 152,223 3,228 1,039,274 1,232,003 212 4,592 81,676 2,746,567

Net fair value changes on

available-for-sale
financial assets – – – – – (141) – – (141)

Net income recognised

directly in equity – – – – – (141) – – (141)
Profit after taxation – – – – 88,473 – – – 88,473
Total recognised income
and expenses for the year – – – – 88,473 (141) – – 88,332
Employee share-based expense – – – – – – 5,103 – 5,103
Issue of shares in the Company
upon exercise of share options 12 8,865 3,296 – – – – (1,211) – 10,950
Transfer to share capital 158,747 (155,519) (3,228) – – – – – –
Dividends 10
Dividend to shareholders, paid – – – – (46,985) – – (81,676) (128,661)
Dividend to shareholders, proposed – – – – (93,835) – – 93,835 –

Balance at 30 September 2006 400,971 – – 1,039,274 1,179,656 71 8,484 93,835 2,722,291

YEAR ENDED 30 SEPTEMBER 2005

Balance at 1 October 2004
As previously stated 232,008 143,598 3,228 1,039,274 1,254,680 – – 81,203 2,753,991
Effect of adopting FRS 102 – – – – (400) – 1,473 – 1,073

As restated 232,008 143,598 3,228 1,039,274 1,254,280 – 1,473 81,203 2,755,064

Profit after taxation – – – – 104,236 – – – 104,236

Total recognised income for the year – – – – 104,236 – – – 104,236

Employee share-based expense – – – – – – 3,119 – 3,119
Issue of shares in the Company
upon exercise of share options 12 1,351 8,625 – – – – – – 9,976

Dividends 10
Dividend to shareholders, paid – – – – (46,697) – – (81,203) (127,900)
Dividend to shareholders, proposed – – – – (81,676) – – 81,676 –

Balance at 30 September 2005 233,359 152,223 3,228 1,039,274 1,230,143 – 4,592 81,676 2,744,495

The Notes on pages 91 to 182 form an integral part of the Financial Statements.

88 Fraser and Neave, Limited & Subsidiary Companies Annual Report 2006
CASH FLOW STATEMENT
for the year ended 30 September 2006

THE GROUP
2006 2005
($’000) ($’000)

(Restated)
CASH FLOWS FROM OPERATING ACTIVITIES
Profit before taxation and exceptional items 543,228 483,650
Adjustments for:
Depreciation of fixed assets and investment properties 116,859 110,821
Impairment of fixed assets and other investments 3,397 361
Impairment reversal of fixed assets and properties developed for sale (1,320) (234)
Write off of intangible assets – 1,870
Provision for employee benefits 3,194 1,901
Provision for foreseeable losses in properties developed for sale and properties held for sale 20,583 16,517
Loss on disposal of fixed assets (net) 1,891 902
Profit on disposal of investment properties and other investments (net) (4,502) (727)
Amortisation of development properties 2,889 105
Amortisation of brands and intangible assets 5,562 5,987
Interest expenses (net) 58,162 40,939
Share of joint venture companies’ profits (16,065) (19,187)
Share of associated companies’ profits (12,325) (26,953)
Investment income (12,028) (7,463)
Profit on properties developed for sale and properties held for sale (247,943) (151,569)
Employee share-based expense 10,162 4,205
Fair value adjustments of financial instruments 3,252 –
Operating cash before working capital changes 474,996 461,125
Change in inventories 37,181 (56,436)
Change in trade and other debtors (29,997) (194,727)
Change in joint venture and associated companies’ balances 1,351 (6,651)
Change in trade and other creditors (1,037) 113,666
Currency realignment (9,700) 2,657
Cash generated from operations 472,794 319,634
Interest expenses paid, net (58,162) (40,882)
Income taxes paid (102,104) (92,683)
Payment of employee benefits (2,651) (2,571)
Progress payment received/receivable on properties
developed for sale and properties held for sale 1,114,092 1,017,407
Development expenditure on properties developed for sale (1,158,416) (891,307)
Net cash from operating activities 265,553 309,598

CASH FLOWS FROM INVESTING ACTIVITIES

Dividends from joint venture and associated companies 12,740 12,327
Investment income 12,028 7,655
Proceeds from return of capital from joint venture company – 62
Proceeds from sale of fixed assets and properties 26,652 4,882
Proceeds from sale of associated companies – 2,433
Proceeds from sale of other investments and short term investments 5,220 18,850
Proceeds from disposal of subsidiary companies – 1,251
Proceeds from disposal of business 1,390 –
Purchase of fixed assets (116,479) (207,288)
Purchase of other investments (230,570) (31,267)
Acquisition of minority interests of subsidiary companies (1,845) (15,802)
Acquisition of subsidiary companies and businesses (39,750) (81,128)
Payment for intangible assets (9,184) (11,526)
Development expenditure on investment properties (49,984) (602)
Investments in joint venture and associated companies (250,073) (18,087)
Repayment of trade advances (1,002) (1,064)
Net cash used in investing activities (640,857) (319,304)

The Notes on pages 91 to 182 form an integral part of the Financial Statements.

Fraser and Neave, Limited & Subsidiary Companies Annual Report 2006 89
CASH FLOW STATEMENT
for the year ended 30 September 2006

THE GROUP
2006 2005
($’000) ($’000)

(Restated)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from term loans and bank borrowings 481,487 94,456
Transfer from secured bank deposits 4,600 153,287
Placement of fixed deposits pledged (6,082) –
Payment of equity’s listing expenses (14,532) –
Loan from/(to) minority interests 1,656 (37)
Proceeds from issue of shares:
– by subsidiary companies to minority interests 349,422 9,437
– by the Company to shareholders 10,950 9,976
Payment of dividends:
– by subsidiary companies to minority interests (57,005) (56,684)
– by the Company to shareholders (128,661) (127,900)
Net cash from financing activities 641,835 82,535
Net increase in cash and cash equivalents 266,531 72,829
Cash and cash equivalents at beginning of year 567,849 491,706
Effects of exchange rate changes on cash and cash equivalents (17,644) 3,314
Cash and cash equivalents at end of year 816,736 567,849
Cash and cash equivalents at end of year comprise:
Cash and bank deposits (Note 22) 834,891 572,767
Bank overdrafts (Note 30) (12,073) (4,918)
822,818 567,849
Less: Fixed deposits pledged (6,082) –
816,736 567,849
Analysis of acquisition and disposal of subsidiary companies and businesses
Net assets acquired:
Fixed assets 9,540 18,740
Development properties – 122,197
Investment properties – 108,833
Other non-current assets 8,160 16,393
Current assets 24,812 143,792
Current liabilities (6,528) (39,749)
Non-current liabilities (284) (119,015)
Minority interests (489) (124,276)
Cash 4,715 62,984
39,926 189,899
Cost of investment as a joint venture company – (37,290)
Goodwill on acquisition (net) 4,539 (4,336)
Consideration paid 44,465 148,273
Add: Loan on acquisition – (4,161)
44,465 144,112
Less: Cash of subsidiary companies and businesses (4,715) (62,984)
Cash flow on acquisition net of cash and cash equivalents acquired 39,750 81,128
Net assets disposed:
Fixed assets (154) –
Current assets (1,792) (2,681)
Current liabilities 264 16
Minority interests – 1,522
Cash – (3,896)
(1,682) (5,039)
Translation difference – 589
Loss/(Gain) on disposal 292 (697)
Consideration received (1,390) (5,147)
Less: Cash of subsidiary companies – 3,896
Cash flow on disposal net of cash and cash equivalents disposed (1,390) (1,251)

The Notes on pages 91 to 182 form an integral part of the Financial Statements.

90 Fraser and Neave, Limited & Subsidiary Companies Annual Report 2006
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 September 2006

The following Notes form an integral part of the Financial Statements on pages 84 to 90.

1. GENERAL
Fraser and Neave, Limited (the “Company”) is a limited liability company incorporated and domiciled in Singapore. The
registered office of the Company is located at #21-00 Alexandra Point, 438 Alexandra Road, Singapore 119958.

The principal activities of the Group are:

(a) production and sale of soft drinks, beer, stout, dairy products and glass containers;
(b) development of and investment in property, and investment in and management of REIT; and
(c) printing and publishing.

During the year, following the listing of Frasers Centrepoint Trust, a Real Estate Investment Trust (“REIT”) on SGX-ST,
the principal activities of the Group have been expanded to include investment in and management of REIT.

These activities are carried out through the Company’s subsidiary, joint venture and associated companies to which
the Company provides management and administrative services.

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

The Company’s operation is managed through a wholly-owned subsidiary company.

The financial statements of the Company and the consolidated financial statements of the Group were authorised
for issue in accordance with a resolution of the Directors on 10 November 2006.

2. ACCOUNTING POLICIES

2.1 Basis of Preparation

The financial statements of the Company and the consolidated financial statements of the Group are
presented in Singapore dollars and all values are rounded to the nearest thousand ($’000) unless otherwise
stated. The financial statements of the Company and of the Group are prepared on a historical cost basis
except as disclosed in the accounting policies below. The financial statements are prepared in accordance with
Singapore Financial Reporting Standards (“FRS”) as required by the Companies Act, Cap.50.

2.2 Changes in Accounting Policies

The Group and the Company have applied the same accounting policies and methods of computation in
the preparation of the financial statements for the current financial year and are consistent with those used
in the previous financial year except for the changes in the accounting policies discussed below:

(i) The authorities have clarified the requirement to prepare accounts under Section 201 (1A), (3) and
(3A) of the Companies Act (“Act”). Following this clarification, the Group reviewed its investments
in subsidiary companies. Subsidiary companies that meet the definition under Section 5 of the Act
but not that under FRS 27 will be accounted for in the consolidated financial statements of the
Group under FRS 28 or 31 as appropriate. Only subsidiary companies that meet the definition in
FRS 27 will be consolidated.

Fraser and Neave, Limited & Subsidiary Companies Annual Report 2006 91
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 September 2006

2. ACCOUNTING POLICIES (cont’d)

2.2 Changes in Accounting Policies (cont’d)

Consequent to the review, the Group had adopted proportionate consolidation in its Group policy
for joint venture companies. This has resulted in the Group’s joint venture companies, previously
equity accounted for share of results, now being proportionately consolidated. The change in policy is
applied retrospectively.

These adjustments do not affect the Group’s attributable profit for the year and the retained profits
in the consolidated balance sheet.

(ii) New or revised and Interpretations to FRS (“INT FRS”)

On 1 October 2005, the Group and the Company adopted the new or revised FRS and Interpretations
to FRS (“INT FRS”) that are applicable in the current financial year. The following are the FRS and
INT FRS that are relevant to the Group:

FRS 1 (revised 2004) Presentation of Financial Statements

FRS 2 (revised 2004) Inventories
FRS 8 (revised 2004) Accounting Policies, Changes in Accounting Estimates and Errors
FRS 10 (revised 2004) Events after the Balance Sheet Date
FRS 16 (revised 2004) Property, Plant and Equipment
FRS 17 (revised 2004) Leases
FRS 21 (revised 2004) The Effects of Changes in Foreign Exchange Rates
FRS 24 (revised 2004) Related Party Disclosures
FRS 27 (revised 2004) Consolidated and Separate Financial Statements
FRS 28 (revised 2004) Investments in Associates
FRS 31 (revised 2004) Interests in Joint Ventures
FRS 32 (revised 2004) Financial Instruments: Disclosure and Presentation
FRS 33 (revised 2004) Earnings per Share
FRS 39 Financial Instruments: Recognition and Measurement
FRS 102 Share-based Payments
FRS 105 Non-current Assets Held for Sale and Discontinued Operations
INT FRS 101 Changes in Existing Decommissioning, Restoration and Similar Liabilities
Amendments to INT FRS 12 Consolidation – Special Purpose Entities

The impact of the changes in accounting policies is as follows:

FRS 39
The Group had adopted FRS 39 prospectively on 1 October 2005. At that date, financial assets within
the scope of FRS 39 were classified as either (i) financial assets at fair value through profit or loss,
(ii) loans and receivables, (iii) held-to-maturity investments or (iv) available-for-sale financial assets,
as appropriate. Financial assets that were classified as financial assets at fair value through profit or
loss and available-for-sale financial assets were measured at fair value while loans and receivables
and held-to-maturity investments were measured at amortised cost using the effective interest
rate method.

92 Fraser and Neave, Limited & Subsidiary Companies Annual Report 2006
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 September 2006

2. ACCOUNTING POLICIES (cont’d)

2.2 Changes in Accounting Policies (cont’d)

(ii) New or revised and Interpretations to FRS (“INT FRS”) (cont’d)

FRS 39 (cont’d)
At 1 October 2005, differences between the carrying values and fair values of financial assets at fair
value through profit or loss were recognised in revenue reserve while the differences between carrying
values and fair values of available-for-sale financial assets were recognised in the fair value adjustment
reserve. For investments carried at amortised cost, any differences between the carrying values and
amortised cost as at 1 October 2005 were recognised in revenue reserve.

At 1 October 2005, financial liabilities (other than derivative financial instruments) within the
scope of FRS 39 were measured at amortised cost using the effective interest rate method. Any
difference between the carrying values and amortised cost as at 1 October 2005 were recognised
in revenue reserve.

In accordance with the transitional provisions of FRS 39, the financial effects arising from the
measurement of financial instruments will be recorded prospectively. Consequently, the comparatives
for 2005 are not restated. The financial effect of adopting FRS 39 is an increase of $5.8 million which
has been adjusted to Group shareholders’ equity on 1 October 2005 (made up of an increase in
revenue reserve and fair value reserve of $1.3 million and $4.5 million respectively) and a decrease of
$3.2 million to the Group’s attributable profit for the year.

The financial effects to the Company is an increase of $2.1 million to Company’s shareholders’ equity
on 1 October 2005 (made up of increase in revenue reserve and fair value reserve of $1.9 million and
$0.2 million respectively) and a decrease of $3.3 million to the Company’s attributable profit for the year.

FRS 102
The main impact of FRS 102 on the Group and Company is the recognition of an expense and a
corresponding entry to equity for share options granted and the recognition of an expense and a
corresponding liability for phantom share options granted.

The Group and the Company have applied FRS 102 retrospectively and have taken advantage of
the transitional provisions of FRS 102 in respect of equity-settled awards. As a result, the Group and
the Company have applied FRS 102 only to share options granted after 22 November 2002 and not
vested by 1 October 2005. Consequently, the Group’s opening reserves have been restated to take
into account a cumulative charge of $5.7 million to revenue reserve and a credit of $5.4 million to
employee share option reserve up to 30 September 2005. The charge to Group attributable profit
for the year is $8.4 million (2005: $3.8 million) and credit to employee share option reserve is
$4.5 million (2005: $ 3.6 million).

Fraser and Neave, Limited & Subsidiary Companies Annual Report 2006 93
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 September 2006

2. ACCOUNTING POLICIES (cont’d)

2.2 Changes in Accounting Policies (cont’d)

(ii) New or revised and Interpretations to FRS (“INT FRS”) (cont’d)

FRS 102 (cont’d)

The financial effect to the Company is a cumulative charge of $1.3 million to revenue reserve and a
credit of $4.6 million to employee share option reserve up to 30 September 2005. The charge to the
Company attributable profit for the year is $1.7 million (2005: $0.9 million) and credit to employee
share option reserve is $3.9 million (2005: $3.1 million).

Apart from the above, the Group and the Company adopted various revisions in FRS applicable from
1 October 2005. These do not have a material impact on the Group and the Company.

2.3 Basis of Consolidation

The Company’s investments in subsidiary companies are stated at cost less accumulated impairment losses.

Subsidiary companies are consolidated from the effective date of acquisition or up to the effective date
of disposal. Subsidiary companies are those controlled by the Group. The financial year of the Company
and all its subsidiary companies ends on 30 September unless otherwise stated. The consolidated financial
statements of the Group incorporate the financial statements of the Company and all its subsidiary companies
made up to 30 September. The financial statements of subsidiary companies are prepared using consistent
accounting policies. Adjustments are made to any dissimilar material accounting policies to conform to the
Group’s significant accounting policies.

Acquisitions of subsidiary companies are accounted for using the purchase method of accounting. The cost
of an acquisition is measured as the fair value of the assets given, equity instruments issued or liabilities
incurred or assumed at the date of exchange, plus costs directly attributable to the acquisition. Identifiable
assets acquired and liabilities and contingent liabilities assumed in a business combination are measured
initially at their fair values on the date of acquisition, irrespective of the extent of any minority interest. Please
refer to Note 2.13 (b) for the accounting policy on goodwill on acquisition of subsidiary companies.

In preparing the consolidated financial statements, intercompany transactions, balances and unrealised gains
on transactions between group companies are eliminated. Unrealised losses are also eliminated unless the
transaction provides evidence of an impairment of the asset transferred.

Minority interest is that part of the net results of operations and of net assets of a subsidiary attributable to
interests which are not owned directly or indirectly by the Group. It is measured as the minorities’ share of
the fair value of the subsidiary companies’ identifiable assets and liabilities at the date of acquisition by the
Group and the minorities’ share of changes in equity since the date of acquisition, except when the losses
applicable to the minority in a subsidiary exceed the minority interest in the equity of that subsidiary company.
In such cases, the excess and further losses applicable to the minority are attributed to the equity holders of
the Company, unless the minority has a binding obligation to, and is able to, make good the losses. When that
subsidiary company subsequently reports profits, the profits applicable to the minority are attributed to the
equity holders of the Company until the minority’s share of losses previously absorbed by the equity holders
of the Company has been recovered.

A list of the Company’s subsidiary companies is shown in Note 42.

94 Fraser and Neave, Limited & Subsidiary Companies Annual Report 2006
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 September 2006

2. ACCOUNTING POLICIES (cont’d)

2.4 Joint Venture Companies

A joint venture company (not being a subsidiary company) is a company in which the group has a long-term
interest of not more than 50% of the equity and has a contractual agreement to jointly share the control with
one or more parties in the joint venture company’s commercial and financial affairs.

The Group recognises its interest in joint venture companies using proportionate consolidation. The Group
combines its share of each of the assets, liabilities, income and expenses of the joint venture companies with
the similar items, line by line, in its consolidated financial statements.

The joint venture is proportionately consolidated until the date on which the Group ceases to have joint
control over the joint venture.

Joint venture companies (“JVC”) that are held directly by the Group’s joint venture companies are equity
accounted for in accordance with the accounting policies of these joint venture companies. No adjustments
have been made at the Group to recognise the interest of these JVC using proportionate consolidation as
the contribution of these JVC to the Group are not material. Details of the Group’s share of the consolidated
results, assets and liabilities of the JVC can be found in Note 17.

In the Company’s separate financial statements, interests in joint venture company is carried at cost less
impairment losses.

A list of the joint venture companies is shown in Note 42.

2.5 Associated Companies

An associated company (not being a subsidiary company or joint venture company) is a company in which
the Group exercises significant influence over the financial and operating policy decisions.

The Group’s investments in associated companies are recorded at cost less accumulated impairment losses
and adjusted to recognise the Group’s share of post-acquisition reserves of the associated companies.
Investments in associated companies include goodwill.

When the Group’s share of losses in an associated company equals or exceeds its interest in the associated
company, the Group does not recognise further losses, unless it has incurred obligations or made payments
on behalf of the associated company.

The Group’s share of the results of associated companies includes the Group’s share of taxation and
exceptional items, and net assets of the associated companies are included in the consolidated financial
statements under the equity method based on their latest audited financial statements except where their
financial periods do not end on 30 September, then management accounts to 30 September are used.

Where an investment in an associated company is acquired or sold during the year, its results are included
from the date of acquisition or excluded from the date of sale.

A list of associated companies is shown in Note 42.

Fraser and Neave, Limited & Subsidiary Companies Annual Report 2006 95
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 September 2006

2. ACCOUNTING POLICIES (cont’d)

2.6 Revenue Recognition

Revenue from the sale of goods is recognised upon the transfer of significant risk and rewards of the goods
to the customer, which generally coincides with delivery and acceptance of the goods sold.

The profit and interest on hire purchase sales are credited to the profit statement by apportioning the estimated
gross profit and interest evenly over the period to which the contract relates.

Rental income is accounted for on a straight-line basis over the lease terms on ongoing leases.

Revenue on properties developed for sale represents the proportion of sales proceeds of the actual floor area
sold at the balance sheet date based on the percentage of completion method.

Revenue from completed properties held for sale is recognised upon signing of the sale and purchase
agreement.

Interest income is taken up on an accrual basis (using the effective interest method).

Other dividend income is taken up according to the date when dividend is declared payable.

Other categories of revenue are taken up on an accrual basis.

2.7 Provisions
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past
event, it is probable that an outflow of resources embodying economic benefits will be required to settle the
obligation and a reliable estimate can be made of the amount of the obligation. Provisions are reviewed at
each balance sheet date and adjusted to reflect the current best estimate. Where the effect of time value of
money is material, the amount of the provision is the present value of the expenditure expected to be required
to settle the obligation.

2.8 Taxation

(a) Current Tax

Current tax assets and liabilities for the current and prior periods are measured at the amount
expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to
compute the amount are those that are enacted or substantively enacted by the balance sheet date.

(b) Deferred Tax

The tax charge is based on the profit for the year, as adjusted for tax purposes, together with a charge
or credit for deferred taxation. Deferred income tax is provided in full, using the liability method, on
all temporary differences as at the balance sheet date between the tax bases of assets and liabilities
and their carrying amounts in the financial statements. The principal temporary differences arise from
depreciation of fixed assets, revaluations of certain non-current assets and of derivative contracts,
provisions for pensions and other post retirement benefits and tax losses carried forward; and, in
relation to acquisitions, on the difference between the fair values of the net assets acquired and their
tax base.

96 Fraser and Neave, Limited & Subsidiary Companies Annual Report 2006
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 September 2006

2. ACCOUNTING POLICIES (cont’d)

2.8 Taxation (cont’d)

(b) Deferred Tax (cont’d)

Deferred tax assets are recognised for all deductible temporary differences to the extent that it is
probable that future taxable profits will be available against which the deductible temporary
differences can be utilised. The carrying amount of deferred tax assets is reviewed at each balance
sheet date and reduced by the extent that it is no longer probable that sufficient taxable profits will be
available to allow all or part of the deferred tax assets to be recovered.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period
when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been
enacted at or subsequently enacted after the balance sheet date.

Deferred income tax is provided on all temporary differences arising on investments in subsidiary,
joint venture and associated companies, except where the timing of the reversal of the temporary
difference can be controlled and it is probable that the temporary difference will not reverse in the
foreseeable future.

Deferred tax is charged or credited directly to equity if the tax relates to items that are charged or
credited, in the same or a different period, directly to equity.

Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set off
current tax assets against current tax liabilities and the deferred taxes relate to the same taxable entity
and the same taxation authority.

2.9 Fixed Assets

Fixed assets are carried at cost or valuation less accumulated depreciation and accumulated impairment
losses. The cost of an asset comprises its purchase price and any directly attributable costs of bringing the
asset to working condition for its intended use. Dismantlement, removal or restoration costs are included
as part of the cost of fixed assets if the obligation for dismantlement, removal or restoration is incurred as
a consequence of acquiring or using the asset. Expenditure for additions, improvements and renewals are
capitalised and expenditure for maintenance and repairs are charged to the profit statement. Subsequent
expenditure relating to fixed assets that has already been recognised is added to the carrying amount of the
asset when it is probable that future economic benefits, in excess of the standard of performance of the
asset before the expenditure was made, will flow to the Group and the cost can be reliably measured. Other
subsequent expenditure is recognised as an expense during the financial year in which it is incurred.

When assets are sold or retired, their cost or valuation and accumulated depreciation are removed from the
financial statements and any gain or loss resulting from their disposal is included in the profit statement. Any
amount in revaluation reserve relating to that asset is transferred to revenue reserve.

Fraser and Neave, Limited & Subsidiary Companies Annual Report 2006 97
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 September 2006

2. ACCOUNTING POLICIES (cont’d)

2.9 Fixed Assets (cont’d)

When an asset is revalued, any accumulated depreciation at the date of revaluation is eliminated against the
gross carrying amount of the asset. The net amount is then restated to the revalued amount of the asset. Any
surplus on revaluation is credited to asset revaluation reserve unless they offset previous revaluation losses
of the same asset that were taken to the profit statement. A decrease in net carrying amount arising on
revaluation of fixed assets is charged to the profit statement to the extent that it exceeds any surplus held in
asset revaluation reserve relating to previous revaluations of the same class of assets.

Depreciation is calculated on the straight line method to write off the cost or valuation of fixed assets less
residual value over their estimated useful lives. No depreciation is charged for freehold land and uncommissioned
capital work-in-progress. The residual values, depreciation method and useful lives are reviewed and adjusted
as appropriate at each balance sheet date. The annual depreciation rates applied to write down the fixed
assets over their estimated useful lives are as follows:

Leasehold land – Lease term (ranging from 10 to 99 years)

Building – 2% to 5%
Plant, machinery and equipment – 3.3% to 33%
Motor vehicle and forklift – 10% to 20%
Postmix and vending machine – 10%
Furniture and fitting, computer equipment and beer cooler – 9% to 33%

Capital work-in-progress is not depreciated until each stage of development is completed and becomes
operational.

2.10 Investment Properties

Investment properties are held to earn rental income and for capital appreciation and are treated as
non-current investments.

Short leasehold investment properties (those with the balance of their lease of 50 years or less) are stated
at cost (or directors’ valuation carried out in the past, where applicable) less accumulated depreciation and
accumulated impairment losses. Depreciation is calculated on a straight line basis over 50 years or the term
of the lease, if shorter.

Freehold and leasehold investments are stated at directors’ valuation. The directors’ valuation is guided by the
open market value determined annually by independent professional valuers.

The surplus on revaluation is credited directly to revaluation reserve unless it reverses a previous revaluation
decrease relating to the same asset, which was previously recognised as an expense. In these circumstances
the increase is recognised as income to the extent of the previous write down. Any deficit on revaluation
is recognised as an expense unless it reverses a previous surplus relating to that asset, in which case
it is charged against any related revaluation surplus, to the extent that the decrease does not exceed
the amount held in the revaluation surplus in respect of that same asset. Any balance remaining in the
revaluation surplus in respect of an investment property is credited to the profit statement on disposal of
the property.

98 Fraser and Neave, Limited & Subsidiary Companies Annual Report 2006
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 September 2006

2. ACCOUNTING POLICIES (cont’d)

2.11 Properties Under Development

Properties under development are stated at cost (or directors’ valuation based on an independent
professional valuation, when applicable) less provision for foreseeable losses. The cost of properties under
development includes cost of land and construction, related overhead expenditure and financing charges
incurred during the period of construction and up to the completion of construction.

Provision for foreseeable losses of property under development is made when it is anticipated that the
net realisable value has fallen below cost.

Developments are considered complete upon the issue of Temporary Occupation Permit. When completed,
properties held for investment are classified as investment properties and properties for sale are transferred
to current assets as completed properties held for sale.

Profit on properties developed for sale is recognised on partly completed projects which have been sold and
is based on the percentage of completion. The percentage of completion is deemed to be the construction
and related overhead costs incurred to the balance sheet date divided by the expected construction and
related overhead costs of the project. The percentage of sales is deemed to be the floor area sold at the
balance sheet date divided by the floor area in the project offered for sale. Profit is taken up on the basis of
the total expected profit of the area sold multiplied by the percentage of completion, less profit if any, taken
up in previous financial periods. The expected profit is assessed having regard to the sale proceeds less
attributable total costs including the cost of land, construction and interest and after making due allowance
for known potential cost over-runs and allowance for contingencies.

Revenue on development represents the proportion of sales proceeds of the actual floor area sold to the
balance sheet date based on the percentage of completion.

Progress payments received from purchasers of properties under development are shown as a deduction
from the cost of the property under development.

