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NOEL Annual Report 2002

Corporate Profile

S ince its inception in August 1983 as a private exempt company, Noel hasgrown from strength to strength in the business of gifts, hampers and floralarrangements. In 1993, the Company was listed on the Singapore Exchange andbecame officially known as Noel Gifts International Limited.

Whilst the Company’s principal activities remained in the field of design,marketing and distribution of floral arrangements, gifts and hampers, Noel is nolonger an ordinary player in the gifts industry. Noel has strived hard and hassince gained recognition as a Company that provides more than mere gifts. TheCompany’s strength lies in its belief in providing the intangibles that come withthe gifts, the smiles of appreciation and joy; the thoughts of love and care. It isthis belief that has also propelled Noel to operate franchises in neighbouringcountries like Malaysia, Thailand and Jakarta.

The Company has also ventured past its gifts domain. Noel now owns twoindustrial buildings and the Company’s first foray into the local residentialproperty development scene has been completed in August 2002. The residentialproject at prime location Balmoral Crescent marked a milestone in Noel’s questto further diversify its interests.

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The results are significant as it is a sign that the gifting division has returned toprofitability despite the difficult retail environment. Our improvement in results can be

attributed mainly to better profit margins and lower expenses due to stringent costcutting measures implemented by our committed and dedicated management team.

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Managing Director’s Message

We are pleased to announce that during the financial year ended June 30, 2002, our group net profit improvedby 62.6% to S$1.04 million, in spite of a 9.5% reduced turnover of S$17.06 million. This was encouragingas they were achieved against the backdrop of intense competition and a regional slowdown in the retailsector. The results are significant as it is a sign that the gifting division has returned to profitability despitethe difficult retail environment.

Our improvement in results can be attributed mainly to better profit margins and lower expenses due tostringent cost cutting measures implemented by our committed and dedicated management team. We willcontinue our vigilant approach to our cost structure and continue to put effective market management atthe top of our agenda. To all our clients, we would like to thank you for your continued patronage andsupport. Going forward, we would work even harder to present you with more attractive products, caringservice and creative packages to meet your needs and expectations.

Building Our Niche Business

For our property division, our two industrial buildings currently enjoy full occupancy. This is a testimonyto our belief in our ‘We Care’ posture. With quality development planning, a practical design brief and anexcellent maintenance program, we have established a successful niche even in the current depressedindustrial property environment.

We are also grateful to our loyal MNC and local tenants for their confidence and endorsement in ourmanagement and products, and most of all, for their continuous and positive feedback.

For our joint venture residential development Balmoral Crest, located at No. 1 Balmoral Crescent, theTemporary Occupation Permit was issued in August 2002. We look forward to improved sales for theremaining of this financial year.

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Creating Value for Our Customers

Over the past year, we have strived to provide innovative gift ideas and services to our customers. We carefor our customers and deliver more than just gifts and flowers, often going one step further to add value toour customers. For example, we are proud to be the FIRST in the gifting industry to introduce the ‘callback’service - where customers can request to be informed within 60 minutes of delivery of gift via SMS, emailor phone call.

Our internet website Noelgifts.com also has an eCommunity program where we tie up with strategic partnersfor special promotions, so as to offer shoppers a pleasant online shopping experience.

Our website also regularly incorporates new features to create value for our customers, the latest being afree reminder service for special occasions like birthdays of friends and families.

Caring for Our Larger Community

At Noel, we also believe in making a difference to our community. In the course of the year, the Group hasbeen involved in various projects and activities to help the less fortunate. We donated part of the proceedsfrom the sale of Noel gifts to Bethesda Care & Counselling Services Centre, amounting to S$100,000. Intotal, we raised S$250,000 together with other corporate and individual well-wishers, which would go towardsthe funding of relevant and integrated social services such as instilling values and coping skills to thedisadvantaged in the community. We also partnered Compaq in their charity drive to raise funds for thebeneficiaries of Compaq’s designated charities such as TOUCH Home Care, Canossian School of theHearing Impaired, Singapore School for the Visually Handicapped, SILRA Home and MINDS(Lee Kong Chian Gardens School).

Noel also commemorated Mother’s Day by collaborating with the Southeast Community DevelopmentCouncil (Marine Parade) to present special hampers to extraordinary mothers who had given all theirlove, sacrifices and encouragement to their children with special needs.

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Alfred Wong Siu HongManaging Director

A Word of Appreciation to Our Shareholders

To our shareholders, we want to thank them for their stalwart support in the most direct manner - strivingfor improved profit and maintaining the already high dividend payout. For the financial year ended June30, 2002, we declared a dividend yield of 8.8%. We are therefore gratified that the Business Times(in a report dated October 9, 2002) listed Noel Gifts’ dividend yield as the second highest among the 69Singapore-listed companies reporting full-year results for the financial year ended June 30, 2002.

On behalf of the Board of Directors, I would like to express my heartfelt gratitude to all my colleagues,staff and partners for their continued contribution, support and encouragement. Our improved performanceis a result of your commitment, hard work and faith in our business.