2.12 Borrowing Costs

Borrowing costs are generally expensed as incurred. However, borrowing costs that are directly attributable to
acquisition and construction are capitalised as part of the cost of fixed assets or property under development.
Capitalisation of borrowing costs commences when activities to prepare the fixed assets and property under
development are in progress until the fixed asset is ready for its intended use or completion of development.
Borrowing costs capitalised in property under development are after netting off interest income earned from
progress billings received and placed on fixed deposits.

2.13 Intangible Assets

Intangible assets acquired separately are capitalised at cost. Intangible assets from a business acquisition are
capitalised at fair value as at the date of acquisition. After initial recognition, an intangible asset is carried at
cost less any accumulated amortisation and any accumulated impairment loss.

The useful lives of these intangible assets are assessed to be finite. Amortisation charged on finite intangible
assets is taken to the profit statement as amortisation expense.

Fraser and Neave, Limited & Subsidiary Companies Annual Report 2006 99
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 September 2006

2. ACCOUNTING POLICIES (cont’d)

2.13 Intangible Assets (cont’d)

Internally generated goodwill and internally generated intangible asset arising from research are not
capitalised and the expenditure is charged to the profit statement when it is incurred. Internally generated
intangible asset arising from development is capitalised only when its future recoverability can reasonably be
regarded as assured.

Intangible assets are tested for impairment annually or more frequently if events or changes in circumstances
indicate that the carrying value might be impaired. Useful lives are also examined on an annual basis and
adjustments, where applicable, are made on a prospective basis.

a) Deferred publishing development costs are amortised in accordance with their estimated economic
useful lives, upon completion of published products as follows:

Curriculum General Reference

1st year 33% 50% 33%

2nd year 33% 30% 27%
3rd year 34% 20% 20%
4th year – – 13%
5th year – – 7%

At each balance sheet date, the Group assesses whether there is any indication of impairment. If any
such indication exists, the recoverable amount is estimated.

b) Goodwill on acquisition is identified as being the excess of the cost of acquisition over the Group’s
share of net fair value of the identifiable assets, liabilities and contingent liabilities acquired as at the
date of acquisition. Where the cost of acquisition is lower than the Group’s share of net fair value
of the identifiable assets, liabilities and contingent liabilities acquired, the difference is recognised as
negative goodwill. Negative goodwill is recognised immediately in profit statement.

Positive goodwill is carried at cost less any accumulated impairment loss. Goodwill is subjected to
impairment test annually or more frequently if events or changes in circumstances indicate that the
carrying value might be impaired.

Positive goodwill acquired is allocated to the cash-generating units (“CGU”) expected to benefit
from the acquisition synergies. An impairment loss is recognised in the income statement when the
carrying amount of the CGU, including the goodwill, exceeds the recoverable amount of the CGU. The
recoverable amount is the higher of the CGU’s fair value less costs to sell and its value in use.

The total impairment loss is allocated first to reduce the carrying amount of goodwill allocated to the
CGU and then to the other assets of the CGU pro-rata on the basis of the carrying amount of each
asset in the CGU.

Impairment loss on goodwill is not reversed in a subsequent period.

100 Fraser and Neave, Limited & Subsidiary Companies Annual Report 2006
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 September 2006

2. ACCOUNTING POLICIES (cont’d)

2.14 Brands
Brands with finite lives are stated at cost less accumulated amortisation and accumulated impairment
losses. Amortisation is calculated to write off their cost over their estimated useful lives of up to 15 years on
a straight line method.

Internally generated brands are not capitalised and the expenditure is charged against profit in the year in
which the expenditure is incurred.

2.15 Properties Held For Sale

Properties developed for sale, when completed, are transferred to current assets as properties held for sale.

Properties held for sale are stated at the lower of cost and net realisable value. Provision is made when it is
anticipated that the net realisable value has fallen below cost. Cost includes cost of land and construction, and
interest incurred during the period of construction.

2.16 Inventories
All inventories including containers (comprising returnable bottles, cases and pallets) are stated at the lower
of cost and net realisable value. The net realisable value is the estimated selling price in the ordinary course of
business, less the cost of completion and selling expenses.

Cost in respect of raw materials, consumable stores and goods purchased for resale is stated based on
first-in-first-out, weighted average or standard cost (which approximates average actual cost). Cost in respect
of manufactured inventories and work-in-progress includes attributable production overheads. Engineering
and other inventories are valued on the weighted average cost basis less appropriate allowances for
obsolete items.

Soft drink container inventories comprise both containers on hand and those estimated to be in the market
at deposit values. Cost is amortised to deposit value over a period up to the container’s expected useful life
of 36 months for returnable bottles and 96 months for plastic crates.

Beer containers comprise returnable bottles and crates. Returnable bottles are valued at repurchase price/
deposit value (including freight where significant; and the difference between the original cost and repurchase
price/deposit value is written off over a period not exceeding 5 years) and crates are amortised over a period
not exceeding 8 years; alternatively these assets are valued at net realisable value, if lower. Abnormally large
purchases of bottle are accounted for by writing off, based on the estimated lifespan, a portion of the costs
in excess of repurchase prices.

2.17 Trade and Other Debtors

Trade and other debtors including receivable from related parties are classified and accounted for as loans
and receivables under FRS 39. They are recognised initially at fair value and subsequently measured at
amortised cost using the effective interest method, less allowance for impairment. An allowance for impairment
of trade debtors is established when there is evidence that the Group will not be able to collect all amounts
due according to the original terms of the receivables. The amount of the allowance is recognised in the profit
statement. Bad debts are written off as incurred.

Fraser and Neave, Limited & Subsidiary Companies Annual Report 2006 101
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 September 2006

2. ACCOUNTING POLICIES (cont’d)

2.18 Cash and Cash Equivalents

Cash and cash equivalents include cash on hand and in bank, deposits with financial institutions and bank
overdrafts. Bank overdrafts are included in bank borrowings on the balance sheet.

Cash on hand and in banks and fixed deposits are classified and accounted for as loans and receivables under
FRS 39. The accounting policy is stated in Note 2.26.

2.19 Trade and Other Creditors

Trade and other creditors, including payables to related parties, are initially measured at fair value and
subsequently measured at amortised cost using the effective interest method.

2.20 Employee Benefits

(a) Retirement Benefits

Provision for retirement benefits is made in accordance with:

(i) the terms of agreements concluded by group companies with various categories of employees;

(ii) pension and retirement benefit schemes; or

(iii) defined contribution plans under statutory regulations in the country, where applicable.

Retirement benefits in accordance with agreements

The provisions represent the present value of the amounts likely to become payable in respect of
services already rendered. An independent actuarial calculation of the provision is made every three
years. Internal calculation of the provision is made each intervening year on the same basis as those
used for the independent actuarial calculation.

Pension and retirement benefit schemes

Certain companies within the Group operate pension and retirement benefit schemes. The
cost of retirement benefits is determined by using accrued or projected benefit valuation methods
as appropriate. Costs are charged to the profit statement systematically relating to the receipt of
the employees’ services. Actuarial gains and losses are recognised as income or expenses when the
cumulative unrecognised actuarial gains or losses for each plan exceeds the greater of 10% of present
value of the obligation and 10% of the fair value of plan assets. These gains or losses are recognised
over the average remaining working lives of the employees participating in the plans.

Defined contribution plans under statutory regulations

As required by the law in certain countries, companies within the Group make contribution to the
state pension scheme. The companies pay fixed contributions into separate entities and will have no
legal or constructive obligation to pay further contributions if any of the funds do not hold sufficient
assets to pay all employee benefits relating to employee services in the current and preceding financial
years. Contributions to state pension schemes are recognised as compensation expense in the profit
statement in the same period as the employment that gives rise to the contribution.

102 Fraser and Neave, Limited & Subsidiary Companies Annual Report 2006
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 September 2006

2. ACCOUNTING POLICIES (cont’d)

2.20 Employee Benefits (cont’d)

(b) Share Options

The Company and certain listed subsidiary companies have in place Executives’ Share Option Scheme
for the granting of options to eligible executives of the Group to subscribe for shares or to acquire
shares in the companies under the respective schemes.

(i) Equity-settled transactions

The fair value of the employee services received in exchange for the grant of the options
is recognised as an expense in the profit statement with a corresponding increase in the
employee share option reserve over the vesting period. The total amount to be recognised
over the vesting period is determined by reference to the fair value of the options on the date
of grant. Non-market vesting conditions are included in assumptions about the number of
options that are expected to become exercisable on vesting date. At each balance sheet
date, the entity revises its estimates of the number of options that are expected to become
exercisable on vesting date. It recognises the impact of the revision of original estimates, if
any, in the profit statement, and a corresponding adjustment to equity over the remaining
vesting period.

The proceeds received net of any directly attributable transaction costs and the
corresponding share option reserve are credited to share capital when the options are
exercised.

(ii) Cash-settled transactions

The cost of phantom share options granted is measured initially at fair value at the grant
date taking into account the terms and conditions upon which the options were granted.
Until the liability is settled, it is remeasured at each reporting date and the fair value is
expensed over the period till vesting with recognition of a corresponding liability.

(c) Accrued Annual Leave

Employee entitlements to annual leave are recognised when they accrue to employees. A
provision is made for the estimated liability for employee entitlements to annual leave as a result
of services rendered by employees up to the balance sheet date.

2.21 Functional and Foreign Currencies

(a) Functional Currency

The currency of the primary economic environment in which the Company operates
(“the functional currency”) is Singapore Dollars. The consolidated financial statements are
presented in Singapore Dollars, which is the Company’s functional and presentation currency.

Fraser and Neave, Limited & Subsidiary Companies Annual Report 2006 103
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 September 2006

2. ACCOUNTING POLICIES (cont’d)

2.21 Functional and Foreign Currencies (cont’d)

(b) Foreign Currency Transactions

Foreign currency transactions are recorded in the functional currencies of the Company and the
respective subsidiary companies at rates of exchange approximating those ruling at transaction date.
Foreign currency monetary assets and liabilities at the balance sheet date are translated at the rates
ruling at that date. Exchange differences are dealt with in the profit statement except where exchange
differences arise on foreign currency monetary items that in substance form part of the Group’s
net investment in the foreign entity. These exchange differences are taken to exchange reserve as
a separate component of the shareholders’ funds until the disposal of the net investment at which
time they are recognised in the profit statement. Non-monetary items that are measured in terms of
historical cost in a foreign currency are translated using the exchange rates as at the dates of initial
transactions. Non-monetary items measured at fair value in a foreign currency are translated using
exchange rates at the date when the fair value was determined.

Currency translation differences on non-monetary items, such as equity investments held at fair
value through profit or loss, are reported as part of the fair value gain or loss. Currency translation
differences on non-monetary items, such as equity investments classified as available-for-sale financial
assets, are included in the fair value reserve within equity.

Currency translation differences arising from events which are treated as exceptional are dealt with
as exceptional items in the profit statement.

(c) Foreign Currency Translations

On consolidation of subsidiary companies, proportionate consolidation for joint venture companies
and equity accounting for associated companies, profit statement items are translated into
presentation currency at average exchange rates ruling during the year and assets and liabilities are
translated into presentation currency at exchange rates ruling at the balance sheet date. Exchange
differences arising from translation of foreign subsidiary companies, joint venture companies and
associated companies are taken directly to exchange reserve as a separate component of the
shareholders’ funds.

Goodwill and fair value adjustments arising on the acquisition of a foreign entity on or after
1 October 2005 are treated as assets and liabilities of the foreign entity and translated at the
closing rate. For acquisitions prior to 1 October 2005, the exchange rates at the dates of acquisition
were used.

On disposal of a foreign operation, the cumulative amount of exchange differences deferred in equity
relating to that foreign operation is recognised in the profit statement as a component of the gain or
loss on disposal.

104 Fraser and Neave, Limited & Subsidiary Companies Annual Report 2006
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 September 2006

2. ACCOUNTING POLICIES (cont’d)

2.22 Exceptional Items

Exceptional items are items of income and expense of such size, nature or incidence that their disclosure is
relevant to explain the performance of the Company and Group for the year.

2.23 Government Grants

Approved government grants for the development of multimedia products are taken up in profit statement
based on actual qualifying expenditure incurred.

2.24 Leases

(a) As Lessee
A finance lease which effectively transfer to the Group substantially all the risks and benefits
incidental to ownership of the leased item is capitalised at the lower of the fair value of the leased
item and the present value of the minimum lease payments at the inception of the lease term and
disclosed as fixed asset. Lease payments are apportioned between the finance charges and reduction
of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability.
Finance charges are charged directly to the profit statement. Contingent rents, if any, are expensed in
the periods in which they are incurred.

A lease where the lessor effectively retains substantially all the risks and benefits of ownership of the
leased item, is classified as an operating lease. Operating lease payments are recognised as an expense
in the profit statement on a straight line basis over the lease term.

(b) As Lessor
A lease whereby the lessor effectively retains substantially all the risks and benefits of ownership of the
leased item, is classified as an operating lease. Assets leased out under operating leases are included in
investment properties and are stated at revalued amounts and not depreciated. Rental income (net of
any incentives given to lessees) is recognised on a straight line basis over the lease term. Contingents
rents, if any, are recorded as income in the periods in which they are earned.

2.25 Impairment of Non-Financial Assets

The carrying amounts of the Group’s assets are reviewed at each reporting date or when annual impairment
testing is required, to determine whether there is any indication of impairment. If such indication exists, the
asset’s recoverable amount is estimated. An asset’s recoverable amount is the higher of an asset’s fair value
less costs to sell and its value in use. An impairment loss is recognised whenever the carrying amount of an
asset exceeds its recoverable amount. The impairment loss is charged to the profit statement unless it reverses
a previous revaluation in which case it will be charged to equity.

Reversal of impairment losses previously recognised is recorded when the decrease in impairment loss can be
objectively related to an event occurring after the write down. Such reversal is taken to the profit statement
unless the asset is carried at revalued amount in which case, such reversal is treated as a revaluation increase.
However, the increased carrying amount is only recognised to the extent it does not exceed what the carrying
amount, net of depreciation, that would have been had the impairment loss not been recognised. Impairment
loss on goodwill is not reversed in a subsequent period.

Fraser and Neave, Limited & Subsidiary Companies Annual Report 2006 105
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 September 2006

2. ACCOUNTING POLICIES (cont’d)

2.26 Investments in Financial Assets

(a) Classification
The classification of financial assets is determined at initial recognition and re-evaluate at every
reporting date, with the exception that the designation of financial assets at fair value through profit or
loss is irrevocable. The Group classifies its investments in financial assets in the following categories:

(i) Financial assets at fair value through profit or loss

This category has two sub-categories: financial assets held for trading, and those designated
at fair value through profit or loss at inception. A financial asset is classified in this category
if acquired principally for the purpose of selling in the short term or if so designated by
management. Derivatives are also categorised as held for trading unless they are designated
as hedges.

(ii) Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments
that are not quoted in an active market. They arise when the Group provides money, goods or
services directly to a debtor with no intention of trading the receivables. Loans and receivables
are included in trade and other debtors on the balance sheet.

(iii) Held-to-maturity investments

Held-to-maturity investments are non-derivative financial assets with fixed or determinable
payments and fixed maturities that the Group has the intention and ability to hold to maturity.
The Group’s held-to-maturity investments include investments in corporate bonds.

(iv) Available-for-sale financial assets

Available-for-sale financial assets are non-derivatives that are either designated in this category
or not classified in any of the other categories. They are included in non-current assets unless
there is intention to dispose of the assets within 12 months after the balance sheet date.

(b) Recognition and Derecognition

Purchases and sales of investments are recognised on trade-date, the date on which the Group commits
to purchase or sell the asset. Investments are derecognised when the rights to receive cash flows from
the financial assets have expired or have transferred substantially all risks and rewards of ownership.
On derecognition of a financial asset in its entirety, the difference between the carrying amount and
the sum of the consideration received and any cumulative gain or loss recognised directly in equity is
recognised in the profit statement.

106 Fraser and Neave, Limited & Subsidiary Companies Annual Report 2006
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 September 2006

2. ACCOUNTING POLICIES (cont’d)

2.26 Investments in Financial Assets (cont’d)

(c) Initial Measurement

Financial assets are initially recognised at fair value plus transaction costs except for financial assets
at fair value through profit or loss, which are recognised at fair value.

(d) Subsequent Measurement

Available-for-sale financial assets and financial assets at fair value through profit or loss are
subsequently carried at fair value. Loans and receivables and held-to-maturity investments are
carried at amortised cost using the effective interest method.

Realised and unrealised gains and losses arising from changes in the fair value of the financial assets
at fair value through profit or loss are included in the profit statement in the period in which they arise.
Unrealised gains and losses arising from changes in the fair value of available-for-sale financial assets
are recognised in the fair value reserve within equity. When available-for-sale financial assets are sold or
impaired, the accumulated fair value adjustments in the fair value reserve within equity will be released
through the profit statement.

(e) Determinaton of Fair Value

The fair value of quoted financial assets are based on current bid prices. The unquoted investment that
do not have quoted market prices in an active market nor methods of reasonably estimating the fair
value, are carried at cost.

(f) Impairment

(i) Assets carried at amortised cost

If there is objective evidence that an impairment loss on loans and receivables or held-to-maturity
investments carried at amortised cost has been incurred, the amount of the loss is measured
as the difference between the asset’s carrying amount and the present value of the estimated
future cash flows discounted at the financial asset’s original effective interest rate. The carrying
amount of the asset is reduced through the use of an allowance account and the amount of the
loss is recognised in the profit statement.

(ii) Assets carried at cost

If there is objective evidence that an impairment loss on an unquoted equity instrument that is
not carried at fair value because its fair value cannot be reliably measured, the amount of the
loss is measured as the difference between the asset’s carrying amount and the present value
of the estimated future cash flows discounted at the current market rate of return for a similar
financial asset. Such impairment losses are not reversed in subsequent periods.

Fraser and Neave, Limited & Subsidiary Companies Annual Report 2006 107
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 September 2006

2. ACCOUNTING POLICIES (cont’d)

2.26 Investments in Financial Assets (cont’d)

(f) Impairment (cont’d)

(iii) Available-for-sale financial assets

The Group assesses at each balance sheet date whether there is objective evidence that a
financial asset or a group of financial assets is impaired. In the case of equity investments
classified as available for sale, a significant or prolonged decline in the fair value of
the investment below its cost is considered in determining whether the investments are
impaired. If any such evidence exists for available-for-sale financial assets, the cumulative
loss, measured as the difference between the acquisition cost and the current fair value, less
any impairment loss on that financial asset previously recognised in the profit statement is
removed from the fair value reserve within equity and recognised in the profit statement.
Impairment losses recognised in the profit statement on equity investments are not reversed
through the profit statement, until the equity investments are disposed of.

2.27 Derivative Financial Instruments

The Group uses derivative financial instruments to hedge against risks associated with foreign currency and
interest rate fluctuations. Foreign exchange forward contracts are used to hedge its risks associated primarily
with foreign currency fluctuations. Interest rate swap contracts are used to hedge its risks associated with
interest rate fluctuations. It is the Group’s policy not to trade in derivative financial instruments.

Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are
subsequently re-measured at their fair value. The changes in fair value of any derivative instruments that do
not qualify for hedge accounting are recognised immediately in the profit statement.

The fair value of forward foreign currency contracts is calculated by reference to current forward foreign
exchange rates for contracts with similar maturity profiles. The fair value of interest rate swap contracts is
determined by reference to market values for similar instruments.

2.28 Significant Accounting Estimates and Judgements

Estimate and assumptions concerning the future are made in the preparation of the financial statements.
They affect the application of the Group’s accounting policies, reported amounts of assets, liabilities, income
and expenses, and disclosures made. They are assessed on an ongoing basis and are based on experience
and relevant factors, including expectations of future events that are believed to be reasonable under
the circumstances.

108 Fraser and Neave, Limited & Subsidiary Companies Annual Report 2006
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 September 2006

2. ACCOUNTING POLICIES (cont’d)

2.28 Significant Accounting Estimates and Judgements (cont’d)

(a) Key Sources of Estimation Uncertainty

The key assumptions concerning the future and other key sources of estimation uncertainty at the
balance sheet date, that have a significant risk of causing a material adjustment to the carrying amounts
of assets and liabilities within the next financial year are discussed below.

(i) Impairment of goodwill and brands

The Group determines whether goodwill and brands are impaired at least on an annual basis.
This requires an estimation of the value in use of the cash-generating units to which the goodwill
and brand are allocated. Estimating the value in use requires the Group to make an estimate
of the expected future cash flows from the cash-generating unit and also to choose a suitable
discount rate in order to calculate the present value of those cash flows. The carrying amount of
the goodwill and brands at balance sheet date is disclosed in Note 19, Note 20 and Note 23.

(ii) Income taxes

The Group has exposure to income taxes in numerous jurisdictions. Significant judgement
is involved in determining the provision for income taxes. There are certain transactions and
computations for which the ultimate tax determination is uncertain during the ordinary course
of business. The Group recognises liabilities for expected tax issues based on estimates of
whether additional taxes will be due. Where the final tax outcome of these matters is different
from the amounts that were initially recognised, such differences will impact the income tax and
deferred tax provisions in the period in which such determination is made. The carrying amount
of taxation and deferred taxation at balance sheet date is disclosed in the balance sheet.

(iii) Revenue recognition

The Group recognises contract revenue based on the percentage of completion method. The
stage of completion is measured in accordance with the accounting policy stated in Note 2.11.
Significant assumption is required in determining the percentage of completion, the extent
of the contract cost incurred, the estimated total contract revenue and contract cost and the
recoverability of the contracts. In making the assumption, the Group relies on past experience
and the work of specialists.

(iv) Depreciation of fixed assets

Fixed assets are depreciated on a straight-line basis over their estimated useful lives.
Management estimates the useful lives of these fixed assets to be within 3 to 99 years. Changes
in the expected level of usage and technological developments could impact the economic
useful lives and the residual values of these assets, therefore future depreciation charges could
be revised.

Fraser and Neave, Limited & Subsidiary Companies Annual Report 2006 109
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 September 2006

2. ACCOUNTING POLICIES (cont’d)

2.28 Significant Accounting Estimates and Judgements (cont’d)

(b) Critical Judgements made in Applying Accounting Policies

Management is of the opinion that the instances of application of judgement are not expected to
have a significant effect on the amounts recognised in the financial statements, apart from those
involving estimates.

3. REVENUE

(a) Sale of Goods

Sale of goods represents the invoiced value of goods delivered and services rendered (including excise but
excluding container deposits, trade discounts, and Goods and Services Tax) and rental income. Revenue on
properties developed for sale represents the proportion of sales proceeds of the actual floor area sold based
on the percentage of completion method. The revenue of associated companies and intra-group transactions
are excluded.

(b) Other Revenue

Other revenue represents service fee, management fee and technical fee income.

110 Fraser and Neave, Limited & Subsidiary Companies Annual Report 2006
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 September 2006

4. PROFIT BEFORE TAXATION AND EXCEPTIONAL ITEMS

THE GROUP THE COMPANY

2006 2005 2006 2005
($’000) ($’000) ($’000) ($’000)

(Restated) (Restated)
Profit before taxation and exceptional items
have been arrived at after charging:
Depreciation of fixed assets 112,071 108,592 – –
Depreciation of investment properties 4,788 2,229 – –
Impairment of fixed assets 2,885 361 – –
Impairment of properties under development 12,830 – – –
Amortisation of properties under development 2,889 105 – –
Amortisation of brands 661 1,658 169 1,167
Amortisation of intangibles 4,901 4,329 – –
Intangible assets written off – 1,870 – –
Provision for/(Write back of) doubtful trade debts
and bad debts 3,122 (77) – –
Provision for inventory obsolescence 9,223 11,176 – –
Provision for employee benefits 3,456 2,705 – –
Directors of the Company:
Fee 1,080 641 803 436
Remuneration of members of Board committees 241 204 241 204
Remuneration of executive directors 4,985 5,057 – –
Central Provident Fund contribution for
executive directors 15 19 – –
Consultancy fees 1,243 – – –
Retirement gratuity of an executive director – 3,000 – –
Ex-gratia payment of an executive director 1,000 – – –
Share-based payments 1,566 921 – –
Key executive officers:
Remuneration 4,785 3,886 – –
Provident Fund contribution 136 143 – –
Share-based payments 712 312 – –
Staff costs (exclude directors and key executives) 315,021 296,910 – –
Defined contribution plans (exclude directors and
key executives) 18,810 21,691 – –
Share-based payments (exclude directors and
key executives) 7,884 2,972 1,698 930
Auditors’ remuneration:
Auditor of the company 1,218 1,086 158 158
Other auditors 2,399 2,124 2 –
Professional fees paid to:
Auditor of the company 161 116 – 7
Other auditors 543 600 – –
Interest expense (see details) 83,663 61,043 39,192 20,494
Exchange loss 4,845 13 177 –
Loss on disposal of fixed assets 1,891 902 – –
Provision for foreseeable losses on properties
held for sale 7,753 16,517 – –
Fair value loss on financial instruments 1,136 – 814 –
and crediting:
Interest income (see details) 23,312 20,104 1,547 605
Exchange gain – 7,093 – 72
Write back of provision for employee benefits 262 804 – –
Reversal of impairment charge of fixed assets 1,320 234 – –
Fair value gains on financial instruments 180 – – –

Fraser and Neave, Limited & Subsidiary Companies Annual Report 2006 111
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 September 2006

4. PROFIT BEFORE TAXATION AND EXCEPTIONAL ITEMS (cont’d)

THE GROUP THE COMPANY

2006 2005 2006 2005
($’000) ($’000) ($’000) ($’000)

(Restated)
Details of Net Interest Expense:
Interest income
Subsidiary companies – – 1,433 329
Bank and other deposits 11,922 12,927 114 276
Interest rate swap contracts 9,753 5,496 – –
Others 1,637 1,681 – –
23,312 20,104 1,547 605
Interest expense
Subsidiary companies – – (1,221) (334)
Bank and other deposits (81,772) (59,872) (36,455) (24,930)
Interest rate swap contracts 68 (726) (1,516) 4,770
Others (1,959) (445) – –
(83,663) (61,043) (39,192) (20,494)

(60,351) (40,939) (37,645) (19,889)

5. SEGMENT INFORMATION
The Group’s operating businesses are organised and managed separately according to the nature of activities.
During the year, following the listing of Frasers Centrepoint Trust, a Real Estate Investment Trust (“REIT”) on SGX-ST,
the principal activities of the Group have been expanded to include investment in and management of REIT. The
Group’s operating business segments are namely soft drinks, dairies, breweries, printing and publishing, glass
containers, investment property, development property, REIT and others. The Group operates in seven main
geographical areas, namely Singapore, Malaysia, Rest of South East Asia, North East Asia, South Asia, South
Pacific, and Europe and USA. Geographical segment revenue are based on geographical location of the Group’s
customers.

Geographical segment assets are based on geographical location of the Group’s assets. Segment accounting
policies are the same as the policies described in Note 2, inter-segment sales are based on terms determined on
a commercial basis.

112 Fraser and Neave, Limited & Subsidiary Companies Annual Report 2006
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 September 2006

5. SEGMENT INFORMATION (cont’d)

Year ended 30 September 2006

The following table presents financial information regarding business segments:
Printing & Glass Investment Development
Soft Drinks Dairies Breweries Publishing Containers Property Property REIT Others Elimination Group
Business Segment ($’000) ($’000) ($’000) ($’000) ($’000) ($’000) ($’000) ($’000) ($’000) ($’000) ($’000)

Revenue – external 419,677 415,383 983,868 490,699 117,176 202,767 1,127,480 17,392 21,117 – 3,795,559
Revenue – inter-segment – 33 – 252 19,896 2,174 – – 81,373 (103,728) –
Total revenue 419,677 415,416 983,868 490,951 137,072 204,941 1,127,480 17,392 102,490 (103,728) 3,795,559

Subsidiary companies 43,384 13,374 135,592 13,382 11,482 122,956 222,074 10,515 2,430 – 575,189
Joint venture and
associated companies – 4,105 19,939 8,994 – (7,278) 2,630 – – – 28,390
PBIT * 43,384 17,479 155,531 22,376 11,482 115,678 224,704 10,515 2,430 – 603,579

Interest income 23,312

Interest expense (83,663)
Profit before taxation
and exceptional items 543,228
Exceptional items 34,016
Profit before taxation 577,244
Taxation (145,216)
Profit after taxation 432,028
Minority interest, net of taxes (112,503)
Attributable profit 319,525

Assets 260,315 290,465 922,210 779,357 182,463 2,289,412 2,611,919 942,039 534,541 – 8,812,721
Tax assets 24,208
Bank deposits & cash balances 834,891
Total assets 9,671,820

Liabilities 126,958 87,980 195,399 122,780 27,747 65,525 301,511 19,282 (7,555) – 939,627
Tax liabilities 304,338
Borrowings 3,823,277
Total liabilities 5,067,242

Other segment information:

Capital expenditure 14,279 10,251 43,369 32,933 24,610 53,261 21 – 4,714 – 183,438
Depreciation & amortisation 14,280 13,079 34,924 33,768 16,443 3,647 6,057 4 3,108 – 125,310
Impairment losses 277 1,685 216 707 – – – – – – 2,885
Reversal of impairment losses (667) (139) (514) – – – – – – – (1,320)
Attributable profit before
exceptional items 17,318 5,624 58,036 15,865 4,570 77,561 146,195 3,227 (32,982) – 295,414
Exceptional items 712 (715) (1,396) 8,320 – – 8,647 – 8,543 – 24,111
Attributable profit 18,030 4,909 56,640 24,185 4,570 77,561 154,842 3,227 (24,439) – 319,525

The following table presents financial information regarding geographical segments:

Rest of South North South South Europe
Singapore Malaysia East Asia East Asia Asia Pacific & USA Group
Geographical Segment ($’000) ($’000) ($’000) ($’000) ($’000) ($’000) ($’000) ($’000)

Total revenue 1,479,671 792,889 408,498 434,499 10,390 451,135 218,477 3,795,559
PBIT * 244,410 87,001 106,035 70,489 (816) 60,296 36,164 603,579
Other geographical information:
Assets 5,115,133 593,609 673,790 1,206,160 12,721 836,930 374,378 8,812,721
Capital expenditure 80,290 28,985 42,207 20,359 451 9,471 1,675 183,438

* PBIT = Profit before interest, taxation and exceptional items

Rest of South East Asia: Myanmar, Thailand, Cambodia and Vietnam
North East Asia: China, Taiwan, Japan, Korea and Mongolia
South Asia: India and Sri Lanka
South Pacific: Australia and New Zealand

Fraser and Neave, Limited & Subsidiary Companies Annual Report 2006 113
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 September 2006

5 SEGMENT INFORMATION (cont’d)

Year ended 30 September 2005 (Restated)

The following table presents financial information regarding business segments:
Printing & Glass Investment Development
Soft Drinks Dairies Breweries Publishing Containers Property Property Others Elimination Group
Business Segment ($’000) ($’000) ($’000) ($’000) ($’000) ($’000) ($’000) ($’000) ($’000) ($’000)

Revenue – external 439,878 406,334 919,340 480,561 105,118 190,933 923,757 22,073 – 3,487,994
Revenue – inter-segment 5 49 – 328 17,491 2,480 – 80,657 (101,010) –
Total revenue 439,883 406,383 919,340 480,889 122,609 193,413 923,757 102,730 (101,010) 3,487,994

Subsidiary companies 50,598 13,264 110,908 28,952 6,417 113,934 139,556 14,820 – 478,449
Joint venture and
associated companies – 3,484 21,890 6,562 – (1,828) 16,032 – – 46,140
PBIT * 50,598 16,748 132,798 35,514 6,417 112,106 155,588 14,820 – 524,589

Interest income 20,104

Interest expense (61,043)
Profit before taxation
and exceptional items 483,650
Exceptional items 29,304
Profit before taxation 512,954
Taxation (137,354)
Profit after taxation 375,600
Minority interest, net of taxes (79,947)
Attributable profit 295,653

Assets 261,022 311,284 785,426 732,055 185,042 2,282,015 2,892,567 182,122 – 7,631,533
Tax assets 9,675
Bank deposits & cash balances 577,367
Total assets 8,218,575

Liabilities 103,774 72,045 178,683 128,100 21,449 94,787 272,871 35,687 – 907,396
Tax liabilities 238,287
Borrowings 3,354,997
Total liabilities 4,500,680
Other segment information:

Capital expenditure 16,117 8,955 65,568 116,540 7,531 2,436 – 2,479 – 219,626
Depreciation & amortisation 14,283 15,687 33,273 28,626 18,018 3,422 18 3,586 – 116,913
Impairment losses 230 44 87 – – – – – – 361
Reversal of impairment losses (176) (10) (48) – – – – – – (234)
Attributable profit before
exceptional items 21,447 3,709 50,247 25,436 2,206 80,778 103,856 (16,711) – 270,968
Exceptional items (681) (787) (388) 5,631 – 1,433 2,543 16,934 – 24,685
Attributable profit 20,766 2,922 49,859 31,067 2,206 82,211 106,399 223 – 295,653

The following table presents financial information regarding geographical segments:

Rest of South North South South Europe
Singapore Malaysia East Asia East Asia Asia Pacific & USA Group
Geographical Segment ($’000) ($’000) ($’000) ($’000) ($’000) ($’000) ($’000) ($’000)
Total revenue 1,414,364 801,995 358,575 348,249 1,203 417,856 145,752 3,487,994
PBIT * 212,166 89,574 83,875 59,922 311 59,587 19,154 524,589
Other geographical information:
Assets 4,291,658 640,415 409,202 1,228,402 3,686 635,888 422,282 7,631,533
Capital expenditure 50,500 42,384 28,765 44,890 – 47,894 5,193 219,626

* PBIT = Profit before interest, taxation and exceptional items

Rest of South East Asia: Myanmar, Thailand, Cambodia and Vietnam
North East Asia: China, Taiwan, Japan, Korea and Mongolia
South Asia: India and Sri Lanka
South Pacific: Australia and New Zealand

114 Fraser and Neave, Limited & Subsidiary Companies Annual Report 2006
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 September 2006

THE GROUP THE COMPANY

2006 2005 2006 2005
($’000) ($’000) ($’000) ($’000)

(Restated) (Restated)
6. GROSS DIVIDENDS FROM SUBSIDIARY
AND JOINT VENTURE COMPANIES
Quoted subsidiary companies 40,003 39,317
Quoted joint venture companies 4,623 4,283
Unquoted subsidiary companies 116,349 101,655

160,975 145,255

7. GROSS INCOME FROM INVESTMENTS

Quoted equity investments in companies 4,445 1,726 319 948
Quoted non-equity investments in companies 2,056 2,056 – –
Unquoted equity investments in companies 2,047 1,269 354 255
Unquoted non-equity investments in companies 3,480 2,412 – 417

12,028 7,463 673 1,620

8. EXCEPTIONAL ITEMS
Gain on disposal of portfolio investments 967 11,457 – 10,005
Gain on change in interest in subsidiary and
associated companies 7,615 19,017 – –
Gain on disposal of properties 16,483 455 – –
Write back of impairment on properties 14,922 – – –
Reorganisation cost of business operations (4,536) (256) – –
Share of exceptional items of joint venture and
associated companies 55 1,659 – –
Provision for professional fees (442) (3,028) – –
Donation to APB Foundation (1,048) – – –

34,016 29,304 – 10,005

Fraser and Neave, Limited & Subsidiary Companies Annual Report 2006 115
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 September 2006

9. TAXATION

THE GROUP THE COMPANY

2006 2005 2006 2005
($’000) ($’000) ($’000) ($’000)

(Restated)
Based on profit for the year:
Singapore tax 55,719 59,044 28,561 18,232
Overseas tax 97,069 56,570 173 9,961
Deferred tax (7,637) 9,488 – –

145,151 125,102 28,734 28,193

(Over)/Under provision in preceding years
– Current income tax (2,495) 6,164 1,069 1,000
– Deferred tax (5,205) (2,929) – –
Share of taxation of joint venture companies 2,795 4,423 – –
Share of taxation of associated companies 4,970 4,594 – –

145,216 137,354 29,803 29,193

A reconciliation of the statutory tax rate to the Company’s and Group’s effective tax rate applicable to profit for the
year is as follows:

THE GROUP THE COMPANY

2006 2005 2006 2005
% % % %

(Restated) (Restated)
Singapore statutory rate 20.0 20.0 20.0 20.0
Effect of different tax rate of other countries 5.7 4.8 2.7 2.1
Effect of tax losses of subsidiary not available
for set-off against profits of other companies
within the group 1.2 1.8 – –
Income not subject to tax (tax incentive/exemption) (3.4) (3.1) (5.4) (4.7)
Expenses not deductible for tax purposes 4.9 3.6 6.5 3.5
Utilisation of previously unrecognised tax losses
in determining taxable profit (1.4) (0.5) – –
(Over)/Under provision in prior years (1.1) 0.5 0.9 0.7
Other reconciliation items (0.7) (0.3) 0.5 0.3

25.2 26.8 25.2 21.9

116 Fraser and Neave, Limited & Subsidiary Companies Annual Report 2006
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 September 2006

9. TAXATION (cont’d)
As at 30 September 2006, certain Singapore subsidiary companies have unutilised tax losses of
approximately $77,133,000 (2005: $73,501,000), unutilised investment allowances of approximately $7,657,000
(2005: $213,000) and unabsorbed capital allowances of $13,374,000 (2005: $1,021,000) available for set off
against future profits. In addition, certain overseas subsidiary companies have unutilised tax losses carried forward of
approximately $162,619,000 (2005: $166,058,000), unutilised investment allowances of approximately $25,749,000
(2005: $28,236,000) and unabsorbed capital allowances of $17,615,000 (2005: $19,785,000). The availability of
these losses and capital allowances to set off against future profits is subject to the meeting of certain statutory
requirements by those subsidiary companies in their countries of tax residence. The deferred tax benefits of these
losses recognised in the financial statements are disclosed in Note 32.

For the year of assessment (“YA”) 2006, certain subsidiaries have transferred loss items of $54,268,000
(YA 2005: $10,360,000) to offset against the taxable income of other companies in the Group. Tax benefits of
$nil (YA 2005: $360,000) were recognised on the tax losses utilised under the group relief systems. Tax benefits of
$10,854,000 (YA 2005: $1,931,000) arising from the utilisation of group relief are not recognised as they are subject
to compliance with the relevant tax legislation governing group relief and agreement of the Inland Revenue Authority
of Singapore.

10. DIVIDENDS

THE GROUP &

THE COMPANY
2006 2005
($’000) ($’000)

Interim paid of 4 cents per share after deducting Singapore tax at 20%
(2005: 4 cents per share after deducting Singapore tax at 20%) 46,788 46,520

Final proposed of 8 cents per share comprising 5 cents after deducting

Singapore tax at 20% and 3 cents 1-tier tax exempt
(2005: 7 cents per share after deducting Singapore tax at 20%) 93,835 81,676

140,623 128,196

The final dividend is proposed by the directors after the balance sheet date and subject to the approval of shareholders
at the next annual general meeting of the Company.

The dividends per share is based on a sub-divided share (shareholders have at the Extraordinary General Meeting of
the Company held on 31 May 2006 approved the sub-division of 1 share into 5 shares).

Fraser and Neave, Limited & Subsidiary Companies Annual Report 2006 117
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 September 2006

11. EARNINGS PER SHARE

(a) Basic Earnings Per Share

Basic earnings per share is computed by dividing the Group attributable profit to shareholders of the
Company by the weighted average number of ordinary shares in issue during the year.

THE GROUP
2006 2005
($’000) ($’000)

(Restated)
Group attributable profit to shareholders of the Company
– before exceptional items 295,414 270,968
– after exceptional items 319,525 295,653

— No. of shares —
Weighted average number of ordinary shares in issue 1,169,795,825 1,163,188,954

Earnings Per Share (Basic)

– before exceptional items 25.3 cts 23.3 cts
– after exceptional items 27.3 cts 25.4 cts

(b) Diluted Earnings Per Share

Diluted earnings per share is computed by dividing the Group adjusted attributable profit to shareholders of
the Company by the adjusted weighted average number of ordinary shares in issue during the year.

For diluted earnings per share, the Group attributable profit to shareholders of the Company is adjusted for
changes in subsidiary companies attributable profit resulting from exercise of all dilutive share options. The
reconciliation of the Group adjusted attributable profit to shareholders of the Company used to compute
diluted earnings per share is as follows:

THE GROUP
2006 2005
($’000) ($’000)

(Restated)
Group attributable profit to shareholders
of the Company before exceptional items 295,414 270,968
Change in attributable profit due to dilutive
share options of subsidiary companies (767) (606)

Group adjusted attributable profit to shareholders

of the Company before exceptional items 294,647 270,362

Group attributable profit to shareholders

of the Company after exceptional items 319,525 295,653
Change in attributable profit due to dilutive
share options of subsidiary companies (774) (598)

Group adjusted attributable profit to shareholders

of the Company after exceptional items 318,751 295,055

118 Fraser and Neave, Limited & Subsidiary Companies Annual Report 2006
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 September 2006

11. EARNINGS PER SHARE (cont’d)

(b) Diluted Earnings Per Share (cont’d)

The weighted average number of ordinary shares is adjusted to assume exercise of all dilutive share options of
the Company. The reconciliation of the weighted average number of ordinary shares used to compute diluted
earnings per share is as follows:
— No. of shares —
Weighted average number of ordinary shares used to
compute the basic earnings per share 1,169,795,825 1,163,188,954
Effect of dilutive share options 7,315,510 6,599,275

Weighted average number of ordinary shares used to

compute diluted earnings per share 1,177,111,335 1,169,788,229

Earnings Per Share (Fully diluted)

– before exceptional items 25.0 cts 23.1 cts
– after exceptional items 27.1 cts 25.2 cts

10,968,000 (2005: nil) share options granted to employees under share option plans have not been included
in the computation of diluted earnings per share because these options were anti-dilutive for the current
financial year.

(c) The calculation of earnings per share is based on a sub-divided share (shareholders have at the Extraordinary
General Meeting of the Company held on 31 May 2006 approved the sub-division of 1 share into 5 shares).

12. SHARE CAPITAL AND RESERVES

THE GROUP & THE COMPANY

2006 2005
No. of shares ($’000) No. of shares ($’000)

SHARE CAPITAL
Ordinary shares issued and fully paid up
Balance at beginning of year 233,359,335 233,359 232,007,722 232,008

Issued during the year following exercise of

Executives’ Share Options 3,598,030 8,865 1,351,613 1,351

Subdivision of share 935,985,720 – – –

Transfer of share premium and capital

redemption reserve to share capital – 158,747 – –

Balance at end of year 1,172,943,085 400,971 233,359,335 233,359

The holders of ordinary shares are entitled to receive dividends as and when declared by the Company. All ordinary
shares carry one vote per share without restriction.

Fraser and Neave, Limited & Subsidiary Companies Annual Report 2006 119
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 September 2006

12. SHARE CAPITAL AND RESERVES (cont’d)

The Companies (Amendment) Act 2005 came into effect on 30 January 2006 and the concepts of “par value” and
“authorised capital” were abolished. On that date, the shares of the Company ceased to have a par value. In
addition, the amount standing in the share premium reserve and capital redemption reserve had become part of
the Company’s share capital.

Pursuant to the approval given by the shareholders at an Extraordinary General Meeting of the Company held on
31 May 2006, each ordinary share was sub-divided into 5 ordinary shares on 4 July 2006.

During the year, the consideration received following the exercise of Executives’ Share Options was $12,161,000
(2005: $9,976,000).

THE GROUP THE COMPANY

2006 2005 2006 2005
($’000) ($’000) ($’000) ($’000)

(Restated) (Restated)
RESERVES

The reserves comprise the following:

Share Premium – 152,223 – 152,223
Capital Redemption Reserve – 3,228 – 3,228
Capital Reserve 849,306 527,012 1,039,274 1,039,274
Fair Value Adjustment Reserve 56,607 – 71 –
Employee Share Option Reserve 9,947 5,410 8,484 4,592
Revenue Reserve 2,262,638 2,086,764 1,179,656 1,230,143
Dividend Reserve 93,835 81,676 93,835 81,676
Exchange Reserve (72,824) 6,967 – –

Total reserves 3,199,509 2,863,280 2,321,320 2,511,136

Based on prevailing legislation and income tax rates of 20% and 28% for Singapore and Malaysia respectively,
the Company has sufficient tax credits to pay up to $67,043,000 (2005: $195,704,000) as Singapore tax franked
dividend and $65,615,000 (2005: $38,961,000) as Malaysian tax franked dividend out of revenue reserve. The
Company did not exercise the option to move to the one tier corporate tax system in Singapore during the
financial year.

Capital reserve of the Company comprises mainly surplus from revaluation of investments. The capital reserve of the
Group comprises statutory reserve and asset revaluation reserve of subsidiary companies.

Fair value adjustment reserve comprises the cumulative fair value changes of available-for-sale financial assets until
they are derecognised or impaired.

Employee share option reserve represents the equity-settled share options granted to employees and is made up of
the cumulative value of services received from employees recorded on grant of equity-settled share options.

Exchange reserve comprises the exchange differences arising from the translation of the financial statements of
foreign operations whose functional currencies are different from that of the Group’s presentation currency.

During the year, $140,000 (2005: $55,000) of revenue reserve was transferred to capital reserve by certain subsidiary
companies as required by local legislation. The reserve comprises realised profits and can only be distributed with
approval from their respective local authorities.

120 Fraser and Neave, Limited & Subsidiary Companies Annual Report 2006
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 September 2006

13. GROUP FIXED ASSETS

Capital
Freehold Leasehold Plant & Work-in Other
Land Land Building Machinery -Progress Assets Total
($’000) ($’000) ($’000) ($’000) ($’000) ($’000) ($’000)

For the year ended 30 September 2006

At cost/valuation
Balance at beginning of year 74,430 70,723 377,242 1,217,883 43,257 312,450 2,095,985
Currency realignment (3,318) (3,179) (15,949) (56,942) (1,935) (10,702) (92,025)
Additions 4,183 4,323 2,486 25,358 54,517 27,181 118,048
Acquisition of subsidiary company/
business assets 2,111 4,038 1,347 6,725 1,449 1,777 17,447
Acquisition of joint venture companies 1,659 4,357 11,156 43,052 1,442 5,073 66,739
Disposals (729) – (3,286) (14,887) – (23,298) (42,200)
Disposal of subsidiary companies – – – – – (361) (361)
Reclassification (6) – 6,854 19,028 (30,629) 4,753 –
Transfer (to)/from current assets – – – (107) (1,247) 4,839 3,485
Transfer to properties under
development (17,232) – – – – – (17,232)

Balance at end of year 61,098 80,262 379,850 1,240,110 66,854 321,712 2,149,886

Analysis of cost/valuation
At cost 35,965 57,718 343,723 1,231,208 66,854 321,712 2,057,180
At directors’ valuation 1976 – – – 2,636 – – 2,636
At directors’ valuation 1983 – – 1,327 – – – 1,327
At directors’ valuation 1988 – – 2,532 6,266 – – 8,798
At directors’ valuation 1996 25,133 22,544 32,268 – – – 79,945

61,098 80,262 379,850 1,240,110 66,854 321,712 2,149,886

Accumulated depreciation and impairment

Balance at beginning of year 66 16,407 106,253 603,955 – 211,447 938,128
Currency realignment (2) (872) (4,056) (28,610) – (6,988) (40,528)
Depreciation charge for the year – 1,771 9,898 72,037 14 28,351 112,071
Impairment charge for the year – – – 2,527 – 358 2,885
Impairment reversal for the year (5) – (177) (698) – (440) (1,320)
Acquisition of subsidiary company/
business assets 964 1,001 166 4,518 175 1,083 7,907
Acquisition of joint venture companies – 3,999 4,972 27,396 182 3,657 40,206
Disposal of subsidiary companies – – – – – (207) (207)
Disposals – – (2,332) (10,539) – (20,258) (33,129)
Reclassification – – (100) 790 – 2,664 3,354

Balance at end of year 1,023 22,306 114,624 671,376 371 219,667 1,029,367

Net book value 60,075 57,956 265,226 568,734 66,483 102,045 1,120,519

Fraser and Neave, Limited & Subsidiary Companies Annual Report 2006 121
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 September 2006

13. GROUP FIXED ASSETS (cont’d)

Capital
Freehold Leasehold Plant & Work-in Other
Land Land Building Machinery -Progress Assets Total
($’000) ($’000) ($’000) ($’000) ($’000) ($’000) ($’000)

For the year ended 30 September 2005 (Restated)

At cost/valuation
Balance at beginning of year 64,304 68,186 354,579 1,085,739 35,373 295,694 1,903,875
Currency realignment 746 582 3,167 14,016 322 2,617 21,450
Additions – 1,754 2,575 116,993 58,824 27,142 207,288
Acquisition of subsidiary companies 9,009 370 10,338 2,762 – 6,355 28,834
Disposals (118) (169) (3,102) (36,830) – (25,712) (65,931)
Reclassification 386 – 8,768 35,203 (50,331) 6,358 384
Transfer to current assets – – – – (931) (4) (935)
Transfer from investment properties 103 – 917 – – – 1,020

Balance at end of year 74,430 70,723 377,242 1,217,883 43,257 312,450 2,095,985

Analysis of cost/valuation
At cost 50,431 50,493 345,776 1,208,701 43,257 312,450 2,011,108
At directors’ valuation 1976 – – – 2,745 – – 2,745
At directors’ valuation 1983 – – 1,385 – – – 1,385
At directors’ valuation 1988 – – 2,542 6,437 – – 8,979
At directors’ valuation 1996 23,999 20,230 27,539 – – – 71,768

74,430 70,723 377,242 1,217,883 43,257 312,450 2,095,985

Accumulated depreciation and impairment

Balance at beginning of year 45 14,631 97,468 560,713 – 200,034 872,891
Currency realignment – 129 892 7,027 – 2,155 10,203
Depreciation charge for the year – 1,595 9,394 69,996 – 27,607 108,592
Impairment charge for the year – – – 73 – 288 361
Impairment reversal for the year (364) – (2,264) (14) – (174) (2,816)
Acquisition of subsidiary companies – 79 1,903 2,004 – 4,776 8,762
Disposals – (27) (1,810) (35,578) – (23,235) (60,650)
Reclassification 385 – 267 (266) – – 386
Transfer to current assets – – – – – (4) (4)
Transfer from investment properties – – 403 – – – 403

Balance at end of year 66 16,407 106,253 603,955 – 211,447 938,128

Net book value 74,364 54,316 270,989 613,928 43,257 101,003 1,157,857

122 Fraser and Neave, Limited & Subsidiary Companies Annual Report 2006
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 September 2006

13. GROUP FIXED ASSETS (cont’d)

(a) The valuations for 1976, 1983, 1988 and 1996 were made by the directors of the respective subsidiary
companies and were based on appraisals by independent valuers.

(b) Other assets comprise motor vehicle and forklift, postmix and vending machine, beer cooler, fixture and
fitting and computer equipment.

(c) If the fixed assets stated at revaluation had been included in the financial statements at cost less depreciation,
the net book value would have been as follows :

Capital
Freehold Leasehold Plant & Work-in Other
Land Land Building Machinery -Progress Assets Total
($’000) ($’000) ($’000) ($’000) ($’000) ($’000) ($’000)

At 30 September 2006 23,737 8,573 16,359 6,885 – – 55,554

At 30 September 2005 18,360 7,014 10,298 60 – – 35,732

(d) Additions in the consolidated financial statements include $1,571,000 (2005: $2,413,000) of other
assets acquired under finance leases. The carrying amount of other assets held under finance leases at 30
September 2006 amounted to $4,380,000 (2005: $3,502,000).

(e) The net book value of fixed assets pledged to financial institutions as security for the borrowings are as
follows:

2006 2005
($’000) ($’000)

Plant & Machinery 47,667 56,790

Building 7,024 7,603

Fraser and Neave, Limited & Subsidiary Companies Annual Report 2006 123
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 September 2006

14. GROUP INVESTMENT PROPERTIES

Freehold Leasehold
Land Land Building Total
($’000) ($’000) ($’000) ($’000)

At cost/valuation
Balance at beginning of year 617,067 858,997 844,043 2,320,107
Currency realignment (1,582) (3,418) (7,785) (12,785)
Additions – 36,500 13,485 49,985
Disposals (1,388) – (10,232) (11,620)
Revaluation surplus 44,042 269,630 34,350 348,022
Transfer from properties under development – 7,925 26,753 34,678
Transfer to properties held for sale (309) – (1,636) (1,945)

Balance at end of year 657,830 1,169,634 898,978 2,726,442

Analysis of cost/valuation
At cost – 3,725 47,484 51,209
At directors’ valuation 2005 – 55,548 53,285 108,833
At directors’ valuation 2006 657,830 1,110,361 798,209 2,566,400

657,830 1,169,634 898,978 2,726,442

Accumulated depreciation and impairment

Balance at beginning of year – 669 13,901 14,570
Currency realignment – (71) (861) (932)
Depreciation charge for the year – 1,545 3,243 4,788

Balance at end of year – 2,143 16,283 18,426

Net book value

At 30 September 2006 657,830 1,167,491 882,695 2,708,016

At 30 September 2005 617,067 858,328 830,142 2,305,537

Investment properties of the Group stated at 2006 valuation made by the directors are based on open market
valuation at 30 September 2006 carried out by independent professional valuers, namely, DTZ Debenham
Tie Leung (Singapore), BEM Property Consultants (Australia), CB Richard Ellis (Hong Kong) and Jones Lang LaSalle
(Singapore). The investment properties of the Group are situated in Singapore, Hong Kong, Australia, China and
Vietnam.

The valuations for the investment properties were based on a combination of the Direct Comparison Method,
Income Approach and Discounted Cash Flow Analysis.

124 Fraser and Neave, Limited & Subsidiary Companies Annual Report 2006
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 September 2006

15. GROUP PROPERTIES UNDER DEVELOPMENT

THE GROUP
2006 2005
($’000) ($’000)

(Restated)
Balance at beginning of year 2,018,336 1,855,902
Expenditure incurred during the year 1,107,364 852,708
Acquisition of subsidiary companies – 122,196

3,125,700 2,830,806
Development profit 203,023 129,789
Progress payments received and receivable (716,345) (737,838)
Amortisation charge (2,889) (105)
Write back of provision for impairment in value of development (net) 1,983 –
Transfer to properties held for sale (84,268) (215,364)
Transfer to properties held for investment (34,678) –
Transfer from fixed assets 17,232 –
Currency realignment (26,445) 11,048

Balance at end of year 2,483,313 2,018,336

Group properties under development comprise:

Freehold land
At cost 911,984 761,276
At directors’ valuation 1996 99,000 99,000
Leasehold land
At cost 737,551 405,575
Development expenditure 1,116,364 903,960
Interest cost 102,078 89,030
Currency realignment (20,360) 13,575
Property tax 17,943 12,680

2,964,560 2,285,096
Development profit 298,338 109,620
Progress payments received and receivable (722,731) (320,291)
Accumulated amortisation (4,008) (1,259)
Provision for foreseeable losses (52,846) (54,830)

2,483,313 2,018,336

Interest capitalised during the year was $49,577,000 (2005: $47,984,000). A capitalisation rate of 5.54%
(2005: 4.00%) per annum was used, representing the borrowing cost of the loans used to finance the projects.

Certain subsidiary companies have granted fixed and floating charge over their assets and undertaking to banks
as well as mortgage on their freehold and leasehold land. As at 30 September 2006, the bank loans drawn down
amounted to $426,726,000 (2005: $373,708,000).

Fraser and Neave, Limited & Subsidiary Companies Annual Report 2006 125
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 September 2006

15. GROUP PROPERTIES UNDER DEVELOPMENT (cont’d)

(a) The valuation for 1996 was made by the directors based on appraisals by independent professional valuers.

(b) Properties under development include:

Effective
Group Interest
%

Singapore
(i) The Azure – leasehold land (99-year tenure commencing 3 January 2005) of
approximately 10,926.5 sqm on Land Parcel C1⁄2 at Sentosa Cove on Lot 1391C
Mukim 34, Sentosa Island for the development of 116 condominium units of
19,675 sqm of gross floor area for sale. 100

(ii) Freehold land of approximately 5,227 sqm at MK 17 Lot 3309 situated at St Michael’s
Road for the development of approximately 131 condominium units of approximately
15,288 sqm of gross floor area for sale. 100

(iii) Freehold land of approximately 23,819.7 sqm situated at Holland Park, off Holland
Road, for the development of approximately 12 bungalow units of approximately
19,137 sqm of gross floor area for sale. 100

(iv) The Sensoria – Freehold land of approximately 6,196.5 sqm at Lot 994W MK 13 at
No. 1 Jalan Ulu Sembawang for the development of approximately 73 condominium
units of approximately 8,243 sqm of gross floor area for sale. 100

(v) Quintet – leasehold land (99-year tenure commencing 19 June 2003) of approximately
20,954.6 sqm at Lot 3254X MK 11 at Choa Chu Kang Street 36/46 for the
development of 459 executive condominium units of approximately 61,804 sqm of
gross floor area for sale. 100

(vi) 8 @ Mount Sophia – 103-year leasehold land of approximately 16,170.2 sqm title
commencing from the date of issuance of subsidiary strata certificate of title on
Lots 361, 593V, 594 and 183N of Town Subdivision 19 at Mount Sophia for the
development of 277 condominium units of 33,971 sqm of gross floor area for sale. 100

(vii) Tangerine Grove – freehold land of approximately 10,236.1 sqm at Lots 1595T and
1596A Mukim 23 at 1 Paya Lebar Crescent for the development of 125 condominium
units of 14,336 sqm of gross floor area for sale. 100

(viii) The Raintree – leasehold land (99-year tenure commencing 1 March 2003) of
approximately 16,253.5 sqm at Mk16 Lot 2253P situated at Bukit Drive Road for the
development of 315 condominium units and 2 shop units of 38,011 sqm of gross
floor area for sale. 100

(ix) One Jervois – Freehold land of approximately 11,669 sqm at Lots 803V, 787V,
788P and on Town Subdivision 24 at Jervois Road/Close and Nos. 5, 5A, 6 and 6A
at Jervois Road for the development of approximately 275 condominium units of
approximately 32,673.2 sqm of gross floor area for sale. 100

126 Fraser and Neave, Limited & Subsidiary Companies Annual Report 2006
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 September 2006

15. GROUP PROPERTIES UNDER DEVELOPMENT (cont’d)

(b) Properties under development include (cont’d):

Effective
Group Interest
%

Singapore (cont’d)
(x) One Leicester – Freehold land of approximately 10,221.1 sqm at Lots 4840A, 5804W,
5805V, SL5806P, 6096M, SL6097W, 6163K, 6164N, 6165X, 6749V, 6750M, 97844P,
97845T and 97846A comprising Mukim 17 at Leicester Road/ Jalan Toa Payoh/
Woodsville Close for a residential development comprising approximately
194 condominium units of approximately 21,906.4 sqm of gross floor area for sale. 100

(xi) The Infiniti – Freehold land of approximately 23,018.6 sqm at Lot 3385K of Mukim 5 at
89 West Coast Park (Clementi Planning Area) for a residential development comprising
approximately 315 condominium units of approximately 36,829.8 sqm of gross floor
area for sale. 100

(xii) Freehold land of approximately 12,992 sqm at Lots 99709T and 112N TS 21 situated at
ST Thomas Walk for the development of approximately 176 condominium units of
approximately 36,376 sqm of gross floor area for sale. 100

(xiii) Leasehold land of approximately 20,062 sqm at Lot 1201K MK 3 situated at 50 West
Coast Road for the development of approximately 240 condominium units of
approximately 31,469 sqm of gross floor area for sale. 100

(xiv) Leasehold land (99-year tenure commencing 1 April 1990) of Lots 2569C-PT and
2348W-PT MK 19 at Yishun Central for the development of a commerical building
with five levels of retail space including a retail basement floor and a basement
carpark. 100

Malaysia
(xv) Fraser Park – freehold land of approximately 23,354 sqm at Jalan Yew, Kuala Lumpur,
Malaysia for the development of shop office of approximately 76,864 sqm of gross
floor area for sale. 59

(xvi) Freehold land of approximately 16,094 sqm at Jalan Yew, Kuala Lumpur, Malaysia for the
development of commerical buildings with retail space, city campus and hostel, hotels
and carparks. 59

(xvii) Freehold land of approximately 6,313 sqm at Jalan Ampang, Kuala Lumpur, Malaysia
for a proposed development of service apartments and office suites. 59

Vietnam
(xviii) Leasehold land (35-year tenure commencing 3 April 1995) of approximately
2,160 sqm at No. 3 Nguyen Sieu Street, Ho Chi Minh City, Vietnam for the development
of approximately 106 residential units of approximately 11,845 sqm of gross floor
area for sale. 70

Fraser and Neave, Limited & Subsidiary Companies Annual Report 2006 127
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 September 2006

15. GROUP PROPERTIES UNDER DEVELOPMENT (cont’d)

(b) Properties under development include (cont’d):

Effective
Group Interest
%

Australia
(xix) Freehold land of approximately 3,966 sqm situated at the junction of George Street,
Bathurst Street and Kent Street, Sydney, Australia for the development of a retail
podium of 8,922 sqm, a block of approximately 456 residential units and a block of
approximately 145 serviced apartment units of a total of approximately 62,000 sqm
of gross floor area for sale. 81

(xx) Freehold land of approximately 193 hectares situated at Wanjeep Street, Mandurah,
Western Australia for a proposed development of approximately 1,250 landed housing
units for sale. 56

(xxi) Freehold land of approximately 1.19 hectares situated at Riverside, East Perth, Australia
for a proposed mixed development comprising approximately 285 private apartment
units,140 serviced suites and commerical space. 88

(xxii) Freehold land of approximately 4,022 sqm situated at 25-29 Lorne Avenue, Killara,
Sydney, Australia for a proposed development of approximately 40 apartments for sale. 75

(xxiii) Freehold land of approximately 4.92 hectares situated at Morton Strett, Parramatta,
Sydney, Australia for a proposed development of approximately 534 apartments
for sale. 75

(xxiv) Freehold land of approximately 0.74 hectares situated in Camperdown’s City Quarter,
Sydney, Australia for a proposed development of approximately 421 apartments
for sale. 88

China
(xxv) Jingan Four Seasons – Leasehold land (70-year tenure commencing 7 November 2001)
of approximately 13,843 sqm situated at No. 169 Wujiang Road, Shanghai, China for
a mixed development comprising 4 blocks of approximately 419 apartment units and
a retail podium of a total of approximately 69,494 sqm of gross floor area for sale. 95

(xxvi) Leasehold land (40/50-year tenure commencing 15 June 2005) of approximately

7,111 sqm situated in Xi Cheng District, Xin Jie Kou, Beijing, China for a retail mall
development of a total of approximately 20,317 sqm of gross floor area for sale. 95

(xxvii) Leasehold land (50-year tenure commencing 22 August 1999) of approximately

633,153 sqm situated at Teng Qiao He Chu Hai Kou, Hainan, China for a low density
resort and tourist development of a total of approximately 316,668 sqm of gross floor
area for sale. 100

128 Fraser and Neave, Limited & Subsidiary Companies Annual Report 2006
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 September 2006

15. GROUP PROPERTIES UNDER DEVELOPMENT (cont’d)

(b) Properties under development include (cont’d):

Effective
Group Interest
%

China (cont’d)
(xxviii) Leasehold land (50-year tenure commencing 21 April 1999) of approximately
338,577.6 sqm at Lots Nos. T205-0021, T205-0050 and T205-0030 situated at High
and New Technological Industrial Park South Zone, Shenzhen, Guangdong, China
for the development of a composite development with a total gross floor area of
536,480 sqm. 52

(xxix) Leasehold land (70-year tenure commencing 6 December 2003) of approximately

711,101 sqm located near the future Light Rapid Transit station at Si Chen Road
in Song Jiang district, Shanghai, China for the exclusive residential development
comprising three phases yielding 4,928 residential units with communal club
facilities and a small commercial quantum of a total of 837,291 sqm of gross floor
area for sale. 72

New Zealand
(xxx) Freehold land of approximately 6,831 sqm in Queenstown, South Island, New Zealand for
a proposed development of 15 luxury residential apartments of approximately 5,200 sqm
of gross floor area for sale. Approval from the relevant authorities is being sought to
double the number of apartments. 75

(xxxi) Freehold land of approximately 27 hectares located in Tauranga in the Bay of Plenty,
New Zealand for a proposed development of approximately 741 houses and a beach
front condominium complex for sale. 68

United Kingdom
(xxxii) Freehold land of approximately 4 hectares on the south bank of River Thames, London,
United Kingdom for a proposed residential and commercial development of 211 residential
units and ancillary office and retail space of a total of approximately 31,839 sqm of gross
floor area for sale. 50

(xxxiii) Freehold land of approximately 2,346 sqm situated at 63-69 Rochester Row, 68 Vincent
Square, London, United Kingdom for a proposed development of 70 residential units of
approximately 6,197 sqm of gross floor area for sale. 50

Thailand
(xxxiv) 49% proportionate share of a freehold land of approximately 40,608 sqm situated at
Rama III Road, Bangkok, Thailand known as The Pano for the development of 397
condominium units of approximately 61,868 sqm of gross floor area for sale. 49

Fraser and Neave, Limited & Subsidiary Companies Annual Report 2006 129
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 September 2006

16. SUBSIDIARY COMPANIES

THE COMPANY
2006 2005
($’000) ($’000)

(Restated)
Quoted shares at cost 260,215 262,981
Unquoted shares at cost 3,403,226 3,787,684

3,663,441 4,050,665
Amounts owing by subsidiary companies (unsecured) 292,701 41,130
Amounts owing to subsidiary companies (unsecured) (726,508) (794,935)

3,229,634 3,296,860

MARKET VALUE
Quoted shares 549,641 527,089

The Company’s investments in subsidiary companies include an interest in 58.67% (2005: 59.37%) of the issued
ordinary shares of Fraser & Neave Holdings Bhd. This interest will be reduced to 55.75% by 31 December 2006 by
the operation of an Executives’ Share Option Scheme.

The amounts owing by subsidiary companies are due on loan account, not repayable within the next 12 months and
are interest-free except for an amount of $3,154,000 (2005: $3,361,000) which bears interest at an average rate of
7.10% (2005: 5.34%) per annum and an amount of $242,299,000 (2005: $nil) which bears interest at an average
rate of 3.48% (2005: nil%) per annum.

The amounts owing from and to subsidiary companies disclosed under current assets and current liabilities are
unsecured, non-trade in nature, no fixed repayment term and interest-free.

(a) During the financial year, the Group incorporated the following subsidiary companies:

Country of Equity
incorporation and interest held Date of
Name of Company place of business % incorporation

Frasers Centrepoint Asset Management Ltd Singapore 100.0 27 January 2006

FCL Investments Pte Ltd Singapore 100.0 2 May 2006
FCL Trust Holdings Pte Ltd Singapore 100.0 2 May 2006
Frasers Highbury Limited United Kingdom 75.0 25 November 2005
Frasers Town Hall Residences Pty Ltd Australia 80.5 5 April 2006
Frasers Morton Pty Ltd Australia 75.0 6 April 2006
Frasers City Quarter Pty Ltd Australia 87.5 6 April 2006
Frasers Queens Pty Ltd Australia 87.5 21 April 2006
Frasers Killara Pty Ltd Australia 75.0 8 August 2006

130 Fraser and Neave, Limited & Subsidiary Companies Annual Report 2006
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 September 2006

16. SUBSIDIARY COMPANIES (cont’d)

(b) During the financial year, the Group acquired the following subsidiary company and businesses:

(i) Soft drinks

On 12 April 2006, the Group’s subsidiary company, Fraser & Neave Holdings Bhd, acquired a 95%
shareholding interest in Borneo Springs Sdn Bhd (formerly known as Sime Oleander Sdn Bhd), a
company incorporated in Malaysia for cash consideration of RM16,108,000.

(ii) Printing and Publishing

On 1 March 2006, the Group’s subsidiary company, Times Publishing Limited, acquired the publishing
businesses of educational books and reference materials in Singapore, Malaysia and Hong Kong from
SNP Corporation Ltd for $37,525,000.

The fair value of the identifiable assets and liabilities of subsidiary company and businesses acquired as at the
date of acquisition are:

Fair value at Carrying value at

date of acquisition date of acquisition
($’000) ($’000)

Fixed assets 9,540 9,542

Other non-current assets 8,160 –
Current assets 24,812 21,420
Current liabilities (6,528) (6,831)
Non-current liabilities (284) (284)
Minority interests (489) –
Cash 4,715 4,715

Net asset value as at acquisition 39,926 28,562

Goodwill on acquisition, net 4,539

Consideration 44,465
Less: Cash of subsidiary company and businesses (4,715)

Cash flow on acquisition net of cash and

cash equivalents acquired 39,750

The attributable profit contribution by the acquired subsidiary company and businesses from the date of
acquisition was $2.2 million. If the acquisition had taken place from 1 October 2005, the Group’s revenue
would have been $3.8 billion and attributable profit would have been $320 million.

Fraser and Neave, Limited & Subsidiary Companies Annual Report 2006 131
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 September 2006

16. SUBSIDIARY COMPANIES (cont’d)

(c) Frasers Centrepoint Trust (“FCT”), a subsidiary of Frasers Centrepoint Limited was admitted to the Official
List of Singapore Exchange Securities Trading Limited (the “Listing”) on 5 July 2006. Prior to the Listing, the
following investment properties were transferred to HSBC Institutional Trust Services (Singapore) Limited, in its
capacity as trustee of FCT (the “Trustee”), pursuant to sale and purchase agreements made on the same date
between the respective companies and the Trustee:

1. Causeway Point from Woodlands Complex Pte Ltd

2. Northpoint from Yishun Development Pte Ltd
3. Anchorpoint from Anchor Developments Pte Ltd

In this connection, 313,500,000 units and 39,200,000 units were issued respectively to FCL Trust Holdings
Pte Ltd and FCL Investments Pte Ltd, both wholly-owned subsidiaries of the Group in part satisfaction of the
purchase price payable for the transfer of the above properties.

(d) During the financial year, the Group increased issued and paid-up capital of a subsidiary, FCL Loft Pte Ltd
(“FCL Loft”) through an ordinary resolution passed at a general meeting on 17 July 2006. FCL Loft increased
its issued and paid-up capital from $1 to $1,000,000 by the allotment of 999,999 ordinary shares in the
capital of FCL Loft to the Group for a consideration of $999,999 in cash.

Details of significant subsidiaries are included in Note 42.

132 Fraser and Neave, Limited & Subsidiary Companies Annual Report 2006
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 September 2006

17. JOINT VENTURE COMPANIES

THE COMPANY
2006 2005
($’000) ($’000)

(Restated)
(a) Unquoted investment, at cost 276,126 276,126
Quoted investment, at cost 132,007 36,614

408,133 312,740

Details of joint venture companies are included in Note 42.

(b) The following amounts represent the Group’s share of the revenue and expenses and assets and liabilities of
the joint venture companies and are included in the consolidated profit statement and balance sheet using
the line-by-line format of proportionate consolidation.

THE GROUP
2006 2005
($’000) ($’000)

(Restated)
(i) The Group’s share of the consolidated results of the joint venture companies for the year is as follows:

Revenue 954,761 894,680

Profit before taxation and exceptional items 132,870 117,164
Exceptional items (1,265) 2,872
Taxation (37,335) (37,286)
Minority interests (50,448) (40,636)

(ii) The Group’s share of the consolidated assets and liabilities of the joint venture companies
is as follows:

Non-current assets 742,690 630,783

Current assets 286,873 223,024
Current liabilities (375,504) (275,324)
Long term liabilities (31,181) (15,121)

622,878 563,362

Fraser and Neave, Limited & Subsidiary Companies Annual Report 2006 133
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 September 2006

17. JOINT VENTURE COMPANIES (cont’d)

(iii) The share of the results, assets and liabilities as stated in paragraphs (i) and (ii) above are based on
the accounts of the joint venture companies to 30 September 2006.

(iv) The amounts owing from/to joint venture companies classified under current assets and current
liabilities are unsecured, trade in nature and interest-free.

(v) The Group and the Company’s share of capital commitments of the joint venture companies is
$20,781,000 (2005: $48,527,000).

(vi) The Group and the Company’s share of contingent liabilities of the joint venture companies is
$2,772,000 (2005: $3,057,000).

Details of joint venture companies are included in Note 42.

(c) Joint Venture Company’s Investment in Joint Venture

Joint venture companies (“JVC”) that are held directly by the Group’s joint venture companies are equity
accounted for in accordance with the accounting policies of these joint venture companies. No adjustments
have been made at the Group to recognise the interests of these JVC using proportionate consolidation as the
contribution of these JVC to the Group are not material. Details of the Group’s investment in and share of the
consolidated results, assets and liabilities of the JVC are as follows:

THE GROUP
2006 2005
($’000) ($’000)

(Restated)
Investment in joint venture companies 88,990 75,992

Share of profit from joint venture companies 16,065 19,187

(i) The Group’s share of the consolidated results of the joint venture companies for the year is as
follows:

Revenue 206,787 183,821

Profit before taxation and exceptional items 16,065 19,187
Exceptional items 50 (102)
Taxation (2,795) (4,423)

(ii) The Group’s share of the consolidated assets and liabilities of the joint venture companies is as follows:

Non-current assets 77,443 69,378

Current assets 68,703 63,967
Current liabilities (41,869) (37,168)
Long term liabilities (26,129) (29,401)

78,148 66,776

134 Fraser and Neave, Limited & Subsidiary Companies Annual Report 2006
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 September 2006

18. ASSOCIATED COMPANIES

THE GROUP
2006 2005
($’000) ($’000)

(Restated)
Investments in associated companies, at cost 165,958 142,618
Acquisition of interests 53,202 18,776
Share of net post acquisition reserves 6,907 (781)

226,067 160,613
Loans owing from associated companies (unsecured) 69,831 71,188

295,898 231,801

(a) The loans owing from associated companies are interest-free, non-trade in nature and are not repayable
within one year.

(b) The amounts owing from/to associated companies classified under current assets and current liabilities are
unsecured, trade in nature and interest-free.

(c) The summarised financial statements of the associates are as follows:

Revenue 740,491 740,430

Profit before taxation and exceptional items 83,460 124,938
Exceptional items (1,069) (3,560)
Taxation (11,973) (15,326)

Non-current assets 1,311,966 1,532,499

Current assets 477,383 545,096
Current liabilities (414,433) (363,158)
Long term liabilities (526,510) (620,137)

848,406 1,094,300

(d) The share of the results, assets and liabilities as stated in paragraph (c) above are based on the accounts of the
associated companies to 30 September 2006.

(e) The Group’s share of capital commitments of the associated companies is $1,528,000 (2005: $nil).

(f) The Group’s share of contingent liabilities of the associated companies is $307,000 (2005: $325,000).

Details of associated companies are included in Note 42.

Fraser and Neave, Limited & Subsidiary Companies Annual Report 2006 135
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 September 2006

19. INTANGIBLE ASSETS

THE GROUP
Deferred Other
Development Intangible
Goodwill Franchise Costs Assets Total
($’000) ($’000) ($’000) ($’000) ($’000)

For the year ended 30 September 2006

At cost
Balance at beginning of year 85,966 219 31,886 10,536 128,607
Currency realignment (226) – (988) – (1,214)
Additional expenditure during the year 79,658 – 7,778 7,627 95,063
Acquisition of subsidiary companies and additional
interests in subsidiary companies 6,909 – – – 6,909
Acquisition of additional interests in joint venture
companies 76,282 – – – 76,282
Write off for the year (631) – (631) – (1,262)

Balance at end of year 247,958 219 38,045 18,163 304,385

Accumulated amortisation and impairment

Balance at beginning of year – 156 12,305 900 13,361
Currency realignment – – 319 – 319
Amortisation charge for the year – 22 3,260 1,619 4,901
Write off for the year – – (631) 3 (628)

Balance at end of year – 178 15,253 2,522 17,953

Net book value 247,958 41 22,792 15,641 286,432

For the year ended 30 September 2005 (Restated)

At cost
Balance at beginning of year 154,910 219 21,769 212 177,110
Currency realignment (114) – 275 – 161
Additional expenditure during the year – – 11,735 – 11,735
Acquisition of subsidiary companies and additional
interests in subsidiary companies 16,583 – 2,458 10,324 29,365
Reclassification to associated companies (75,023) – – – (75,023)
Write off for the year (1,715) – (4,351) (102) (6,168)
Reclassification (102) – – 102 –
Reclassification from accumulated amortisation (8,573) – – – (8,573)

Balance at end of year 85,966 219 31,886 10,536 128,607

Accumulated amortisation and impairment

Balance at beginning of year 10,526 134 11,166 5 21,831
Currency realignment (238) – 310 – 72
Amortisation charge for the year – 22 3,412 895 4,329
Write off for the year (1,715) – (2,583) – (4,298)
Reclassification to cost (8,573) – – – (8,573)

Balance at end of year – 156 12,305 900 13,361

Net book value 85,966 63 19,581 9,636 115,246

Except for Goodwill, all intangible assets have finite useful lives of not more than 20 years.

136 Fraser and Neave, Limited & Subsidiary Companies Annual Report 2006
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 September 2006

20. IMPAIRMENT TESTS FOR GOODWILL

The carrying value of the Group’s goodwill arising from acquisitions of subsidiary and joint venture companies were
assessed for impairment during the financial year.
Basis on which
As at recoverable Terminal Pre-tax
30 Sep 2006 values are growth Discount
($’000) determined rate rate

Carrying value of capitalised goodwill

based on cash generating units
Subsidiary companies:
Printing and Publishing Group 21,425 Value-in-use 0% 7.0% – 7.8%
Soft Drinks Group 17,642 Fair value less – –
costs to sell
39,067
Joint venture companies:
Breweries Group 208,891 Value-in-use 2% 8.6% – 16.8%
and
Fair value less
costs to sell
247,958

Basis on which
As at recoverable Terminal Pre-tax
30 Sep 2005 values are growth Discount
($’000) determined rate rate

(Restated)
Carrying value of capitalised goodwill
based on cash generating units
Subsidiary companies:
Printing and Publishing Group 13,338 Value-in-use 0% 7.0% – 7.4%
Dairies Group 631 Value-in-use 0% 7.1%
Soft Drinks Group 17,642 Fair value less – –
costs to sell
31,611
Joint venture companies:
Breweries Group 54,355 Value-in-use 2% 9.0% – 11.9%
85,966

Goodwill is allocated for impairment testing purposes to the individual entity which is also the cash generating unit.
The value-in-use calculations apply a discounted cash flow model using cash flow projections based on financial
budgets and forecasts approved by management covering 3 to 5 year periods. Cash flows beyond these periods are
extrapolated using the estimated growth rates stated in the table above. The fair value less costs to sell calculations
are based on quoted market prices obtained from active markets.

The terminal growth rate used does not exceed the long term average growth rate of the respective industry and
country in which the entity operates.

The discount rates applied to the cash flow projections are derived from the cost of capital plus a reasonable risk
premium at the date of assessment of the respective cash generating units.

No impairment loss was required for the financial years ended 30 September for the goodwill assessed as their
recoverable values were in excess of their carrying values.

Fraser and Neave, Limited & Subsidiary Companies Annual Report 2006 137
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 September 2006

21. OTHER INVESTMENTS

THE GROUP THE COMPANY

2006 2005 2006 2005
($’000) ($’000) ($’000) ($’000)

(Restated) (Restated)
Quoted
Quoted available-for-sale financial assets
Non-equity investments
At cost – 25,761 – –
At fair value 25,729 – – –

Equity investments
At cost – 16,753 – 6,039
At fair value 22,922 – 6,130 –

Quoted total 48,651 42,514 6,130 6,039

Unquoted
Unquoted available-for-sale financial assets
Non-equity investments
At cost 549 945 – –
At fair value 332 – – –

Equity investments
At cost 1,124 33,750 550 540

Unquoted held-to-maturity financial assets

Equity investments
At fair value 6,980 – – –

Provision for impairment

Balance at beginning of year (1,155) (1,155) – –
Additions (512) – – –
Balance at end of year (1,667) (1,155) – –

Unquoted total 7,318 33,540 550 540

Loan receivables 5,815 5,683 – –

Total 61,784 81,737 6,680 6,579

Market Value of Quoted Investments

Available-for-sale financial assets
Non-equity investments 25,729 25,450 – –
Equity investments 22,922 23,903 6,130 6,251

48,651 49,353 6,130 6,251

138 Fraser and Neave, Limited & Subsidiary Companies Annual Report 2006
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 September 2006

21. OTHER INVESTMENTS (cont’d)

(a) Other investments as at 30 September 2006 were reclassified into “Available-for-sale financial assets
(non-current)” and “Held-to-maturity financial assets” to conform to the presentation adopted in the year
ended 30 September 2006 in accordance with FRS 39. With the adoption of FRS 39, the Group states
available-for-sale investments at fair value except for unquoted equity investments. The difference between
the fair values and the carrying amounts of the investments which are stated at fair value at 1 October 2005
are taken to the opening balance of the fair value adjustment reserves at that date.

(b) The quoted non-equity investments carry interest rate of 8% (2005: 8%).

(c) The unquoted non-equity investments carry interest rates of 9.75% to 12.75% (2005: 8.5% to 14%).

(d) The unquoted investments do not have quoted market prices in an active market nor are there other methods
of reasonably estimating the fair values readily available. Hence it is not practicable to determine their fair
value with sufficient reliability without incurring excessive costs.

(e) Market value of quoted investments are determined by reference to stock exchange quoted prices.

22. CASH AND BANK DEPOSITS

THE GROUP THE COMPANY

2006 2005 2006 2005
($’000) ($’000) ($’000) ($’000)

(Restated)
Cash and bank balances 220,752 257,516 285 452
Bank fixed deposits 614,139 315,251 15,277 22,618

834,891 572,767 15,562 23,070

Secured bank fixed deposits – 4,600 – –

834,891 577,367 15,562 23,070

The weighted average effective interest rate for bank fixed deposits is 4.53% (2005: 2.86%).

Fraser and Neave, Limited & Subsidiary Companies Annual Report 2006 139
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 September 2006

22. CASH AND BANK DEPOSITS (cont’d)

Included in the Group’s cash and bank balances, and bank fixed deposits are amounts of $11,730,000
(2005: $2,233,000) and $106,400,000 (2005: $50,707,000) respectively held under the Project Account Rules
(1997 Ed), withdrawals from which are restricted to payments for development expenditure incurred on properties
developed for sale.

Included in secured fixed deposits is $nil (2005: $4,600,000) which served as collateral deposit for a $nil
(2005: $4,154,000 (RMB 20,000,000)) bank facility granted to a subsidiary company.

As at 30 September 2006, the composition of cash and bank deposits held in foreign currency by the Group is as
follows: Chinese Renminbi – 30.0% (2005: 21.0%), Malaysia Ringgit – 11.5% (2005: 19.5%) and US Dollars – 8.2%
(2005: 14.1%).

23. BRANDS

THE GROUP THE COMPANY

2006 2005 2006 2005
($’000) ($’000) ($’000) ($’000)

(Restated)
At cost
Balance at beginning of year 14,569 14,538 8,435 8,435
Currency realignment 27 31 – –
Acquisition of additional interests in
joint venture companies 82 – – –

Balance at end of year 14,678 14,569 8,435 8,435

Accumulated amortisation
Balance at beginning of year 10,854 9,182 8,266 7,099
Currency realignment 28 14 – –
Amortisation for the year 661 1,658 169 1,167
Acquisition of additional interests in
joint venture companies 35 – – –
Write off for the year 437 – – –

Balance at end of year 12,015 10,854 8,435 8,266

Net book value 2,663 3,715 – 169

140 Fraser and Neave, Limited & Subsidiary Companies Annual Report 2006
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 September 2006

24. PROPERTIES HELD FOR SALE

THE GROUP
2006 2005
($’000) ($’000)

(Restated)
At cost
Balance at beginning of year 467,029 443,070
Currency realignment (5,039) 1,500
Transfer from properties under development 94,691 215,364
Transfer from investment properties 1,945 563
Acquisition of subsidiary companies – 46,708
Cost adjustments (22,354) (229)
Sold during the year (335,450) (239,947)

Balance at end of year 200,822 467,029

Less: Provision for foreseeable losses

Balance at beginning of year 35,162 44,208
Acquisition of subsidiary companies – 700
Provision for the year 7,753 16,517
Transfer from properties under development 10,423 –
Sold during the year (30,909) (26,263)

Balance at end of year 22,429 35,162

Net book value 178,393 431,867

25. INVENTORIES

THE GROUP
2006 2005
(Restated)
At net At net
realisable realisable
At cost value Total At cost value Total
($’000) ($’000) ($’000) ($’000) ($’000) ($’000)

Containers 28,723 747 29,470 30,443 2,706 33,149

Raw materials 49,311 22,972 72,283 64,768 28,373 93,141
Manufactured inventories 95,915 20,533 116,448 95,810 16,168 111,978
Engineering spares, work-in-progress
and other inventories 66,817 18,534 85,351 67,359 7,048 74,407
Packaging materials 19,478 243 19,721 19,439 268 19,707
Goods purchased for resale 15,266 26,863 42,129 16,481 25,953 42,434

275,510 89,892 365,402 294,300 80,516 374,816

Write back of provision for inventory obsolescence during the year amounted to $4,692,000 (2005: $2,216,000).

Fraser and Neave, Limited & Subsidiary Companies Annual Report 2006 141
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 September 2006

26. TRADE AND OTHER DEBTORS

THE GROUP THE COMPANY

2006 2005 2006 2005
($’000) ($’000) ($’000) ($’000)

(Restated)
Trade debtors 481,774 585,233 – –

Other debtors:
Current
Accrued income 1,136 3,474 5 1,806
Prepayments 30,735 23,834 25 –
Deposits paid 248,122 102,952 1 1
Tax recoverable 18,979 17,040 125 –
Staff loans 6,825 7,909 – –
Amounts receivable from joint venture partners 6,949 2,314 – –
Derivative financial instruments (Note 27) 6,674 – 5,735 –
Advanced project cost paid 1,917 1,521 – –
Other receivables 69,451 63,843 62 1,137
390,788 222,887 5,953 2,944

872,562 808,120 5,953 2,944

Non-current
Prepayments 14,274 15,241 – –
Staff loans 3,263 3,873 – –
17,537 19,114 – –

890,099 827,234 5,953 2,944

(a) Trade debtors of the Group are stated after deducting provision for doubtful debts of $15,188,000
(2005: $15,284,000).

(b) Included in Trade debtors is an amount of $90,782,000 (2005: $210,443,000) which relates to the balance
of sale proceeds from completed condominium projects which will be received upon issuance of certificate of
statutory completion, notice of vacant possession, expiry of defect liability period and/or title subdivision.

(c) Included in Deposits paid is an amount of $115,387,000 (2005: $25,214,000) being payment for purchase
of land which will be transferred to properties under development upon the completion of sale and purchase
agreement.

(d) Included in Deposits paid is a payment of approximately $93,867,000 (2005: $68,472,000) for certain land in
China of which formal land use right certificates have not yet been obtained.

(e) As at 30 September 2006, the composition of Trade and Other debtors held in foreign currency by the Group
is as follows: Chinese Renminbi – 17.5% (2005: 12.1%), Malaysia Ringgit – 17.5% (2005: 21.1%) and
Australia Dollars – 6.7% (2005: 6.9%).

142 Fraser and Neave, Limited & Subsidiary Companies Annual Report 2006
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 September 2006

27. DERIVATIVE FINANCIAL INSTRUMENTS

THE GROUP THE COMPANY

2006 2005 2006 2005
($’000) ($’000) ($’000) ($’000)

Assets
Interest rate swap contracts 6,441 – 5,735 –
Forward currency contracts 233 – – –

6,674 – 5,735 –

Liabilities
Interest rate swap contracts 3,312 – 3,312 –
Forward currency contracts 453 – – –

3,765 – 3,312 –

Net position 2,909 – 2,423 –

28. SHORT TERM INVESTMENTS

THE GROUP THE COMPANY

2006 2005 2006 2005
($’000) ($’000) ($’000) ($’000)

(Restated)
Quoted
Quoted available-for-sale financial assets
Equity investments at fair value 145,077 132 – –
Non-equity investments at fair value 188 183 – –

145,265 315 – –

Unquoted
Unquoted available-for-sale financial assets
Non-equity investments at cost 2,697 2,251 – –
Non-equity investments at fair value 150,000 – – –

Unquoted financial assets at fair value

through profit statement

Non-equity investments at fair value 28,786 – 28,786 –

181,483 2,251 28,786 –

Total 326,748 2,566 28,786 –

Included in non-equity investments are notes with interest rates of 3.5% to 12.75% (2005: 8.5% to 14%) per
annum and maturing within the next 12 months.

Fraser and Neave, Limited & Subsidiary Companies Annual Report 2006 143
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 September 2006

29. TRADE AND OTHER CREDITORS

THE GROUP THE COMPANY

2006 2005 2006 2005
($’000) ($’000) ($’000) ($’000)

(Restated) (Restated)
Trade creditors 398,455 403,135 – –

Other creditors:
Current
Advances from joint venture partners 16,123 26,323 – –
Interest payable 30,215 20,983 7,830 4,217
Accrued operating expenses 118,693 110,384 1,404 320
Sundry accruals 56,209 51,351 6 68
Sundry deposits 58,027 47,642 – –
Staff costs payable 52,134 53,329 – –
Accrual for unconsumed leave 10,335 9,636 – –
Amounts due to minority shareholders
of subsidiary companies 59,296 42,783 – –
Deferred income 9,801 937 – –
Provisions 2,227 5,382 – –
Derivative financial instruments (Note 27) 3,765 – 3,312 –
Other payables 50,605 62,616 3,572 1,939

467,430 431,366 16,124 6,544

865,885 834,501 16,124 6,544

Non-current
Amounts due to minority shareholders
of subsidiary companies 14,937 14,420 – –

880,822 848,921 16,124 6,544

(a) Advances from joint venture partners are non-trade in nature, unsecured, interest-free and have no fixed
terms of repayment.

(b) As at 30 September 2006, the composition of Trade and Other creditors held in foreign currency by the Group
is as follows: Malaysia Ringgit –15.4% (2005: 17.7%), Chinese Renminbi – 11.3% (2005: 11.6%) and Sterling
Pound – 9.2% (2005: 6.1%).

144 Fraser and Neave, Limited & Subsidiary Companies Annual Report 2006
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 September 2006

30. BORROWINGS

Weighted
average effective THE GROUP THE COMPANY
interest rate 2006 2005 2006 2005
% Notes ($’000) ($’000) ($’000) ($’000)

(Restated)
Repayable within one year:
Unsecured
Bank loans 4.89 514,460 332,344 94,923 112,340
Bank overdrafts 12,017 3,051 – –
526,477 335,395 94,923 112,340
Term loans 3.08 280,000 500,000 – –

Secured
Bank loans 5.96 (b) 180,856 330,035 – –
Bank overdrafts (b) 56 1,871 – –
180,912 331,906 – –
Finance leases 1,155 872 – –

988,544 1,168,173 94,923 112,340

Repayable after one year:

Unsecured
Bank loans 5.00 168,692 179,832 – –
Term loans 3.67 1,688,339 1,500,000 949,167 800,000

Secured
Bank loans 4.39 (b) 974,807 504,400 – –
Finance leases 2,895 2,592 – –

(d) 2,834,733 2,186,824 949,167 800,000

Total 3,823,277 3,354,997 1,044,090 912,340

Fair value (c) 3,811,593 3,330,601 1,034,306 922,140

Notes

(a) Term loans comprise variable rate notes, medium term notes, fixed rate notes, transferable term loan and
floating rate bonds issued by the Company and subsidiary companies.
(b) The secured bank loans and overdrafts are secured by certain subsidiary companies by way of a charge over
fixed deposits, plant and machinery, pledge of shares of a subsidiary company, fixed and floating charge over
certain assets and mortgages on freehold and leasehold land under development.
A subsidiary company’s issue of 330,000 redeemable non-voting Class A Preference Shares of an aggregate
value of $330,000,000 (2005: $330,000,000) are classified as bank borrowings in the consolidated financial
statements of the Group.

Fraser and Neave, Limited & Subsidiary Companies Annual Report 2006 145
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 September 2006

30. BORROWINGS (cont’d)

(c) The carrying amount of bank borrowings and finance leases approximate fair value as they bear interest at
rates which approximate the current incremental borrowing rate for similar types of lending and borrowing
arrangements except for the term loans of an amount of $1,369,167,000 (2005: $795,108,000) bank loan
which has a fair value of $1,357,483,000 (2005: $777,039,000).

The aggregate fair value of term loans are determined by reference to market value.

(d) Maturity of non-current borrowings is as follows:

THE GROUP THE COMPANY

2006 2005 2006 2005
($’000) ($’000) ($’000) ($’000)

(Restated)
Between 1 and 2 years 1,064,658 645,124 300,000 300,000
Between 2 and 5 years 1,568,899 1,514,172 499,167 500,000
After 5 years 201,176 27,528 150,000 –

2,834,733 2,186,824 949,167 800,000

(e) As at 30 September 2006, the composition of borrowings held in foreign currency by the Group is as
follows: Australia Dollars – 9.8% (2005: 4.3%), Chinese Renminbi – 7.0% (2005: 9.2%) and US Dollars
– 4.1% (2005: 2.8%).

(f) As at 30 September 2006, the Company and Group had interest rate swaps in place, which have the economic
effect of converting borrowings from fixed rates to variable rates or vice versa. The fair value of these interest
rate swaps is discussed in Note 37. The weighted average effective interest rates are as at 30 September 2006
and include the effect of related interest rate swaps.

31. PROVISION FOR EMPLOYEE BENEFITS

THE GROUP
2006 2005
($’000) ($’000)

(Restated)
Balance at beginning of year 22,538 22,706
Currency realignment (1,119) 187
(Disposal)/acquisition of subsidiary companies (43) 315
Write back (262) (804)
Provision for the year 3,456 2,705
Payment for the year (2,651) (2,571)
Transfer (37) –

Balance at end of year 21,882 22,538

146 Fraser and Neave, Limited & Subsidiary Companies Annual Report 2006
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 September 2006

31. PROVISION FOR EMPLOYEE BENEFITS (cont’d)

(a) Defined Contribution Plan

The Group makes contributions to several post employment benefit plans. Most of these plans are defined
contribution plans whereby contributions are made to approved provident and superannuation funds in
Singapore, Malaysia, Hong Kong, Australia, Papua New Guinea, Vietnam, Cambodia, Sri Lanka, USA and
Europe.

(b) Defined Benefit Plan

The defined benefit plans in the United Kingdom, New Zealand and Japan are funded, defined benefit pension
scheme, the assets of which are held in separate trustee-administrated funds. The defined benefit plans in
Malaysia do not have separately funded assets. They provide lump sum benefit at normal retirement age.

The major assumptions used by the qualified independent actuaries were:

THE GROUP
2006 2005

Rate of increase in salaries 3.5% to 5.0% 3.5% to 5.0%

Expected rate of return on assets 5.0% to 6.1% 5.0% to 6.1%
Discount rate 3.9% to 7.0% 4.1% to 7.0%

The following tables summarise the components of net benefit expense and benefit liability:

2006 2005
($’000) ($’000)

Net benefit expense

Benefits earned during the year 702 248
Interest cost on benefit obligation 2,949 862
Net actuarial loss (2,392) 314
Curtailment loss (196) –
Transition obligation recognised 190 166

Net benefit expense 1,253 1,590

Benefit liability
Present value of benefit obligation 65,080 22,375
Fair value of plan assets (41,326) (2,194)

Unfunded benefit obligation 23,754 20,181

Unrecognised net actuarial loss (630) (734)
Unrecognised transition obligation – (1,576)
Deferred tax (1,531) –

Benefit liability 21,593 17,871

Present value of unfunded benefit obligation 15,835 16,837

Present value of funded benefit obligation 49,245 5,538

65,080 22,375

Fraser and Neave, Limited & Subsidiary Companies Annual Report 2006 147
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 September 2006

31. PROVISION FOR EMPLOYEE BENEFITS (cont’d)

(b) Defined Benefit Plan (cont’d)

The following table summaries the components of benefit (asset)/liability not taken up in the Group’s
consolidated financial statements:

THE GROUP
2006 2005
($’000) ($’000)

(Restated)
Benefit (asset)/liability
Present value of benefit obligation 9,838 52,338
Fair value of plan assets (11,935) (48,432)

Unfunded benefit obligation (2,097) 3,906

Unrecognised net actuarial loss 513 566
Deferred tax – (1,865)

Benefit (asset)/liability (1,584) 2,607

(c) Long Service Leave/Severance Allowances/Gratuity

Long service leave, severance allowances and gratuity are provided by joint venture companies based on the
number of years of service the employees have rendered at the end of each financial year as required by local
legislation in Vietnam, Papua New Guinea, Cambodia and Sri Lanka.

(d) Share Options

The equity-based share option schemes of the Group are:

Approval by Shareholders

(i) Fraser and Neave, Limited Executives’

Share Option Scheme, 1989 (“1989 Scheme”) 7 August 1989

(ii) Fraser and Neave, Limited Executives’

Share Option Scheme, 1999 (“1999 Scheme”) 30 September 1999

(iii) Asia Pacific Breweries Limited Executives’

Share Option Scheme (“APBL Scheme”) 21 February 1995

(iv) Fraser & Neave Holdings Bhd Executives’

Share Option Scheme (“F&NHB Scheme”) –

(v) Frasers Property (China) Limited’s

Share Option Scheme (“FPCL Scheme”) 20 May 2003

The options granted under the above Schemes are for a term no longer than 10 years from date of grant.

148 Fraser and Neave, Limited & Subsidiary Companies Annual Report 2006
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 September 2006

31. PROVISION FOR EMPLOYEE BENEFITS (cont’d)

(d) Share Options (cont’d)

Information regarding the 1989 Scheme, 1999 Scheme, APBL Scheme and F&NHB Scheme

(i) The Exercise price is equal to the market value of a share based on the average of the last done price
on the exchange which the respective shares are traded, for the five market days preceeding the option
offer date.

(ii) The grantee may exercise an option during the Exercise Period which commences 33 months after the
Offer Date.

(iii) Options expire 119 months after the Offer Date, except F&NHB Scheme options which expire 59
months after the option Offer Date.

Information regarding FPCL Scheme

(i) The Exercise Price will be determined by FPCL Board, but shall not be less than the highest of:

(1) the closing price as stated in the daily quotation sheet of the Stock Exchange of Hong Kong
Limited (“HKEX”) on the date of grant, which must be a trading day;

(2) the average closing prices as stated in the HKEX’s daily quotation sheets for the five trading
days immediately preceeding the date of grant; or

(3) the nominal value of FPCL share.

(ii) The vesting period of the share options is in the following manner:

Percentage of shares over which a

share option is exercisable
Granted Granted
before 2004 after 2004
Vesting Schedule (%) (%)

Before the first anniversary of the date of grant Nil Nil

On or after the first but before the second anniversary of the date of grant 25 40
On or after the second but before the third anniversary of the date of grant 25 30
On or after the third but before the fourth anniversary of the date of grant 25 30
On or after the fourth anniversary of the date of grant 25 NA

Fraser and Neave, Limited & Subsidiary Companies Annual Report 2006 149
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 September 2006

31. PROVISION FOR EMPLOYEE BENEFITS (cont’d)

(d) Share Options (cont’d)

In relation to the share options, if the grantee, during any of the periods specified above, exercised that share
options for such number of shares which, in aggregate, represents less than the number of shares for which
the eligible participant may exercise in respect of such period, the balance of the share comprised in that
share option for which the grantee could have exercised (but did not exercise) in that period shall be carried
forward and added to the number of shares which the grantee may exercise in the next succeeding period or
periods.

Information with respect to the number of options granted under the respective share options scheme
is as follows:

Fraser and Neave, Limited Executives’ Share Option Scheme

Balance as at Adjustment
1.10.2005 or due to Balance Previous Adjusted
Offer Date Options Options Sub-division as at Exercise Exercise
Options Offer Date if later Lapsed Exercised of Shares * 30.9.2006 Price Price * Exercise Period

1989 Scheme
1999 23.12.1998 16,873 – (9,288) 30,340 37,925 $3.86 $0.77 23.09.2001 – 22.11.2008

1999 Scheme
Year 1 23.11.1999 – – – – – – – 23.08.2002 – 22.10.2009
Year 2 21.11.2000 27,818 – (12,347) 61,884 77,355 $6.43 $1.29 22.08.2003 – 21.10.2010
Year 3 08.10.2001 128,514 – (80,606) 191,632 239,540 $6.98 $1.40 09.07.2004 – 08.09.2011
Year 3A 28.01.2002 11,845 – (6,966) 19,516 24,395 $7.81 $1.56 29.10.2004 – 08.09.2011
Year 3B 02.07.2002 130,651 – – 522,604 653,255 $7.79 $1.56 03.04.2005 – 02.06.2012
Year 4 01.10.2002 1,088,866 – (540,821) 2,192,180 2,740,225 $7.54 $1.51 01.07.2005 – 31.08.2012
Year 5 08.10.2003 1,985,728 (50,736) (579,254) 5,422,952 6,778,690 $10.58 $2.12 08.07.2006 – 07.09.2013
Year 6 08.10.2004 2,057,153 (188,422) – 7,474,924 9,343,655 $14.08 $2.82 08.07.2007 – 07.09.2014
Year 7 10.10.2005 2,394,857 (201,163) – 8,774,776 10,968,470 $17.32 $3.46 10.07.2008 – 09.09.2015

7,842,305 (440,321) (1,229,282) 24,690,808 30,863,510

* adjustment for sub-division of shares on 4 July 2006

The weighted average fair value of options granted during the year was $3.15 (2005: $2.38).
The weighted average share price for options exercised during the year was $3.78 (2005: $3.13).

150 Fraser and Neave, Limited & Subsidiary Companies Annual Report 2006
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 September 2006

31. PROVISION FOR EMPLOYEE BENEFITS (cont’d)

(d) Share Options (cont’d)

Fraser & Neave Holdings Bhd Executives’ Share Option Scheme

Balance as at
1.10.2005 or Balance
Offer Date Options Options as at Exercise
Options Offer Date if later Lapsed Exercised 30.9.2006 Price Exercise Period

2001 08.12.2000 45,599 (18,199) (27,400) – RM 3.13 08.09.2003 – 07.11.2005

2002 31.12.2001 406,188 (7,400) (363,088) 435,700 RM 3.56 01.10.2004 – 30.11.2006
2003 21.11.2002 1,531,800 (8,200) (1,438,300) 85,300 RM 3.49 21.08.2005 – 20.10.2007
2004 24.11.2003 2,233,200 (55,500) (700,200) 1,477,500 RM 3.83 24.08.2006 – 23.10.2008
2005 24.11.2004 2,328,900 (102,800) – 2,226,100 RM 4.89 24.08.2007 – 23.10.2009
2006 26.08.2005 2,380,400 (127,900) – 2,252,500 RM 5.54 26.05.2008 – 25.07.2010
2007 26.09.2006 2,318,700 – – 2,318,700 RM 6.12 26.06.2009 – 25.08.2011

11,244,787 (319,999) (2,528,988) 8,795,800

The weighted average fair value of options granted during the year was RM0.62 (2005: RM0.47).
The weighted average share price for options exercised during the year was RM6.06 (2005: RM5.09).

Frasers Property (China) Limited Share Option Scheme

Balance as at Adjustment
1.10.2005 or due to Balance Previous Adjusted
Offer Date Options Options Rights as at Exercise Exercise
Options Offer Date if later Lapsed Exercised Issue # 30.9.2006 Price Price # Exercise Period

2003 31.12.2003 12,600,000 (2,599,720) – 837,289 10,837,569 HK$0.1706 HK$0.1580 31.12.2004 - 30.12.2013
2004 31.12.2004 12,000,000 (1,323,832) – 873,831 11,549,999 HK$0.1670 HK$0.1547 31.12.2005 - 30.12.2014
2005 31.12.2005 13,100,000 (323,832) – 1,040,656 13,816,824 HK$0.1450 HK$0.1343 30.12.2006 - 29.12.2015

37,700,000 (4,247,384) – 2,751,776 36,204,392

# adjustment due to Rights Issue on 12 September 2006

The weighted average fair value of options granted during the year was HK$0.09 (2005: HK$0.10).
No options were exercised during the year.

Fraser and Neave, Limited & Subsidiary Companies Annual Report 2006 151
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 September 2006

31. PROVISION FOR EMPLOYEE BENEFITS (cont’d)

(d) Share Options (cont’d)

Asia Pacific Breweries Limited Executives’ Share Option Scheme

Balance Balance
as at Options Options as at Exercise
Options Offer Date 1.10.2005 Lapsed Exercised 30.9.2006 Price Exercise Period

1999 23.12.1998 12,379 – (6,100) 6,279 $3.61 22.09.2001 – 21.11.2008

2000 22.12.1999 17,820 – (9,980) 7,840 $4.28 21.09.2002 – 20.11.2009
2001 20.12.2000 53,700 – (38,750) 14,950 $3.91 19.09.2003 – 18.11.2010
2002 08.10.2001 140,625 – (134,975) 5,650 $3.79 08.07.2004 – 07.09.2011
2003 15.10.2002 636,950 – (599,850) 37,100 $4.79 15.07.2005 – 14.09.2012
2004 08.10.2003 1,031,525 (30,625) (866,650) 134,250 $6.29 08.07.2006 – 07.09.2013

1,892,999 (30,625) (1,656,305) 206,069

No options were issued during the year.

The weighted average fair value of options exercised during the year was $10.69 (2005: $8.26).

Included within the number of equity-settled options as at 1 October 2005 are equity-settled options that
have not been recognised in accordance with FRS 102 as these equity-settled options were granted on or
before 22 November 2002. These options have not been subsequently modified and therefore do not need to
be accounted for in accordance with FRS 102.

The fair value of share options, granted during the year, (including both equity and cash-settled options) as
at the date of grant, is determined using the Binomial valuation model, taking into account the terms and
conditions upon which the options were granted. The inputs to the model used are as follows:

Fraser and Neave, Limited Executives’ Share Option Scheme, 1989 and 1999

Year 5 Year 6 Year 7

Dividend yield (%) 4.5% 3.9% 3.1%

Expected volatility (%) 27.8% 25.0% 21.9%
Risk-free interest rate (%) 2.2% 2.2% 3.1%
Expected life of option (years) 4.0 4.0 4.0
Share price at date of grant (S$) 2.20 2.82 3.54
Exercise share price (S$) 2.12 2.82 3.46

152 Fraser and Neave, Limited & Subsidiary Companies Annual Report 2006
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 September 2006

31. PROVISION FOR EMPLOYEE BENEFITS (cont’d)

(d) Share Options (cont’d)

Fraser & Neave Holdings Bhd Executives’ Share Option Scheme

2004 2005 2006 2007

Dividend yield (%) 3.9% 5.1% 5.7% 5.1%

Expected volatility (%) 23.6% 17.2% 12.9% 15.6%
Risk-free interest rate (%) 5.6% 4.8% 3.6% 3.7%
Expected life of option (years) 4.5 4.5 4.5 4.5
Share price at date of grant (MYR) 3.84 4.86 5.35 6.15
Exercise share price (MYR) 3.83 4.89 5.54 6.12

Frasers Property (China) Limited Share Option Scheme

2004 2005 2006

Dividend yield (%) – – –

Expected volatility (%) 80.0% 80.0% 75.0%
Risk-free interest rate (%) 3.5% 2.9% 4.1%
Expected life of option (years) 6.3 5.8 5.2
Share price at date of grant (HKD) 0.167 0.167 0.145
Exercise share price (HKD) 0.171 0.167 0.145

Asia Pacific Breweries Limited Executives’ Share Option Scheme

Share Phantom share Phantom share

option option option
2004 2005 2006

Dividend yield (%) 4.1% 3.9% 3.3%

Expected volatility (%) 30.6% 25.0% 16.3%
Risk-free interest rate (%) 2.2% 2.4% 2.7%
Expected life of option (years) 6.0 4.6 3.7
Share price at date of grant (S$) 6.39 7.60 8.94
Exercise share price (S$) 6.29 7.48 8.96

The expected life of the option is based on historical data and is not necessarily indicative of exercise patterns
that may occur. The expected volatility reflects the assumptions that the historical volatility is indicative of
future trends, which may also not necessarily be the actual outcome.

Fraser and Neave, Limited & Subsidiary Companies Annual Report 2006 153
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 September 2006

31. PROVISION FOR EMPLOYEE BENEFITS (cont’d)

(e) Phantom Share Option Plan

Asia Pacific Breweries Limited (“APBL”), has in place a cash-based Phantom Share Option Plan
(“APBL PSOP”) which succeeds their Executives’ Share Option Scheme. No shares will be issued and
participants of the plan are not entitled to, and have no right or interest in the shares of APBL.

Information with respect to the number of options granted under the APBL PSOP is as follows:

(i) The Exercise Price is equal to the average closing market price for the thirty market days immediately
before the grant.

(ii) The grantee may exercise an option during the Exercise Period which commences 33 months after the
date of grant.

(iii) The options expire 57 months after the Offer Date.

(iv) Upon exercise of the options, an amount in cash equal to the excess (if any) of the average of the
closing price for the thirty days immediately preceding the date the options are exercised over the
Exercise Price, would be paid to the grantee. In the event the excess exceeds the Exercise Price, the
amount payable to the grantee shall not exceed the Exercise Price.
Balance as at
1.10.2005 or Balance
Offer Date Options Options as at Exercise
Options Offer Date if later Lapsed Exercised 30.9.2006 Price Exercise Period

2005 8.10.2004 1,192,700 (65,700) – 1,127,000 $7.58 08.07.2007 – 08.07.2009

2006 9.11.2005 1,318,825 (95,100) – 1,223,725 $8.96 09.08.2008 – 09.08.2010

2,511,525 (160,800) – 2,350,725

The weighted average fair value of options granted during the year was $0.94 (2005: $0.62).

The carrying amount of the liability recognised in the Group’s balance sheet relating to cash-settled
option granted under the PSOP as at 30 September 2006 is $4,493,000 (2005: $364,000). No option
granted under this plan had vested as at 30 September 2006.

154 Fraser and Neave, Limited & Subsidiary Companies Annual Report 2006
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 September 2006

32. DEFERRED TAX ASSETS AND LIABILITIES

THE GROUP THE COMPANY

2006 2005 2006 2005
($’000) ($’000) ($’000) ($’000)

(Restated)
The deferred tax liabilities of certain subsidiary companies at the end of the financial year are related to the
following:

Deferred tax liabilities

Differences in depreciation 72,906 84,256 – –
Tax effect on revaluation surplus 13,649 7,684 – –
Provisions 7,388 8,132 – –
Other deferred tax liabilities 23,157 3,759 18 –

Gross deferred tax liabilities 117,100 103,831 18 –

Less: Deferred tax assets

Employee benefits (4,724) (5,499) – –
Unabsorbed losses and capital allowances (2,504) (8,120) – –
Provisions (2,741) (4,807) – –
Other deferred tax assets (9) (162) – –

Gross deferred tax assets (9,978) (18,588) – –

Net deferred tax liabilities 107,122 85,243 18 –

Some overseas subsidiary companies have net deferred tax assets relating to the following:

Employee benefits (2,912) (2,991) – –

Differences in depreciation 11,098 5,002 – –
Unabsorbed losses and capital allowances (21,114) (4,755) – –
Provisions (6,037) (6,610) – –
Others (5,243) (321) – –

Net deferred tax assets (24,208) (9,675) – –

The deferred tax taken to equity during the year relating to (i) revaluation surpluses was $1,818,000
(2005: $3,448,000) and (ii) fair value adjustment was $17,651,000 (2005: $nil).

Deferred tax liabilities of $37,673,000 (2005: $40,759,000) have not been recognised in the consolidated
financial statements for the withholding and other taxes that would be payable on the unremitted earnings as
such amounts are permanently reinvested; such unremitted earnings totalled $191,035,000 at 30 September
2006 (2005: $206,464,000).

Fraser and Neave, Limited & Subsidiary Companies Annual Report 2006 155
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 September 2006

33. FUTURE COMMITMENTS

THE GROUP
2006 2005
($’000) ($’000)

(Restated)
Commitments not provided for in the financial statements:

(a) Commitments in respect of contract placed:

– Fixed assets 51,225 58,578
– Properties under development 629,902 612,773

681,127 671,351

(b) Other amounts approved by directors but not contracted for:

– Fixed assets 46,290 41,296
– Properties under development 1,544,968 1,978,062

1,591,258 2,019,358

Total 2,272,385 2,690,709

(c) Other commitments

(i) On completion of the development, one of the Group’s subsidiary company is committed to deliver
45,000 sq ft of built up units on the land acquisition.

(ii) The Group provided a Corporate Guarantee for Baht 374,142,440 as security for bank facility granted
to a joint venture company in respect of the acquisition of land.

(iii) The Group provided Letters of Financial Support for certain of its subsidiary companies.

156 Fraser and Neave, Limited & Subsidiary Companies Annual Report 2006
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 September 2006

34. LEASE COMMITMENTS

Operating Leases
Lease commitments under non-cancellable operating leases where the Group is a lessee:

THE GROUP
2006 2005
($’000) ($’000)

(Restated)
Payable within one year 16,329 15,703
Payable between one and five years 27,316 29,338
Payable after five years 40,376 31,408

84,021 76,449

Operating lease expense 29,467 28,758

The operating leases do not contain any escalation clauses and do not provide for contingent rents. Lease terms
do not contain restrictions on the Group activities concerning dividends, additional debts or entering into other
leasing agreements.

Lease commitments under non-cancellable operating leases where the Group is a lessor:

Receivable within one year 155,112 149,894

Receivable between one and five years 182,638 187,797
Receivable after five years 3,675 6,193

341,425 343,884

Contingent rents, generally determined based on a percentage of tenants’ revenue, of $3,621,000

(2005: $2,173,000) have been recognised as income by the Group in the profit statement during the year.

Fraser and Neave, Limited & Subsidiary Companies Annual Report 2006 157
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 September 2006

34. LEASE COMMITMENTS (cont’d)

Finance Leases
Lease commitments under non-cancellable finance leases where the Group is a lessee:

THE GROUP
2006 2005
($’000) ($’000)

(Restated)
Minimum lease payments due:
Payable within one year 1,275 1,025
Payable between one and five years 3,027 2,837
Payable after five years – –

4,302 3,862
Less: Future finance charges (388) (398)

3,914 3,464

The finance leases do not contain any escalation clauses and do not provide for contingent rents. Lease terms
do not contain restrictions on the Group activities concerning dividends, additional debts or entering into other
leasing agreements.

35. RELATED PARTY TRANSACTIONS

The following were the significant related party transactions entered into by the Group with:

THE GROUP
2006 2005
($’000) ($’000)

(Restated)
Directors
Sale of condominium units 1,247 15,175
Joint venture companies
Rental received 892 596
Management fees received 2,200 2,200
Sale of bottles 19,740 17,443
Management fees paid 284 250
Purchase of cullets 57 47

These transactions were based on agreed fees or terms determined on a commercial basis.

158 Fraser and Neave, Limited & Subsidiary Companies Annual Report 2006
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 September 2006

36. CONTINGENT LIABILITIES

The Group may be subject to business taxes on the profits from overseas development projects. The tax expense will
be recorded once it can be reasonably ascertained and the related assessment received from the tax authorities.

37. FINANCIAL RISK MANAGEMENT

The Company and the Group are exposed to financial risks, including primarily the effects of changes in currency
exchange rates and interest rates and use derivatives and other instruments in connection with their risk management
activities. The Company and the Group do not hold or issue derivative financial instruments for trading purposes.

The Group has established processes to monitor and control hedging transactions in a timely and accurate manner.

These policies are reviewed regularly by the Audit and Executive Committees to ensure that the Group’s policies and
guidelines are adhered to. The Group’s accounting policies in relation to derivatives are set out in Note 2.

Foreign Currency Risk

The Group has exposure to foreign exchange risk as a result of transactions denominated in foreign currencies, arising
from normal trading and investment activities. Where exposures are certain, it is the Group’s policy to hedge these
risks as they arise. For those exposures less certain in their timing and extent, it is the Group’s policy to cover 50%
to 90% of anticipated exposures for a maximum period of 12 months forward. The Group uses foreign currency
forward exchange contracts to manage these foreign exchange risks.

At 30 September 2006, the Group had entered into foreign currency forward exchange buy contracts amounting
to $41 million (2005: $87 million) and foreign currency forward exchange sell contracts amounting to $40 million
(2005: $58 million). The fair value adjustments of the buy contracts and sell contracts (which is the difference
between the notional principal amount and market value of the contracts) are loss of $212,000 (2005: $1,672,000)
and $8,000 (2005: $763,000) respectively.

The fair values of foreign currency forward exchange contracts have been calculated using rates quoted by the
Group’s bankers to terminate the contracts at the balance sheet date.

Fraser and Neave, Limited & Subsidiary Companies Annual Report 2006 159
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 September 2006

37. FINANCIAL RISK MANAGEMENT (cont’d)

Liquidity Risk
The Company’s and the Group’s exposure to liquidity risk arises in the general funding of the Company’s and the
Group’s business activities. It includes the risks of being able to fund business activities in a timely manner.

The Group adopts a prudent approach to managing its liquidity risk. The Group always maintain sufficient cash and
marketable securities, and have available funding through diverse sources of committed and uncommitted credit
facilities from various banks.

As at 30 September 2006, the Group’s net borrowings to shareholders’ fund and total equity ratios are as follows:

THE GROUP
2006 2005
($’000) ($’000)

(Restated)
Cash & bank deposits 834,891 577,367
Borrowings (3,823,277) (3,354,997)

Net borrowings (2,988,386) (2,777,630)

Shareholders’ fund 3,600,480 3,096,639

Total equity (including Minority interests) 4,604,578 3,717,895

Net borrowings/Shareholders’ fund 0.83 0.90

Net borrowings/Total equity 0.65 0.75

Credit Risk
The Company’s and the Group’s maximum exposure to credit risk in the event that the counterparties fail to perform
their obligations as of 30 September 2006 in relation to each class of recognised financial assets, other than
derivatives, is the carrying amount of those assets as indicated in the balance sheet. The Company and the Group
have no significant concentration of credit risk. The Company and the Group have policies in place to ensure that
sales of products and services are made to customers with an appropriate credit history.

With respect to derivative financial instruments, credit risk arises from the potential failure of counterparties to meet
their obligations under the contract or arrangement. The Group’s maximum credit risk exposure for foreign exchange
contracts and interest rate swap contracts are limited to the fair value adjustments of these contracts. It is the
Company’s and the Group’s policy to enter into financial instruments with a diversity of credit worthy counterparties.
The Company and the Group do not expect to incur material credit losses on their financial assets or other financial
instruments.

The Company and the Group do not have significant exposure to any individual customer or counterparty.

160 Fraser and Neave, Limited & Subsidiary Companies Annual Report 2006
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 September 2006

37. FINANCIAL RISK MANAGEMENT (cont’d)

Interest Rate Risk

The Company’s and the Group’s exposure to market risk for changes in interest rates relate primarily to debt obligation
with financial institutions. The Company’s and the Group’s policy is to manage interest cost using a mix of fixed and
variable rate debts, and interest rate swaps. The Company and the Group sometimes use interest rate swaps as cash
flow hedges of future interest payments, which have the economic effect of converting borrowings from fixed rates
to variable rates or vice versa.

Under the interest rate swaps, the Company and the Group agree with other parties to exchange, at specified
intervals, mainly quarterly, the difference between fixed rate and floating rate interest amounts calculated by reference
to the agreed notional principal amounts.

The Company and the Group have the following interest rate swap arrangements in place:

THE GROUP THE COMPANY

2006 2005 2006 2005
($’000) ($’000) ($’000) ($’000)

Notional Amount
Within one year 90,000 10,000 90,000 –
Between one and three years 325,000 165,000 325,000 90,000
After three years 241,309 645,238 150,000 465,000

656,309 820,238 565,000 555,000

Net Fair Value

Fair value gain on interest rate swap contracts 6,441 8,373 5,735 7,474

Fair value loss on interest rate swap contracts (3,312) (5,477) (3,312) (4,950)

The fair values of interest rate swap contracts as at the balance sheet date have been calculated using rates quoted
by the Group’s bankers to terminate the contracts at the balance sheet date.

At 30 September 2006, the fixed interest rate of the outstanding interest rate swap contracts is 3.7%
(2005: 2.1% to 3.0%), while the floating interest rates are mainly linked to Singapore and London Interbank
Offered Rates.

Fraser and Neave, Limited & Subsidiary Companies Annual Report 2006 161
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 September 2006

37. FINANCIAL RISK MANAGEMENT (cont’d)

Interest Rate Risk (cont’d)

The following table sets out the carrying amount, by maturity, of the Group’s financial instruments that are exposed
to interest rate risk:

THE GROUP
Variable rates Fixed rates
Less than Less than Between 1 After
1 year 1 year and 5 years 5 years
($’000) ($’000) ($’000) ($’000)

Year ended 30 September 2006

Assets
Cash and bank deposits 330,886 355,981 215 –
Other financial assets – 150,000 – 25,450

Liabilities
Borrowings 1,505,128 408,036 1,521,738 360,044

Year ended 30 September 2005

Assets
Cash and bank deposits 376,544 89,395 604 –
Other financial assets – – – 25,450

Liabilities
Borrowings 1,300,719 576,959 1,234,672 223,908

162 Fraser and Neave, Limited & Subsidiary Companies Annual Report 2006
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 September 2006

37. FINANCIAL RISK MANAGEMENT (cont’d)

Interest Rate Risk (cont’d)

THE COMPANY
Variable rates Fixed rates
Less than Less than Between 1 After
1 year 1 year and 5 years 5 years
($’000) ($’000) ($’000) ($’000)

Year ended 30 September 2006

Assets
Cash and bank deposits 15,277 – – –

Liabilities
Borrowings 394,923 – 299,554 349,614

Year ended 30 September 2005

Assets
Cash and bank deposits 22,618 – – –

Liabilities
Borrowings 412,340 – 300,000 200,000

Interest on financial instruments classified as floating rate is repriced at intervals of less than one year. Interest
on financial instruments classified as fixed rate is fixed until the maturity of the instrument. The other financial
instruments of the Group that are not included in the above tables are non-interest bearing and are therefore not
subject to interest rate risk.

The Company and the Group are in a net interest expense position for the years ended 30 September 2006
and 2005.

Fraser and Neave, Limited & Subsidiary Companies Annual Report 2006 163
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 September 2006

37. FINANCIAL RISK MANAGEMENT (cont’d)

Market Risk
The Company and the Group are exposed to market risk and the risk of impairment in the value of investments held.
The Company and the Group manage the risk of impairment by evaluation of investment opportunities, continuously
monitoring the performance of investments held and assessing market risk relevant to which the investments
operate.

Fair Values
The following methods and assumptions are used to estimate the fair value of each class of financial instruments for
which it is practicable to estimate that value:

(a) Cash and Bank Balances, Other Debtors and Other Creditors
The carrying amounts of these items approximate fair value due to their short term nature.

(b) Trade Debtors and Trade Creditors

The carrying amounts of receivables and payables approximate fair value because these are subject to normal
trade credit terms.

(c) Amounts due from/to Related Companies

The carrying amounts of amounts due from/to related companies in current assets and current liabilities
approximate fair value due to their short term nature. For amounts due from related companies included in
long term assets, no disclosure of the fair value has been made, as it is not practicable to determine the fair
value with sufficient reliability since these balances have no fixed terms of repayment.

(d) Short Term Investments

Market value of quoted investment is determined by reference to stock exchange quoted prices.

The unquoted investment do not have quoted market prices in an active market nor are there other methods
of reasonably estimating the fair value readily available. It is not practicable to determine fair value with
sufficient reliability without incurring excessive costs.

(e) Bank Borrowings and Term Loans

The fair value of fixed rate bank borrowings and term loans are disclosed in Note 30. The carrying value of
bank borrowings and term loans within one year and floating rate borrowings and loans approximate their
fair value.

164 Fraser and Neave, Limited & Subsidiary Companies Annual Report 2006
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 September 2006

38. UNUSUAL ITEM

As previously announced in September 2003, the former Finance Manager of a joint venture company, Asia Pacific
Breweries (S) Pte Ltd (“APBS”), Chia Teck Leng (“CTL”), was arrested by the police and subsequently charged in Court
and convicted on multiple charges for cheating and using forged documents to obtain and operate unauthorised
bank accounts in the name of APBS with CTL as the sole signatory.

In September 2004, four banks, Bayerische Hypo-und Vereinsbank Aktiengesellschaft, Skandinaviska Enskilda Banken,
Mizuho Corporate Bank Ltd and Sumitomo Mitsui Banking Corporation, commenced separate actions against APBS
for a total sum amounting to approximately $117.1 million.

Drew & Napier LLC has been instructed to defend APBS in each of these actions. Parties are in the midst of
interrogatories and there is a pending appeal in respect of discovery. Our lawyers have advised that based on the
existing documents and instructions, APBS has good arguable defences and will be vigorously defending the claims.
Consequently, no provision in the financial statements is considered necessary.

39. SUBSEQUENT EVENTS

(a) On 3 October 2006, the Group’s subsidiary company, Fraser & Neave Holdings Bhd (“F&NHB”), incorporated
a wholly-owned subsidiary in Thailand namely, F&N Dairies (Thailand) Limited (“F&N Thai”). The issued and
paid up share capital of F&N Thai is Baht 100,000 comprising 1,000 shares of Baht 100 each.

(b) On 13 October 2006, F&NHB acquired two wholly-owned companies, namely Arolys Singapore Pte Ltd
(“Arolys”) and Lion Share Management Limited (“LSM Ltd”). Arolys was incorporated in Singapore and LSM
Ltd was incorporated in the British Virgin Islands. Both companies have issued and paid up share capital of one
Singapore Dollar and one US Dollar respectively.

(c) On 16 October 2006, the following were announced by F&NHB through Bursa Malaysia:

(i) F&NHB and F&N Thai, entered into a Master Agreement with Nestle (Thai) Limited (“Navanakorn
Vendor”) and Nestle Dairy (Thailand) Limited (“Pakchong Vendor”) for the following:

(a) Proposed acquisition by F&N Thai of the canned liquid milk production assets (“Navanakorn
Assets”) from the Navanakon Vendor together with the relevant raw materials, packaging,
partially completed products, finished products and spare parts (“Navanakorn Transferable
Stocks”) owned by the Navanakorn Vendor; and

(b) Proposed acquisition by F&N Thai of the chilled dairy and juice production assets together with
the building on which the production assets are located (“Pakchong Assets”) from Pakchong
Vendor together with the relevant raw materials, packaging, partially completed products,
finished products and spare parts (“Pakchong Transferable Stocks”) owned by Pakchong
Vendor.

(Both the Navanakorn Assets and Pakchong Assets shall collectively be referred to as the “Thai
Assets”, whilst both Navanakorn Transferable Stock and Pakchong Transferable Stocks shall
collectively referred to as the “Transferable Stocks”).

The cash consideration for the Thai Assets is approximately $42 million (RM 97.56 million) and
the cash consideration for the Transferable Stock is $46.5 million (RM107.87 million).

Fraser and Neave, Limited & Subsidiary Companies Annual Report 2006 165
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 September 2006

39. SUBSEQUENT EVENTS (cont’d)

(ii) F&NHB and LSM Ltd, entered into a sale agreement with Societe des Produits Nestle S.A. to acquire
the “Tea Pot” brand from Societe Nestle for a cash consideration of approximately $36.8 million
(RM85.45 million).

(iii) F&NHB entered into a conditional sale and purchase agreement with Nestle S.A. to acquire the remaining
6,000,000 ordinary shares of RM1 each in Premier Milk (Malaya) Sdn Bhd, for a cash consideration of
approximately $8.2 million (RM19.12 million).

The above proposed acquisitions are still pending approvals from shareholders and relevant authorities.

(d) On 27 October 2006, the Group’s subsidiary company, Times Publishing Ltd, through its wholly-owned
subsidiary company, Times The Bookshop Pte Ltd (“TTB”), acquired 49% of the issued share capital of Pacific
Bookstores Pte Ltd (“Pacific Bookstores”). TTB has also been granted (i) an option (“Call Option 1”) to acquire,
within 2 years of completion of the acquisition, further shares in the capital of Pacific Bookstores so as to
increase its shareholding to 60%, and (ii) a further option to acquire, at any time after exercising Call Option 1
but before the expiry of 5 years from date of of completion of the acquisition, the balance 40% of the issued
share capital of Pacific Bookstores.

Pacific Bookstores carries on the business of selling books and stationery through bookstores in schools and
online cyber bookstores.

The consideration for the acquisition is $2.65 million, subject to adjustment under a profit warranty. The net
asset value of Pacific Bookstores as at 30 September 2006 is estimated to be $3.87 million.

(e) On 1 November 2006, the Group’s subsidiary company, F&N Dairy Investments Pte Ltd (“F&NDI”), entered into
a conditional agreement with its associated company, China Dairy Group Ltd (“CDG”) to acquire CDG’s entire
interest in Tien Chun Pte Ltd (“TCPL”).

TCPL has jointly with Xi’an Yinqiao Biological Science & Technology Co., Ltd (“Yinqiao”), an ultimate
wholly-owned subsidiary company of CDG, established PaediaNutrition Company, Limited
(“PaediaNutrition”). It is proposed that the Group grants PaediaNutrition licence to use certain of the
Group’s trademark, and PaediaNutrition will enter into certain business agreements with Yinqiao in relation
to the contract packing of Yinqiao’s milk powder products by PaediaNutrition and the distribution of
PaediaNutrition’s milk products by Yinqiao in certain authorised territories. This agreement is conditional upon
shareholders’ approval being obtained by CDG.

166 Fraser and Neave, Limited & Subsidiary Companies Annual Report 2006
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 September 2006

40. NEW ACCOUNTING STANDARDS AND FRS INTERPRETATION

Certain new accounting standards and interpretations have been issued as at balance sheet date but are not
yet effective. The Group’s assessment of those standards and interpretations that are relevant to the Group is as
follows:

(a) FRS 1 (revised) Presentation of Financial Statements

The Group will adopt this standard on 1 October 2007. FRS 1 (revised) requires the Group to make new
disclosures to enable the users of the financial statements to evaluate the Group’s objectives, policies and
processes for managing its capital.

(b) FRS 40 Investment Property

The Group will adopt FRS 40 for the financial year starting 1 October 2007.

Currently, investment properties are accounted for as set out in Note 2.10. Under FRS 40, changes in fair
values of investment properties are required to be included in the profit statement. On transition to FRS 40 on
1 October 2007, the amount accumulated in the asset revaluation reserve, as at 30 September 2007, relating
to investment property will be adjusted against the opening retained earnings at 1 October 2007.

(c) FRS 107 Financial Instruments: Disclosure

The Group will adopt FRS 107 for the financial year starting 1 October 2007. This standard requires quantitative
disclosures of nature and extent of risks arising from financial instruments in addition to the disclosures
currently required under FRS 32. Adoption of this standard will result in additional disclosures in the financial
statements.

(d) INT FRS 104 Determining whether an Asset Contains a Lease

The Group will adopt INT FRS 104 for the financial year starting 1 October 2006. This interpretation requires
the determination of whether an arrangement is, or contains a lease to be based on the substance of the
arrangement and requires an assessment of whether the arrangement is dependent on the use of a specific
asset or assets and the arrangement conveys a right to use the asset.

(e) RAP 11 Pre-Completion Contracts for the Sale of Development Property

RAP 11 was issued by the Institute of Certified Public Accountants of Singapore in October 2005. This statement
mentioned that a property developer’s sale and purchase agreement is not a construction contract as defined
in FRS 11 (Construction Contract) and the percentage of completion (POC) method of recognising income,
which is allowed under FRS 11 for construction contracts may not be applicable for property developers.

The relevant standard for revenue recognition by property developers is FRS 18 (Revenue), which addresses
revenue recognition generally and for all types of entities. However, there is no clear conclusion in
FRS 18 whether the POC method or the completion of construction method is more appropriate for property
developers. The issue is being addressed by the International Accounting Standards Board.

Fraser and Neave, Limited & Subsidiary Companies Annual Report 2006 167
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 September 2006

40. NEW ACCOUNTING STANDARDS AND FRS INTERPRETATION (cont’d)

The Group uses the POC method for recognising revenues from partly completed residential projects which are held
for sale. If the Group had adopted the COC method, the impact on the financial statements will be as follows:

GROUP
2006
($’000)

Profit statement
Decrease in revenue recognised for the year (428,800)
Decrease in profit for the year (129,356)
Balance sheet
Decrease in opening accumulated profits (79,380)
Decrease in properties under development
At 1 October 2005 (114,231)
At 30 September 2006 (291,496)
Decrease in minority interests
At 1 October 2005 (4,328)
Share of profit for the year (6,678)

41. COMPARATIVE FIGURES

Certain comparative figures have been reclassified to conform to the requirements of the new and revised FRS,
as disclosed in Note 2.2 and to be consistent with the current year’s presentation.

42. SUBSIDIARY, JOINT VENTURE AND ASSOCIATED COMPANIES

Effective
Shareholding
2006 2005 Principal Activities

SUBSIDIARY COMPANIES OF THE COMPANY

Country of Incorporation and Place of Business: Singapore

Fraser & Neave (Singapore) Pte Ltd 100.0% 100.0% Management Services
F&N Investments Pte Ltd 100.0% 100.0% Investment Holding
F&N Foods Pte Ltd 100.0% 100.0% Manufacture of Dairy Products
Premier Milk (S) Pte Ltd 100.0% 100.0% Dormant
Asia Dairies (S) Pte Ltd 100.0% 100.0% Dormant
F&N Dairy Investments Pte Ltd 100.0% 100.0% Investment Holding
Interflavine Pte Ltd 100.0% 100.0% Beverage Base Manufacturing
International Theme Parks (Singapore) Pte Ltd 100.0% 100.0% Dormant
Phoenix (Singapore) Pte Ltd 100.0% 100.0% Dormant
Fannet Online Pte Ltd 100.0% 100.0% Dormant
Times Publishing Ltd 100.0% 100.0% Investment Holding
Frasers Centrepoint Limited 100.0% 100.0% Investment Holding
[formerly Centrepoint Properties Ltd]
F&N Boncafe Beverages Pte Ltd 60.0% 60.0% Marketing Ready-To-Drink Coffee
[held by a subsidiary company] Beverages
F&N DCH Holding Pte Ltd 51.0% 51.0% Dormant
[held by a subsidiary company]

168 Fraser and Neave, Limited & Subsidiary Companies Annual Report 2006
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 September 2006

42. SUBSIDIARY, JOINT VENTURE AND ASSOCIATED COMPANIES (cont’d)

Effective
Shareholding
2006 2005 Principal Activities

SUBSIDIARY COMPANIES OF THE COMPANY (cont’d)

Country of Incorporation and Place of Business: Hong Kong

(A) Fraser & Neave Investments (HK) Ltd 100.0% 100.0% Investment Holding

Country of Incorporation and Place of Business: Malaysia

(A) Fraser & Neave Holdings Bhd 58.7% 59.4% Investment Holding
(A) Tiger Taverns Sdn Bhd 100.0% 100.0% Dormant
(A) Magnolia – PDL Dairies (1993) Sdn Bhd 100.0% 100.0% Dormant
(A) Fannet Online Sdn Bhd 100.0% 100.0% Dormant
(A) F&N Services (L) Bhd 100.0% 100.0% Investment Holding

Country of Incorporation and Place of Business: Vietnam

(A) F&N Vietnam Foods Co. Ltd 100.0% 100.0% Manufacture and Distribution of Dairy
[held by a subsidiary company] Products and Beverages

Country of Incorporation and Place of Business: Thailand

(A) F&N United Ltd 95.0% 95.0% Manufacture and Distribution of Dairy
[held by a subsidiary company] Products

Country of Incorporation and Place of Business: Myanmar

(C) Myanmar Brewery Ltd 55.0% 55.0% Brewing and Distribution of Beer
[Accounting year ends on 31 March]

Country of Incorporation and Place of Business: Australia

(A) Red Lion Holdings Pty Ltd 100.0% 100.0% Dormant
[formerly A2 Australia Pty Limited]
[held by a subsidiary company]

Country of Incorporation: British Virgin Islands

Place of Business: Hong Kong
(B) Vision Century Limited 100.0% 100.0% Investment Holding

Country of Incorporation: Bermuda

Place of Business: Hong Kong
(A) Frasers Property (China) Limited 56.2% 55.0% Investment Holding
[F&N Group’s effective shareholdings are held through Vision Century Limited (17.7%) and Frasers Centrepoint Limited (39.06%)]

SUBSIDIARY COMPANIES OF FRASER & NEAVE HOLDINGS GROUP

Country of Incorporation and Place of Business: Malaysia

(A) Fraser & Neave (Malaya) Sdn Bhd 58.7% 59.4% Management Services and
Property Investment Holdings
Notes:
(A) Audited by Ernst & Young in the respective countries.
(B) Not required to be audited under the laws of the country of incorporation.
(C) Audited by other firms of auditors.

Fraser and Neave, Limited & Subsidiary Companies Annual Report 2006 169
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 September 2006

42. SUBSIDIARY, JOINT VENTURE AND ASSOCIATED COMPANIES (cont’d)

Effective
Shareholding
2006 2005 Principal Activities

SUBSIDIARY COMPANIES OF FRASER & NEAVE HOLDINGS GROUP

Country of Incorporation and Place of Business: Malaysia

(A) F&N Coca-Cola (Malaysia) Sdn Bhd 52.8% 53.4% Distribution of Soft Drinks
(A) F&NCC Beverages Sdn Bhd 52.8% 53.4% Manufacture of Soft Drinks
(A) F&N Dairies (Malaysia) Sdn Bhd 58.7% 59.4% Distribution of Dairy Products
(A) Premier Milk (Malaya) Sdn Bhd 44.0% 44.5% Manufacture of Dairy Products
(A) Four Eights Sdn Bhd 58.7% 59.4% Dormant
(A) F&N Foods Sdn Bhd 58.7% 59.4% Manufacture of Dairy Products
(A) Malaya Glass Products Sdn Bhd 58.7% 59.4% Manufacture and Sale of Glass
Containers
(A) Kuala Lumpur Glass Manufacturers Company Sdn Bhd 58.7% 59.4% Manufacture and Sale of Glass
Containers
(A) Wimanis Sdn Bhd 58.7% 59.4% Property Development
(A) Brampton Holdings Sdn Bhd 58.7% 59.4% Property Investment Holding
(A) Lettricia Corporation Sdn Bhd 41.1% 41.6% Property Development
(A) Elsinburg Holdings Sdn Bhd 58.7% 59.4% Property Development
(A) Vacaron Company Sdn Bhd 58.7% 59.4% Dormant
(A) Nuvak Company Sdn Bhd 58.7% 59.4% Dormant
(A) Greenclipper Corporation Sdn Bhd 58.7% 59.4% Dormant
(C) Utas Mutiara Sdn Bhd 58.7% 59.4% Property Investment Holding
(A) Borneo Springs Sdn Bhd 55.7% – Manufacture and Sale of Mineral Water,
Carbonated Drinks and Bottles

Country of Incorporation and Place of Business: Thailand

(A) Siam Malaya Glass (Thailand) Co Ltd 41.1% 41.6% Manufacture and Sale of Glass Containers

Country of Incorporation and Place of Business: Vietnam

(A) Malaya Vietnam Glass Ltd 41.1% 41.6% Manufacture and Sale of Glass Containers

Country of Incorporation and Place of Business: China

(A) Sichuan Malaya Glass Co Ltd 35.2% 35.6% Manufacture and Sale of Glass Containers
[Accounting year ends on 31 December]

SUBSIDIARY COMPANIES OF FRASERS CENTREPOINT GROUP

(FORMERLY CENTREPOINT PROPERTIES GROUP)

Country of Incorporation and Place of Business: Singapore

FCL Property Investments Pte Ltd 100.0% 100.0% Property Investment
[formerly CPL Property Investments Pte Ltd]
FCL Enterprises Pte Ltd 100.0% 100.0% Property Investment
[formerly CPL Enterprises Pte Ltd]

Notes:
(A) Audited by Ernst & Young in the respective countries.
(B) Not required to be audited under the laws of the country of incorporation.
(C) Audited by other firms of auditors.

170 Fraser and Neave, Limited & Subsidiary Companies Annual Report 2006
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 September 2006

42. SUBSIDIARY, JOINT VENTURE AND ASSOCIATED COMPANIES (cont’d)

Effective
Shareholding
2006 2005 Principal Activities

SUBSIDIARY COMPANIES OF FRASERS CENTREPOINT GROUP (cont’d)

Country of Incorporation and Place of Business: Singapore

Riverside Property Pte Ltd 100.0% 100.0% Property Investment
FCL Centrepoint Pte Ltd 100.0% 100.0% Investment Holding
[formerly CS Centrepoint Pte Ltd]
Anchor Developments Pte Ltd 100.0% 100.0% Property Investment and Development
Orrick Investments Pte Ltd 100.0% 100.0% Property Investment
Yishun Development Pte Ltd 100.0% 100.0% Property Investment
Frasers Centrepoint Developments Pte Ltd 100.0% 100.0% Dormant
[formerly Centrepoint Developments Pte Ltd]
FCL Alexandra Point Pte Ltd 100.0% 100.0% Property Investment
[formerly CPL Alexandra Point Pte Ltd]
Woodlands Complex Pte Ltd 100.0% 100.0% Property Investment
FCL Woodlands Pte Ltd 100.0% 100.0% Dormant
[formerly CPL Woodlands Pte Ltd]
Chempaka Development Pte Ltd 100.0% 100.0% Dormant
Riverside Walk Pte Ltd 100.0% 100.0% Property Development
FCL Ventures Pte Ltd 100.0% 100.0% Property Development
[formerly CPL Ventures Pte Ltd]
Nasidon Investments Pte Ltd 100.0% 100.0% Property Development
FCL Management Services Pte Ltd 100.0% 100.0% Management Services
[formerly CPL Management Services Pte Ltd]
Northspring Development Pte Ltd 100.0% 100.0% Property Development
Riverside Investments Pte Ltd 100.0% 100.0% Property Development
Yishun Land Pte Ltd 100.0% 100.0% Property Development
Yishun Property Pte Ltd 100.0% 100.0% Property Development
FCL Tampines Pte Ltd 80.0% 80.0% Property Development
[formerly CPL Tampines Pte Ltd]
FCL Homes Pte Ltd 100.0% 100.0% Property Development
[formerly CPL Homes Pte Ltd]
FCL Land Pte Ltd 100.0% 100.0% Property Development
[formerly CPL Land Pte Ltd]
FCL Assets Pte Ltd 100.0% 100.0% Investment Holding
[formerly CPL Assets Pte Ltd]
FCL Estates Pte Ltd 100.0% 100.0% Dormant
[formerly CPL Estates Pte Ltd]
FCL (Korea) Pte Ltd 100.0% 100.0% Dormant
[formerly CPL (Korea) Pte Ltd]
Frasers Hospitality Pte Ltd 100.0% 100.0% Management Services
[formerly Fraser Serviced Residences Pte Ltd]
Frasers (UK) Pte Ltd 75.0% 75.0% Investment Holding

Notes:
(A) Audited by Ernst & Young in the respective countries.
(B) Not required to be audited under the laws of the country of incorporation.
(C) Audited by other firms of auditors.

Fraser and Neave, Limited & Subsidiary Companies Annual Report 2006 171
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 September 2006

42. SUBSIDIARY, JOINT VENTURE AND ASSOCIATED COMPANIES (cont’d)

Effective
Shareholding
2006 2005 Principal Activities

SUBSIDIARY COMPANIES OF FRASERS CENTREPOINT GROUP (cont’d)

Country of Incorporation and Place of Business: Singapore (cont’d)

Frasers (Australia) Pte Ltd 75.0% 75.0% Investment Holding
FCL (China) Pte Ltd 100.0% 100.0% Investment Holding
[formerly CPL (China) Pte Ltd]
Marine Parade View Pte Ltd 100.0% 100.0% Property Development
FCL (Fraser) Pte Ltd 100.0% 100.0% Investment Holding
[formerly CPL (Fraser) Pte Ltd]
FCL Boon Lay Pte Ltd 100.0% 100.0% Property Development
[formerly CPL Boon Lay Pte Ltd]
FCL Sophia Pte Ltd 100.0% 100.0% Property Development
[formerly CPL Sophia Pte Ltd]
Frasers Centrepoint Retail Concepts Pte Ltd 100.0% 100.0% Management Services
[formerly Centrepoint Retail Concepts Pte Ltd]
FCL Choa Chu Kang Pte Ltd 100.0% 100.0% Property Development
[formerly CPL Choa Chu Kang Pte Ltd]
FCL Joo Chiat Place Pte Ltd 100.0% 100.0% Property Development
[formerly CPL Joo Chiat Place Pte Ltd]
Frasers (NZ) Pte Ltd 75.0% 75.0% Investment Holding
FCL China Development Pte Ltd 100.0% 100.0% Investment Holding
[formerly CPL China Development Pte Ltd]
FCL Court Pte Ltd 100.0% 100.0% Property Development
[formerly CPL Court Pte Ltd]
FCL Lodge Pte Ltd 100.0% 100.0% Property Development
[formerly CPL Lodge Pte Ltd]
FCL Place Pte Ltd 100.0% 100.0% Property Development
[formerly CPL Place Pte Ltd]
FCL Rise Pte Ltd 100.0% 100.0% Property Development
[formerly CPL Rise Pte Ltd]
Frasers (Thailand) Pte Ltd 100.0% 100.0% Investment Holding
MLP Co Pte Ltd 100.0% 100.0% Investment Holding
SAJV Co Pte Ltd 100.0% 100.0% Investment Holding
River Valley Properties Pte Ltd 100.0% 100.0% Investment Holding & Property
Development
River Valley Shopping Centre Pte Ltd 100.0% 100.0% Property Investment
River Valley Tower Pte Ltd 100.0% 100.0% Property Investment
River Valley Apartments Pte Ltd 100.0% 100.0% Property Investment
Lion (Singapore) Pte Ltd 100.0% 100.0% Property Development
Sinomax International Pte Ltd 100.0% 100.0% Investment Holding
FCL View Pte Ltd 100.0% 100.0% Property Development
[formerly CPL View Pte Ltd]

Notes:
(A) Audited by Ernst & Young in the respective countries.
(B) Not required to be audited under the laws of the country of incorporation.
(C) Audited by other firms of auditors.

172 Fraser and Neave, Limited & Subsidiary Companies Annual Report 2006
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 September 2006

42. SUBSIDIARY, JOINT VENTURE AND ASSOCIATED COMPANIES (cont’d)

Effective
Shareholding
2006 2005 Principal Activities

SUBSIDIARY COMPANIES OF FRASERS CENTREPOINT GROUP (cont’d)

Country of Incorporation and Place of Business: Singapore (cont’d)

Frasers Hospitality (China) Pte Ltd 100.0% 100.0% Property Investment
[formerly Fraser Serviced Residences (China) Pte Ltd]
FCL (Xian) Pte Ltd 100.0% 100.0% Dormant
[formerly CPL (Xian) Pte Ltd]
FCL Tower Pte Ltd 100.0% 100.0% Property Development
[formerly CPL Tower Pte Ltd]
FCL Loft Pte Ltd 100.0% 100.0% Property Development
[formerly CPL Loft Pte Ltd]
Riviera Investment Ltd 100.0% – Investment Holding
[Accounting year ends on 31 December]
Emerald Hill Developments Pte Ltd 100.0% 100.0% Property Investment
FCL Peak Pte Ltd 100.0% 100.0% Property Development
[formerly CPL Peak Pte Ltd]
Frasers Centrepoint Asset Management Ltd 100.0% – Management Services
FCL Investments Pte Ltd 100.0% – Investment Holding
FCL Trust Holdings Pte Ltd 100.0% – Investment Holding
Frasers Centrepoint Trust 51.0% – Real Estate Investment Trust

Country of Incorporation and Place of Business: Malaysia

(A) Centrepoint Utama Sdn Bhd 100.0% 100.0% Dormant

Country of Incorporation and Place of Business: Vietnam

(A) Me Linh Point Ltd 75.0% 75.0% Property Investment
(A) Saigon Apartments Joint Venture Company 70.0% 70.0% Property Development

Country of Incorporation and Place of Business: China

(A) Shanghai Sian Jin Property Development Co., Ltd 100.0% 100.0% Property Development
(A) Shanghai Frasers Management Consultancy Co., Ltd 100.0% 100.0% Management Services
(A) Beijing Sin Hua Yan Real Estate Development Co., Ltd 95.0% 95.0% Property Development
(A) Hainan Jian Feng Tourism Development Co., Ltd 100.0% 100.0% Property Development
[All the above companies, incorporated in China, accounting year ends on 31 December]

Country of Incorporation and Place of Business: Hong Kong

(A) Metro Charm Holdings Limited 100.0% 100.0% Investment Holding

Country of Incorporation and Place of Business: Philippines

(C) Frasers Hospitality Philippines, Inc 100.0% 100.0% Provision of Management Services
[formerly Fraser Serviced Residences Philippines, Inc] in the Lodging Industry

Notes:
(A) Audited by Ernst & Young in the respective countries.
(B) Not required to be audited under the laws of the country of incorporation.
(C) Audited by other firms of auditors.

Fraser and Neave, Limited & Subsidiary Companies Annual Report 2006 173
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 September 2006

42. SUBSIDIARY, JOINT VENTURE AND ASSOCIATED COMPANIES (cont’d)

Effective
Shareholding
2006 2005 Principal Activities

SUBSIDIARY COMPANIES OF FRASERS CENTREPOINT GROUP (cont’d)

Country of Incorporation: Singapore

Place of Business: Australia
FCL Bridgepoint Pte Ltd 100.0% 100.0% Property Investment
[formerly CPL Bridgepoint Pte Ltd]

Country of Incorporation and Place of Business: Australia

(A) Frasers Glebe Point Pty Ltd 75.0% 75.0% Property Development
(A) Frasers Greencliff Developments Pty Ltd 75.0% 75.0% Management Services
(A) Frasers (Chandos) Pty Ltd 75.0% 75.0% Property Development
(A) Frasers Town Hall Pty Ltd 80.5% 80.5% Property Development
(A) Frasers Lorne Pty Limited 75.0% 75.0% Property Development
(A) Frasers Mandurah Pty Limited 56.3% 56.3% Property Development
(A) Frasers City Quarter Pty Limited 87.5% – Property Development
(A) Frasers Queens Pty Limited 87.5% – Property Development
(A) Frasers Killara Pty Ltd 75.0% – Property Development
(A) Frasers Town Hall Residences Pty Ltd 80.5% – Provision of Management Services in the
Lodging Industry
(A) Frasers Morton Pty Ltd 75.0% – Property Development

Country of Incorporation and Place of Business: New Zealand

(A) Frasers Broadview Ltd 75.0% 75.0% Property Development
(A) Frasers Papamoa Ltd 67.5% 67.5% Property Development

Country of Incorporation: Singapore

Place of Business: United Kingdom
FCL Resort Pte Ltd 75.0% 75.0% Property Development
[formerly CPL Resort Pte Ltd]

Country of Incorporation and Place of Business: United Kingdom

(C) Frasers Property Developments Limited 75.0% 75.0% Management Services
(C) Wandsworth Riverside Quarter Ltd 50.0% 50.0% Property Development
(C) Fairpoint Properties (Vincent Square) Ltd 50.0% 50.0% Property Development
(C) Frasers Hospitality (UK) Limited 62.5% 61.0% Management Consultancy Services &
[formerly Fraser Residences Ltd] Serviced Apartments
(C) Frasers Highbury Limited 75.0% – Property Development

Country of Incorporation and Place of Busines: British Virgin Islands

(B) Reaves Ltd 100.0% 100.0% Dormant

Notes:
(A) Audited by Ernst & Young in the respective countries.
(B) Not required to be audited under the laws of the country of incorporation.
(C) Audited by other firms of auditors.

174 Fraser and Neave, Limited & Subsidiary Companies Annual Report 2006
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 September 2006

42. SUBSIDIARY, JOINT VENTURE AND ASSOCIATED COMPANIES (cont’d)

Effective
Shareholding
2006 2005 Principal Activities

SUBSIDIARY COMPANIES OF TIMES PUBLISHING GROUP

Country of Incorporation and Place of Business: Singapore

Marshall Cavendish International Pte Ltd 100.0% 100.0% Investment Holding
Marshall Cavendish International (Asia) Pte Ltd 100.0% 100.0% Electronic Publishing
Marshall Cavendish International (Singapore) Pte Ltd 100.0% 100.0% Electronic Publishing
STP Distributors Pte Ltd 100.0% 100.0% Books and Magazines
Marshall Cavendish Business Information Pte Ltd 100.0% 100.0% Directory Publishing and Conferences &
[formerly Times Business Information Pte Ltd] Exhibitions
Times-Dharmala Pte Ltd 51.0% 51.0% Distribution of Books
Times Educational Services Pte Ltd 100.0% 100.0% Education and Training
Times Graphic Pte Ltd 100.0% 100.0% Commercial Printing
Times Conferences & Exhibitions Pte Ltd 100.0% 100.0% Dormant
Times Editions Pte Ltd 100.0% 100.0% Dormant
Panpac Education Pte Ltd 100.0% 100.0% Books
[formerly Times Media Pte Ltd]
TransQuest Asia Publishers Pte Ltd 100.0% 100.0% Dormant
[in voluntary liquidation]
(C) Cultured Lotus Pte Ltd 100.0% 100.0% Books and Magazines
IMM Singapore Holdings Pte Ltd 51.0% 51.0% Magazines Distribution
(C) Pansing Distribution Pte Ltd 100.0% 100.0% Books and Magazines
(C) Pansing International Library Services Pte Ltd 100.0% 100.0% Books and Magazines

Country of Incorporation: Singapore

Place of Business: Singapore and Malaysia
Times The Bookshop Pte Ltd 100.0% 100.0% Retail

Country of Incorporation: Singapore

Place of Business: Singapore, Australia, United Kingdom and United States of America
Times Printers Pte Ltd 100.0% 100.0% Commercial Printing

Country of Incorporation and Place of Business: Malaysia

(A) Eastern Universities Press (Malaysia) Sdn Bhd 60.0% 60.0% Dormant
[in voluntary liquidation]
(A) Marshall Cavendish (Malaysia) Sdn Bhd 100.0% 100.0% Books
(A) Pansing Marketing Sdn Bhd 100.0% 100.0% Distribution of Books & Magazines
(A) (1) STP Distributors (M) Sdn Bhd 30.0% 30.0% Books and Magazines
(A) Times Corporation Sdn Bhd 100.0% 100.0% Dormant
[in voluntary liquidation]
(A) Times Distri-Services Sdn Bhd 100.0% 100.0% Distribution of Books & Magazines
(A) Times Offset (Malaysia) Sdn Bhd 100.0% 100.0% Commercial Printing

Notes:
(A) Audited by Ernst & Young in the respective countries.
(B) Not required to be audited under the laws of the country of incorporation.
(C) Audited by other firms of auditors.
(1) Company is treated as a subsidiary of the Group by virtue of management control over financial and operating policies of the company.

Fraser and Neave, Limited & Subsidiary Companies Annual Report 2006 175
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 September 2006

42. SUBSIDIARY, JOINT VENTURE AND ASSOCIATED COMPANIES (cont’d)

Effective
Shareholding
2006 2005 Principal Activities

SUBSIDIARY COMPANIES OF TIMES PUBLISHING GROUP (cont’d)

Country of Incorporation: Hong Kong

Place of Business: Thailand
(A) Far East Publications Ltd 100.0% 100.0% Books

Country of Incorporation and Place of Business: Thailand

(A) Marshall Cavendish International (Thailand) Co. Ltd 49.0% 49.0% Publishing

Country of Incorporation and Place of Business: Hong Kong

(A) Educational Associates Ltd 100.0% 100.0% Investment Holding
(C) Everbest Printing Holdings Ltd 85.3% 85.3% Investment Holding
(C) Everbest Printing Investment Ltd 85.3% 85.3% Investment Holding
(C) Everbest Printing Company Ltd 85.3% 85.3% Printing
(A) Marshall Cavendish Business Information Private Limited 100.0% 100.0% Publishing
[formerly Times Business Information (Hong Kong) Ltd]
(A) Times Education (Hong Kong) Ltd 100.0% 100.0% Dormant
(A) Times Printers (Hong Kong) Ltd 100.0% 100.0% Investment Holding
(A) Times Publishing (Hong Kong) Ltd 100.0% 100.0% Books and Magazines
(A) United Publishers Services Ltd 100.0% 100.0% Books

Country of Incorporation: Hong Kong

Place of Business: Hong Kong and Taiwan
(A) Educational Technologies Limited 100.0% 100.0% Publishing and Distribution of Home Library

Country of Incorporation and Place of Business: China

(C) Everbest Printing (Panyu Nansha) Co. Ltd 85.3% 85.3% Property Investment
(A) Liaoning Times Xinhua Printers Ltd 51.0% 51.0% Commercial Printing
(A) Shenyang Times Packaging Printing Co Ltd 60.0% 60.0% Commercial Printing & Packaging
(C) Times Publications Design and Production (Beijing) Co., Ltd 100.0% 100.0% Publishing Design & Production Services
(C) Guangzhou Times Advertising Company Limited 100.0% 100.0% Publication and Distribution of Directories
(A) Shanxi Xinhua Times Packaging Printing Co Ltd 51.0% 51.0% Commercial Printing & Packaging
(C) Beijing 21st Century Times Education Centre 90.0% 90.0% Education and Training
(All the above companies, incorporated in China, accounting year ends on 31 December)

Country of Incorporation and Place of Business: Japan

(A) Kabushiki Kaisha Educational Technologies Limited 100.0% 100.0% Educational Training and Distribution of
Home Library Reference Books

Country of Incorporation and Place of Business: India

(A) Direct Educational Technologies India Pte Ltd 100.0% 100.0% Distribution of Home Library Reference
Books

Notes:
(A) Audited by Ernst & Young in the respective countries.
(B) Not required to be audited under the laws of the country of incorporation.
(C) Audited by other firms of auditors.

176 Fraser and Neave, Limited & Subsidiary Companies Annual Report 2006
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 September 2006

42. SUBSIDIARY, JOINT VENTURE AND ASSOCIATED COMPANIES (cont’d)

Effective
Shareholding
2006 2005 Principal Activities

SUBSIDIARY COMPANIES OF TIMES PUBLISHING GROUP (cont’d)

Country of Incorporation and Place of Business: Australia

(A) Times Printers (Australia) Pty Limited 100.0% 100.0% Commercial Printing
[formerly Argyle Times Graphics Pty Limited]
(A) Marshall Cavendish (Australia) Pty Ltd 100.0% 100.0% Dormant
(A) Musicway Corporation Ltd 100.0% 100.0% Distribution of Cassettes & Hi-fi
Accessories
(A) Rainbow Products Ltd 100.0% 100.0% Distribution of Records, Cassettes & Videos
(A) Times Properties Pty Limited 100.0% 100.0% Investment Holding
(A) Pansing IMM Pty Limited 51.0% 51.0% Magazines Distribution

Country of Incorporation: United Kingdom

Place of Business: Russia
(A) MC East Limited 100.0% 100.0% Partworks

Country of Incorporation and Place of Business: United Kingdom

(A) ALP Ltd 100.0% 100.0% Investment Holding
(A) Hazeldean Ltd 100.0% 100.0% Dormant
(A) Marshall Cavendish Ltd 100.0% 100.0% Investment Holding
(A) Shendene Ltd 100.0% 100.0% Dormant
(A) Marshall Cavendish International Ltd 100.0% 100.0% Partworks
(A) Marshall Cavendish Partworks Ltd 100.0% 100.0% Partworks
(A) TPL Printers (UK) Ltd 100.0% 100.0% Commercial Printing/Binders Manufacturing
(A) Marshall Cavendish Language Centre Ltd 100.0% 100.0% Dormant

Country of Incorporation and Place of Business: Czech Republic

(A) Marshall Cavendish CR,s.r.o. 100.0% 100.0% Partworks

Country of Incorporation and Place of Business: France

(A) Marshall Cavendish Editions S.A. 100.0% 100.0% Partworks

Country of Incorporation and Place of Business: Poland

(A) Marshall Cavendish Polska Sp. zo.o 100.0% 100.0% Partworks

Country of Incorporation and Place of Busines: Romania

(A) Marshall Cavendish Romania S.R.L 100.0% 100.0% Partworks

Country of Incorporation and Place of Business: Ukraine

(A) A Wholly Owned Subsidiary Marshall Cavendish Ukraine 100.0% 100.0% Partworks

Notes:
(A) Audited by Ernst & Young in the respective countries.
(B) Not required to be audited under the laws of the country of incorporation.
(C) Audited by other firms of auditors.

Fraser and Neave, Limited & Subsidiary Companies Annual Report 2006 177
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 September 2006

42. SUBSIDIARY, JOINT VENTURE AND ASSOCIATED COMPANIES (cont’d)

Effective
Shareholding
2006 2005 Principal Activities

SUBSIDIARY COMPANIES OF TIMES PUBLISHING GROUP (cont’d)

Country of Incorporation and Place of Business: United States of America

(B) Marshall Cavendish Corporation 100.0% 100.0% Books

SUBSIDIARY COMPANIES OF FRASERS PROPERTY (CHINA) LIMITED GROUP

Country of Incorporation and Place of Business: Hong Kong

(A) Vision Century Secretaries Limited 56.2% 55.0% Secretarial and Nominee Services
(A) Best Keeping Resources Limited 56.2% 55.0% Property and Golf Club Membership
Holding
(A) Great Project Property Limited 56.2% 55.0% Investment Holding
(A) Prosper Advance Investments Limited 56.2% 55.0% Property Development
(A) Readworld.com Limited 56.2% 55.0% Investment Holding
(A) Vision Century Administration Limited 56.2% 55.0% Management Consultancy Services
(A) Vision Century Capital Limited 56.2% 55.0% Group Financing
(A) Vision Century Investment (Dalian) Limited 56.2% 55.0% Investment Holding
(A) Wide Best Development Limited 56.2% 55.0% Property Development
(A) Vision Century Property Management Limited 56.2% 55.0% Property Management

Country of Incorporation: British Virgin Islands

Place of Business: Hong Kong
(B) Bestday Assets Limited 56.2% 55.0% Investment Holding
(B) Limbo Enterprise Limited 56.2% 55.0% Property Holding
(B) Tenways Investments Limited 56.2% 55.0% Investment Holding
(B) Vision Business Park (TH) Limited 56.2% 55.0% Investment Holding
(B) Vision Century Property Consultancy Services Ltd 56.2% 55.0% Property Consultancy Services

Country of Incorporation and Place of Business: China

(A) Shanghai Zhong Jun Real Estate Development Co. Ltd 72.2% 71.6% Property Development
(A) Beijing Gang Lu Real Estate Development Co. Ltd 56.2% 55.0% Property Development
(C) Beijing Vision Century Property Management Co. Ltd 56.2% 55.0% Property Management
(C) Vision Century Real Estate Development (Dalian) Co. Ltd 56.2% 55.0% Property Development
(C) Vision Property Management (Dalian) Co. Ltd 56.2% 55.0% Property Management
(A) Vision (Shenzhen) Business Park Co. Ltd 53.4% 52.3% Business Park Development
(C) Vision Huaqing (Beijing) Development Co. Ltd 33.7% 33.0% Business Park Development
[All the above companies, incorporated in China, accounting year ends on 31 December]

Country of Incorporation and Place of Business: British Virgin Islands

(A) Supreme Asia Investments Limited 76.0% 75.3% Investment Holding

Notes:
(A) Audited by Ernst & Young in the respective countries.
(B) Not required to be audited under the laws of the country of incorporation.
(C) Audited by other firms of auditors.

178 Fraser and Neave, Limited & Subsidiary Companies Annual Report 2006
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 September 2006

42. SUBSIDIARY, JOINT VENTURE AND ASSOCIATED COMPANIES (cont’d)

Effective
Shareholding
2006 2005 Principal Activities

JOINT VENTURE COMPANIES OF THE COMPANY

Country of Incorporation and Place of Business: Singapore

* Asia Pacific Investment Pte Ltd 50.0% 50.0% Investment Holding

JOINT VENTURE COMPANIES OF FRASERS CENTREPOINT GROUP

Country of Incorporation and Place of Business: Thailand

(A) Riverside Homes Development Co., Ltd 66.0% 49.0% Property Development

Country of Incorporation and Place of Business: Singapore

(A) FCL Peak Pte Ltd 50.0% – Property Development

JOINT VENTURE COMPANIES OF TIMES PUBLISHING GROUP

Country of Incorporation and Place of Business: Singapore

Times-Newslink 50.0% 50.0% Retail of Books and Magazines
[Accounting year ends on 31 December]

Country of Incorporation and Place of Business: China

(C) Shanghai Times Sanyin Printers Co Ltd 40.0% 40.0% Commercial Printing
[Accounting year ends on 31 December]

ASSOCIATED COMPANIES OF THE COMPANY

Country of Incorporation: Singapore

Place of Business: China
(C) China Dairy Group Ltd 29.5% 29.5% Manufacturing & Distribution of
[Accounting year ends on 31 December] Dairy Products

Country of Incorporation: Bermuda

Place of Business: China
(C) Fung Choi Media Group Limited 25.0% 27.1% Printing & Packaging
[formerly Fung Choi Printing and Packaging Group Limited]
[Accounting year ends on 30 June]

Notes:
(A) Audited by Ernst & Young in the respective countries.
(B) Not required to be audited under the laws of the country of incorporation.
(C) Audited by other firms of auditors.
* Asia Pacific Investment Pte Ltd (“APIPL”) which holds 64.8% of the issued capital of Asia Pacific Breweries Limited is owned equally by Fraser and Neave, Limited
and the Heineken group. Under the provisions of the Companies Act, Cap. 50, Fraser and Neave, Limited is the ultimate holding company by reason of its rights to
appoint a majority of the directors of APIPL.

Fraser and Neave, Limited & Subsidiary Companies Annual Report 2006 179
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 September 2006

42. SUBSIDIARY, JOINT VENTURE AND ASSOCIATED COMPANIES (cont’d)

Effective
Shareholding
2006 2005 Principal Activities

ASSOCIATED COMPANIES OF FRASERS CENTREPOINT GROUP

Country of Incorporation and Place of Business: United Kingdom

(C) Fairbrair Residential Investment Partnership 20.0% 20.0% Investment in Residential Property Fund
[Accounting year ends on 31 December]
(C) Fairdace Limited 33.3% 33.3% Property Ownership and Investment
[formerly Pressdale Ltd]
(C) FairBriar Holdings Limited 25.0% 25.0% Investment Holding
[formerly BidFair Limited]
(C) Islington Theatre Developments Limited 25.0% – Property Development

Country of Incorporation and Place of Business: Singapore

Hua Li Holdings Pte Ltd 45.7% 45.7% Investment Holding

Country of Incorporation and Place of Business: Thailand

(A) Krungthep Land Public Company Limited 33.0% – Property Development

ASSOCIATED COMPANIES OF TIMES PUBLISHING GROUP

Country of Incorporation and Place of Business: Singapore

(C) Learning Edvantage Pte Ltd 31.0% 31.0% Multi Media Publishing

Country of Incorporation and Place of Business: China

(C) Beijing Universal Times Culture Development Co Ltd 40.0% 40.0% Publishing
[Accounting year ends on 31 December]

SUBSIDIARY COMPANIES OF ASIA PACIFIC BREWERIES GROUP

Country of Incorporation and Place of Business: Singapore

Asia Pacific Breweries Limited 39.7% 37.4% Investment Holding and Management
Services
Asia Pacific Breweries (Singapore) Pte Ltd 39.7% 37.4% Brewing and Distribution of Beer
and Stout
Tiger Export Pte Ltd 39.7% 37.4% Export of Beer and Stout
Archipelago Brewery Co (1941) Pte Ltd 39.7% 37.4% Dormant
Tiger Marketing Pte Ltd 39.7% 37.4% Investment Holding
Heineken-APB (China) Pte Ltd 44.8% 43.7% Investment Holding

Country of Incorporation and Place of Business: Cambodia

(C) Cambodia Brewery Ltd 31.8% 29.9% Brewing and Distribution of Beer

Notes:
(A) Audited by Ernst & Young in the respective countries.
(B) Not required to be audited under the laws of the country of incorporation.
(C) Audited by other firms of auditors.

180 Fraser and Neave, Limited & Subsidiary Companies Annual Report 2006
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 September 2006

42. SUBSIDIARY, JOINT VENTURE AND ASSOCIATED COMPANIES (cont’d)

Effective
Shareholding
2006 2005 Principal Activities

SUBSIDIARY COMPANIES OF ASIA PACIFIC BREWERIES GROUP (cont’d)

Country of Incorporation and Place of Business: Vietnam

(A) Vietnam Brewery Ltd 23.8% 22.4% Brewing and Distribution of Beer
(A) Hatay Brewery Ltd 39.7% 37.4% Brewing and Distribution of Beer
(A) Beers and Beverages International Ltd 39.7% – Distribution of Beer
(C) Foster’s Vietnam Co., Ltd 39.7% – Distribution of Beer
(C) Foster’s Da Nang Co., Ltd 39.7% – Brewing of Beer
(C) Foster’s Tien Giang Co., Ltd 39.7% – Brewing of Beer

Country of Incorporation and Place of Business: China

(A) Hainan Asia Pacific Brewery Co Ltd 44.8% 43.7% Brewing and Distribution of Beer
(A) Shanghai Asia Pacific Brewery Co Ltd 43.5% 42.4% Brewing and Distribution of Beer
(A) Heineken Trading (Shanghai) Co Ltd 44.8% 43.7% Distribution of Beer
(A) Heineken-APB (China) Management Services Co Ltd 44.8% 43.7% Provision of Investment, Management and
[All the above companies, incorporated in China, accounting year ends on 31 December] Consulting Services

Country of Incorporation and Place of Business: India

(C) Asia Pacific Breweries (India) Private Ltd 39.7% 37.4% Dormant
(A) Aurangabad Breweries Limited 30.2% 28.4% Brewing and Distribution of beer
(B) Asia Pacific Breweries – Pearl Breweries Pte Limited 26.6% – Brewing and Distribution of beer

Country of Incorporation and Place of Business: Sri Lanka

(A) APB Lanka Ltd 23.8% 22.4% Brewing and Distribution of Beer
[formerly United Breweries Lanka Limited]

Country of Incorporation and Place of Business: New Zealand

(A) DB Breweries Ltd 39.7% 37.4% Investment Holding and Brewing and
Distribution of Beer
(A) DB Nominees Ltd 39.7% 37.4% Trustee Company
(A) DB South Island Brewery Ltd 21.7% 20.5% Brewing and Distribution of Beer
(A) DBG Insurances Ltd 39.7% 37.4% Insurance Company
(A) Liquorland Ltd 39.7% 37.4% Franchise Manager
(A) Monteith’s Brewing Company Ltd 39.7% 37.4% Dormant
(A) Robbie Burns Ltd 39.7% 37.4% Dormant
(A) Tui Brewery Ltd 39.7% 37.4% Dormant
(A) Black Dog Brewery Ltd 39.7% 37.4% Dormant
(A) O Pure Water Ltd 39.7% 37.4% Dormant
(A) Mainland Brewery Ltd 39.7% 37.4% Dormant
(A) Waitemata Brewery Ltd 39.7% 37.4% Dormant

Notes:
(A) Audited by Ernst & Young in the respective countries.
(B) Not required to be audited under the laws of the country of incorporation.
(C) Audited by other firms of auditors.

Fraser and Neave, Limited & Subsidiary Companies Annual Report 2006 181
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 September 2006

42. SUBSIDIARY, JOINT VENTURE AND ASSOCIATED COMPANIES (cont’d)

Effective
Shareholding
2006 2005 Principal Activities

SUBSIDIARY COMPANIES OF ASIA PACIFIC BREWERIES GROUP (cont’d)

Country of Incorporation and Place of Business: Papua New Guinea

(C) South Pacific Brewery Ltd 30.1% 28.4% Brewing and Distribution of Beer

Country of Incorporation and Place of Business: United Kingdom

(C) Tiger Beer UK Ltd 39.7% 37.4% Distribution of Beer and Stout

Country of Incorporation and Place of Business: United States of America

(C) Tiger Beer USA Inc 39.7% 37.4% Distribution of Beer

Country of Incorporation and Place of Business: Mongolia

(B) MCS Asia Pacific Brewery 21.8% – Distribution of Beer

Country of Incorporation and Place of Business: Australia

(B) Asia Pacific Breweries (Australia) Pty Ltd 39.7% – Investment Holding
(B) FBG Vietnam Holdings Pty Ltd 39.7% – Investment Holding

JOINT VENTURE COMPANIES OF ASIA PACIFIC BREWERIES GROUP

Country of Incorporation and Place of Business: Singapore

(C) GAPL Pte Ltd 19.8% 18.7% Investment Holding & Distribution of Stout

Country of Incorporation and Place of Business: China

(C) Jiangsu DaFuHao Breweries Co. Ltd 22.0% 17.5% Brewing and Distribution of Beer
[Accounting year ends on 31 December]

Country of Incorporation and Place of Business: Thailand

(C) Thai Asia Pacific Brewery Co Ltd 13.9% 13.1% Brewing and Distribution of Beer
(C) Thai Asia Pacific Trading Co Ltd 13.9% 13.1% Distribution of Beer

ASSOCIATED COMPANIES OF ASIA PACIFIC BREWERIES GROUP

Country of Incorporation and Place of Business: New Zealand

(A) The Associated Bottlers Company Ltd 19.8% 18.7% Hire of Returnable Beer Bottles

Country of Incorporation: Bermuda

Place of Business: Hong Kong
(A) Kingway Brewery Holdings Limited 9.6% 9.4% Brewing and Distribution of Beer
[Accounting year ends on 31 December]

Notes:
(A) Audited by Ernst & Young in the respective countries.
(B) Not required to be audited under the laws of the country of incorporation.
(C) Audited by other firms of auditors.

182 Fraser and Neave, Limited & Subsidiary Companies Annual Report 2006
PARTICULARS OF GROUP PROPERTIES

The main properties as at 30 September 2006 and their net book values are indicated below:
(“F&N” refers to Fraser and Neave Group, “APBL” refers to Asia Pacific Breweries Group, “FCL” refers to Frasers Centrepoint
Limited Group , “TPL” refers to Times Publishing Group and “FPCL” refers to Frasers Property (China) Limited)

(A) CLASSIFIED AS GROUP FIXED ASSETS

(Note 13 to the Financial Statements)

Land Building
($’000) ($’000)

FREEHOLD
Singapore
F&N – Other properties 29 –

TPL – 1.1 hectares industrial property at Times Centre, 1 New Industrial Road 6,100 6,497

APBL – Other properties 412 –

Peninsular Malaysia
F&N – 18.0 hectares industrial property at Lion Industrial Park, Shah Alam 20,928 29,162
– 2.1 hectares industrial property at 3724 to 3726 Sungei Nyior, Butterworth 2,033 1,033
– 2.7 hectares industrial property at Jln Lahat, Ipoh 1,213 1,111
– 5.8 hectares industrial property at Jln Tampoi, Johor Bahru 2,268 3,336
– 0.6 hectare industrial property at Jln Liat, Seremban 1,478 124
– 0.6 hectare industrial property at Jln Tampoi, Johor Bahru 452 1,756
– 1.1 hectares vacant land, Johor Bahru 8,358 –
– Other properties 193 1,547

TPL – 3.4 hectares industrial property at Lot 46 Subang Hi-Tech Industrial Park,
Batu Tiga, Shah Alam 1,659 3,297

East Malaysia
F&N – 1.1 hectares industrial property at Matang Land District, Sarawak 1,886 803

Thailand
F&N – 9.1 hectares industrial property at Amphur Nong Khae, Saraburi Province 4,313 –

New Zealand
APBL – 17.4 hectares industrial property for Waitemata Brewery site at Auckland 3,736 20,419
– 9.1 hectares industrial property for Mainland Brewery at Timaru 164 2,153
– 10.8 hectares industrial property for Tui Brewery at Pahiatua 326 –
– 7.0 hectares industrial property for Aurangabad Brewery at Arlem, Goa 1,553 762

Australia
TPL – 0.2 hectare commercial property at Unites 7 & 8 Monash Business Park,
29 Business Park Drive, Nottinghill, Melbourne – Victoria 913 471
– 1.7 hectares industrial property at 1 Diamond Drive, Sunshine – Victoria 1,269 12,200

United States of America

TPL – 3.4 hectares commercial property at 99 White Plains Road, Tarrytown,
New York 792 4,151

Total Freehold 60,075 88,822

Fraser and Neave, Limited & Subsidiary Companies Annual Report 2006 183
PARTICULARS OF GROUP PROPERTIES

(A) CLASSIFIED AS GROUP FIXED ASSETS (cont’d)

(Note 13 to the Financial Statements)

Land Building
($’000) ($’000)

LEASEHOLD
Singapore
F&N – 4.0 hectares industrial property at 214 Pandan Loop
(Lease expires year 2010) – 15,504
– Other properties 2,186 –

APBL – 8.8 hectares industrial property at Jurong

(Lease expires year 2046) – 19,796
– Other properties 1,271 –

TPL – Commercial property at Unit #04-08/11 Centrepoint

(Lease expires year 2078) – 564
– 1.8 hectares industrial property at 16 & 18 Tuas Avenue 5
(Lease expires year 2013) – 15,712
– 0.7 hectare industrial property at 438 Ang Mo Kio industrial park
(Lease expires year 2038) – 6,401
– 1.2 hectares warehouse at No. 24 Senoko Drive
(Lease expires year 2011) 906 –

Peninsular Malaysia
F&N – 3.6 hectares industrial property at 70 Jln University, Petaling Jaya
(Lease expires year 2058) 8,684 7,408
– 1.6 hectares industrial property at 16 Jln Bersatu 13/4, Petaling Jaya
(Lease expires year 2058) 4,584 2,083
– 1.9 hectares industrial property at Lot 5, Jalan Kilang,
460500 Petaling Jaya, State 3136
(Lease expires year 2058) 2,959 1,785
– Other properties 1,296 520

East Malaysia
F&N – 1.8 hectares industrial property at Penrissen Road, Kuching
(Lease expires year 2038) 742 3,110
– 2.6 hectares industrial property at Tuaran Road, Kota Kinabalu
(Lease expires year 2062) 1,378 855
– 1.2 hectares industrial property at KNLD, Kuching
(Lease expires year 2038) 3,270 –
– 2.4 hectares industrial property at Matang Land District, Sarawak
(Lease expires year 2038) 2,257 291
– Other properties 268 381

Cambodia
APBL – 11.3 hectares industrial property at Kandal Province
(Land rights expires year 2065) – 8,226

184 Fraser and Neave, Limited & Subsidiary Companies Annual Report 2006
PARTICULARS OF GROUP PROPERTIES

(A) CLASSIFIED AS GROUP FIXED ASSETS (cont’d)

(Note 13 to the Financial Statements)

Land Building
($’000) ($’000)

LEASEHOLD (cont’d)
Vietnam
F&N – 3.4 hectares industrial property at Ton That Thuyet, Vietnam
(Lease expires year 2006) 113 3,958
– 6.0 hectares industrial property at VSIP, Thuan An District,
Binh Duong Province
(Lease expires year 2045) 5,582 6,144

APBL – 13.0 hectares industrial property at Ho Chi Minh City

(Lease expires year 2021) 2,240 8,258
– 30.0 hectares industrial property at Van Tao Village – Ha Tay Province
(Lease expires year 2046) – 10,276
– 5.1 hectares industrial property at Foster’s Brewery – Tien Giang Province
(Lease expires year 2022) – 1,432
– 4.8 hectares industrial property at Foster’s Brewery – Danang City
(Lease expires year 2024) 138 1,497
– 1.0 hectare industrial property at Foster’s Brewery – Ho Chi Minh City
(Lease expires year 2010) – 90

Thailand
F&N – 0.9 hectare industrial property at No.19/111 Moo 7 Thakarm Road,
Samaedam, Bangkhuntien, Bangkok 10150
(Lease expires year 2029) 550 2,513

TPL – Warehouse at Soi Wat Kok #20/526-527, Rama II Road, Bangkok

(Lease expires year 2021) – 47

Myanmar
F&N – 5.0 hectares industrial property at Mingaladon Township, Yangon
(Lease expires year 2023) 2,017 11,036

China/Hong Kong
F&N – Residential property at Liu Shu Town, SheHong Country, Sichuan Province, China
(Lease expires year 2058) – 45

APBL – 20.0 hectares industrial property at Haikou, Hainan, China

(Lease expires year 2065) 5,127 17,097
– 11.0 hectares industrial property at Shanghai, China
(Lease expires year 2038) 5,388 8,888

TPL – Residential property at Unite 1AF Riverside Garden, Shenyang, China – 207
– Residential property at Vanke Garden, Shenyang, China – 103
– 0.4 hectare industrial property at 13A Xingshun Street, Tiexi District,
Shenyang, China
(Lease expires year 2009) 43 724

Fraser and Neave, Limited & Subsidiary Companies Annual Report 2006 185
PARTICULARS OF GROUP PROPERTIES

(A) CLASSIFIED AS GROUP FIXED ASSETS (cont’d)

(Note 13 to the Financial Statements)

Land Building
($’000) ($’000)

LEASEHOLD (cont’d)
China/Hong Kong (cont’d)
TPL – Warehouse at Unit D, 2nd Floor, Freder Centre, 68 Sung Wong Toi Road,
Tokwawan, Kowloon, Hong Kong
(Lease expires year 2022) – 117
– Industrial property at Dachong Western Industrial District, Nansha Panyu,
Guangdong, China
(Lease expires year 2044) 1,414 8,046
– Industrial property at Unit A1,C5, Ko Fai Industrial Building
7 Ko Fai Road, Yau Tong, Kowloon, Hong Kong
(Lease expires year 2048) – 661
– 1.9 hectares commercial property at 18 Jianshe Zhong Road, China 3,483 3,039
– Factory at 665 Kong Jiang Road, Yang Pu District, Shanghai 200093
(Lease expires year 2030) 568 2,393
– Factory at 1 Zhao Yu Street, Yuci Economic Development Zone,
Jin Zhong City, Shanxi Province
(Lease expires year 2026) – 864

FPCL – Residential property at Shenzhen, China 230 749

Papua New Guinea

APBL – 2.2 hectares industrial property at Port Moresby
(Lease expires year 2067) 818 4,183
– 7.7 hectares industrial property at Lae and Goroka
(Lease expires year 2057 and year 2067) 226 325
– 1.0 hectare residential properties
(Lease expires year 2057 and year 2071) 82 105

Sri Lanka
APBL – 2.3 hectares industrial property at Mawathagama
(Lease expires year 2027) 23 386

India
APBL – 7.0 hectares industrial property at Waluj, Aurangabad, Maharashtra
(Lease expires year 2028) 113 585

Total Leasehold 57,956 176,404

TOTAL PROPERTIES (CLASSIFIED AS GROUP FIXED ASSETS) 118,031 265,226

186 Fraser and Neave, Limited & Subsidiary Companies Annual Report 2006
PARTICULARS OF GROUP PROPERTIES

(B) CLASSIFIED AS GROUP INVESTMENT PROPERTIES

(Note 14 to the Financial Statements)

Land Building
($’000) ($’000)

Singapore
FCL – A 24-storey office building at 438 Alexandra Road,
Freehold lettable area – 18,408 sqm 79,130 55,350

– Retained interests (excluding apartments) in a 7-storey shopping cum

residential complex with 2 basement floors at Centrepoint,
176 Orchard Road
Freehold and Leasehold (lease expires year 2078),
lettable area – 30,959 sqm 423,130 86,862

– Retained interests in a 4-storey shopping complex with 2 basement

shopping levels and one basement carpark at 930, Yishun Avenue 2
Leasehold (Lease expires year 2089), lettable area – 13,865 sqm 207,900 55,100

– A 2-storey shopping complex at 368 & 370 Alexandra Road, situated

on the 1st storey and 1st basement level of a 5-storey commercial
cum residential block and a 2-storey free-standing restaurant building
Freehold, lettable area – 6,596 sqm 16,420 21,580

– Two 8-storey high-tech industrial building with basement carpark at

438A and 438B Alexandra Road
Freehold, lettable area – 97,166 sqm 179,010 168,590

– A 10-storey commercial cum serviced apartment complex at Robertson

Walk Shopping Centre and Fraser Place Serviced Residences,
11 Unity Street, with 2 basement carparks comprising a 2-storey
retail podium and serviced apartment units
Leasehold (999 years)
Lettable area: Retail 9,068 sqm
Serviced apartments 14,293 sqm

Total 23,361 sqm 121,320 68,980

– A 7-storey shopping/entertainment complex at 1, Woodlands Square

with 3 basement floors (comprising 2 basement carparks and
1 basement shop)
Leasehold (Lease expires year 2094), lettable area – 39,506 sqm 479,400 155,600

– A 20-storey commercial cum serviced apartment complex with a 3-storey

covered carpark, a 5-storey podium block, a 2-storey retail podium
and serviced apartment units at River Valley Road
Leasehold (999 years)
Lettable area: Retail 3,699 sqm
Serviced apartments 20,232 sqm
Office 16,937 sqm

Total 40,868 sqm 231,180 132,220

– Other properties 497 928

Fraser and Neave, Limited & Subsidiary Companies Annual Report 2006 187
PARTICULARS OF GROUP PROPERTIES

(B) CLASSIFIED AS GROUP INVESTMENT PROPERTIES (cont’d)

(Note 14 to the Financial Statements)

Land Building
($’000) ($’000)

Vietnam
FCL – A 22-storey retail/office building plus 2 basements at 2 Ngoc Duc Ke Street,
District 1, Ho Chi Minh City
Leasehold (Lease expires year 2045), lettable area – 18,555 sqm 2,990 32,352

China
FPCL – A 5-storey building for I.T research and development centres and offices, and
for ancillary uses at Shenzhen Hi-Tech Industrial Park GaoXin South Ring
Road/ Keji South Road, ShenZhen
Leasehold (Lease expires year 2049), lettable area – 69,248 sqm 2,356 55,987

– A 13-storey office and/or research and development facilities with two levels
of basement car parks and ancillary facilities at Tsinghua Science Park
No 1 Zhongguancun East Road, Haidian District, Beijing
Leasehold (Lease expires year 2053), lettable area – 33,090 sqm 56,518 20,621

Hong Kong
TPL – Shop unit at Houston Centre, Tsimshatsui East, Kowloon
Leasehold (Lease expires year 2053), lettable area – 68 sqm – 509

– Offices at Seaview Estate – 10th Floor

Block C, No. 8 Watson Road, North Point, Hong Kong
(Lease expires year 2057), lettable area 1,052 sqm – 4,680

– Offices at Seaview Estate – 9th Floor

Block C, No. 8 Watson Road, North Point, Hong Kong
(Lease expires year 2056), lettable area 1,052 sqm – 4,579

Australia
FCL – Bridgepoint Shopping Centre, MosMan, Sydney
Freehold, lettable area – 6,672 sqm 25,470 18,757

TOTAL PROPERTIES (CLASSIFIED AS INVESTMENT PROPERTIES) 1,825,321 882,695

188 Fraser and Neave, Limited & Subsidiary Companies Annual Report 2006
PARTICULARS OF GROUP PROPERTIES

(C) CLASSIFIED AS PROPERTIES HELD FOR SALES

(Note 24 to the Financial Statements)

Effective Group
interest
%

Singapore
FCL – The Petal
Freehold land of approximately 20,454.4 square metres situated at 85 Hillview Avenue.
The development has a gross floor area of 39,365 sqm and consists of 270 condominium units. 100

– Euphony Gardens
Leasehold land of approximately 26,383.6 square metres situated at Jalan Mata Ayer.
The development has a gross floor area of 36,937 sqm and consists of 304 condominium units. 100

– Yishun Sapphire
Leasehold land of approximately 22,383 square metres situated at Yishun.
The development has a gross floor area of 47,004 sqm and consists of 380 condominium units. 100

– Yishun Emerald
Leasehold land of approximately 21,038.5 square metres situated at Yishun.
The development has a gross floor area of 52,596 sqm and consists of 436 condominium units. 100

– Compass Heights
Leasehold land of approximately 27,067.3 square metres situated at Sengkang Square for a
mixed development comprising a block of 4-storey commercial building with 4 basements and
2 blocks of 15-storey, 536 condominium units.
The condominium development has a gross floor area of 68,209 sqm. 100

– Lake Holmz
Leasehold land of approximately 17,000 square metres situated at Boon Lay Way/Corporation
Road.
The development has a gross floor area of 48,455 sqm and consists of 369 condominium units. 100

– Ris Grandeur
Freehold land of approximately 26,441.5 square metres situated at Elias Road.
The development has a gross floor area of 60,968 square metres and consists of
453 condominium units. 80

Australia
FCL – The Habitat
Freehold land of approximately 862 square metres situated at Chandos Streets, North Sydney.
The development has a gross floor area of 7,855 sqm and consists of 60 condominium units. 75

Peninsular Malaysia
TPL – Freehold commerical property of approximately 645 sqm situated at 59/61 Jalan Nilam 1/2,
Subang Square, Subang Hi-Tech Industrial Park, 40000 Shah Alam 30

– Leasehold commercial property of approximately 395 sqm situated at LG-28 Queensbay

Megamall, Penang (formerly known as Bayan World Megamall) 30

Fraser and Neave, Limited & Subsidiary Companies Annual Report 2006 189
PARTICULARS OF GROUP PROPERTIES

(C) CLASSIFIED AS PROPERTIES HELD FOR SALES (cont’d)

(Note 24 to the Financial Statements)

Effective Group
interest
%

China/Hong Kong
FPCL – Scenic Place
Leasehold land of approximately 26,052 square metres situated at No.305 Guang An Men
Wai Avenue.
The development has a gross floor area of 95,855 sqm and consists of 788 residential units
and 154 carpark lots. 56

– Ninth ZhongShan
Leasehold land of approximately 73,152 square metres situated at No.2 Xinglin Street
Zhongshan District.
The development has a gross floor area of 63,054 sqm and consists of 439 residential units
and 107 carpark lots. 56

– Greenery Place
Leasehold land of approximately 6,796 square metres situated at Town Park Road South,
Yuan Long, Hong Kong.
The development has a gross floor area of 22,106 sqm and consists of 330 residential units
and 133 carpark lots. 56

United Kingdom
FCL – Wandsworth
Freehold land of approximately 40,000 square metres situated at South Bank of River Thames.
The development has a gross floor area of 27,000 sqm and consists of 402 condominium units. 50

TPL – Freehold property of approximately 15,817 square metres situated at Hartlebury, Worcestershire. 100

190 Fraser and Neave, Limited & Subsidiary Companies Annual Report 2006
PARTICULARS OF GROUP PROPERTIES

(D) CLASSIFIED AS PROPERTIES UNDER DEVELOPMENT

(Note 14 to the Financial Statements)

Details of the properties under development are included in Note 14 to the Financial Statements.
Additional information as follows:
Stage of Estimated Date
Completion of Completion

Singapore
FCL – Quintet 95% 1st Quarter FY 2007
– Tangerine Grove 72% 2nd Quarter FY 2007
– 8 @ Mount Sophia 69% 3rd Quarter FY 2007
– Holland Park 27% 1st Quarter FY 2008
– St Thomas Walk – –
– The Raintree 36% 2nd Quarter FY 2008
– The Azure 32% 2nd Quarter FY 2008
– One Leicester 30% 2nd Quarter FY 2008
– West Coast Park Site 23% 3rd Quarter FY 2008
– The Infiniti 23% 3rd Quarter FY 2008
– Yishun Central Site – 1st Quarter FY 2009
– One St Michael’s 5% 2nd Quarter FY 2009
– Sensoria 73% 2nd Quarter FY 2009
– One Jervois 14% 3rd Quarter FY 2009
Malaysia
F&N – Fraser Park 95% 1st Quarter FY 2007
– Jalan Yew, Kuala Lumpur site – –
– Jalan Ampang, Kuala Lumpur site – –
Vietnam
FCL – Nguyen Sieu Street Site – –
Thailand
FCL – The Pano 10% 3rd Quarter FY 2009
Australia
FCL – Regent Theatre Site 56% 3rd Quarter FY 2008
– Wanjeep Street Site – –
– Lorne Avenue Site – –
– City Quarter Site – –
– Queen’s Precint Site – –
– Morton Site – –
China
FCL – Jingan Four Seasons (Wu Jiang Lu Site) 61% 1st Quarter FY 2007
– Xi Cheng Site – 3rd Quarter FY 2008
– Teng Qiao He Chu Hai Kou Site – –
FPCL – Scenic Place Phase 2 – –
– Vision (ShenZhen) Business Park Phase 2B and 3 – 4th Quarter FY 2007
– Song Jiang Site – –
New Zealand
FCL – Broadview Queenstown Site – –
– Tauranga in the Bay of Plenty – –
United Kingdom
FCL – Vincent Square 74% 1st Quarter FY 2007
– Wandsworth Site – 3rd Quarter FY 2008

Fraser and Neave, Limited & Subsidiary Companies Annual Report 2006 191