Looking to the future, the management expects the present difficult trading conditions to continue, butour property division will continue to enjoy stable rental income from its freehold and leasehold properties.Barring unforeseen circumstances and provided the state of the property market does not deterioratefurther, we expect to remain profitable in the current financial year.


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Board of Directors

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Board of Directors

Executive Directors1

Alfred Wong Siu HongManaging Director

He is a member of the Audit Committee.

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Ivy Wong Phui HongDeputy Managing Director

She is also the Company Secretary.

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James Wong Koon HongExecutive Director

Non-Executive Directors4

Freddie Heng Kim ChuanChairman of the Audit Committee

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Paul Chan Kwai WahManaging Director, Asia Pacific & Senior Vice President, Enterprise Systems Group of Hewlett-Packard Company

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Koh Soo KeongPresident & CEO of both Singapore Technologies Logistics Pte Ltd and SembCorp Logistics Ltd

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Edward LimDirector of Citigate Dewe Rogerson, iMage Pte Ltd

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Our mission goes beyond meeting the needs and expectations of our customers and therecipients of our products and services. We also aspire to further deepen our

relationships with our customers by providing value-added services.

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Bringing People Closer

At Noel, we pride ourselves to be at the forefront of bringing people closer. Our mission goes beyondmeeting the needs and expectations of our customers and the recipients of our products and services. Wealso aspire to further deepen our relationships with our customers by providing value-added services. Toaccomplish this objective, our marketing and sales teams meet up regularly with our customers to gatherfeedback.

The ‘callback’ service - a FIRST in the gifting industry - was among the many new initiatives implementedas a result of customers’ feedback. At the request of our customers, they will be informed within 60minutes of delivery of gift via SMS, email or phone call. With this, our customers enjoy ‘peace of mind’, yetanother distinctive attribute of the Noel service.

Below are two out of the many compliments we received from our valued customers on how we havedelighted them or their recipients.

“I would like to comment on your wonderful service I experienced recently. I won a gift voucher and I wasdisappointed to hear from the vendor that they are fully booked for Valentine’s Day. Thankfully, your staff,Winnie, provided much help that went beyond her call of duty. She was polite, prompt and puts in everyeffort to ensure we get our reservation for the big day. Your service certainly impressed us and you areassured of a new loyal customer.” - Mr Andy Low

“It’s very encouraging to hear from receivers that your flowers are fresh and the arrangement is verypresentable. They are very pleased and happy. Your service is also prompt and efficient. Well done and keepup the good service!” - Ms Florence Chua, Singapore Polytechnic

Noel Gifts constantly strives to improve our products and services as we take pride in delighting ourcustomers.

Indeed, bringing people closer is our mission, and we believe the above factors contributed to the returnto profitability of the gifting business, despite the difficult and depressed retail environment.

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Encouraged by good growth over the years, Noelgifts.com underwent numerousexciting and innovative changes including contests and online services... Noelgifts.com

is constantly evolving so as to create value for friends of Noel.

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Bringing the World Closer

Encouraged by good growth over the years, Noelgifts.com underwent numerous exciting and innovative

changes including contests and online services. Leveraging on our technology, we organised a SMS con-

test which we ran concurrently with advertisements on MRT trains island-wide, so that site visitors are

able to enjoy a pleasant and enriching shopping experience with Noelgifts.com.

Many strategic partners were added to provide customers with special promotions for the eCommunity

program. The program was launched in conjunction with Marcx Accessories, KFC, Pizza Hut and Safe

Superstore as participating merchants.

Being a creative gift company, Noelgifts.com is constantly evolving so as to create value for friends of

Noel. Now, a Noel friend can enjoy the free reminder service for special occasions like friends’ and families’

birthdays via email. Customers can also purchase eVouchers as gifts.

Noelgifts.com also works with florists from around the world to cater to requests for online overseas

delivery. This is our way of bringing the world closer.

The results are significant as it is a sign that the giftingdivision has turned around despite the difficult retail

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We strongly believe that it is through our dynamic and pro-active marketing efforts,and our ‘We Care’ posture that resulted in our full occupancy. Other contributingfactors include quality development planning, a practical design brief as well as anexcellent maintenance program. With these success factors in place, we successfully

carved a niche for ourselves in the depressed industrial property environment.

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Bringing Services Closer

We currently enjoy full occupancy for both industrial properties at 50 Kallang Avenue & 50 Playfair Road.

We strongly believe that it is through our dynamic and pro-active marketing efforts, and our ‘We Care’posture that resulted in our full occupancy. Other contributing factors include quality development planning,a practical design brief as well as an excellent maintenance program. With these success factors in place,we successfully carved a niche for ourselves in the depressed industrial property environment.

To better serve our tenants, our professional in-house management and maintenance team will continueto maintain a close relationship with our tenants. We will gather feedback to meet their needs andexpectations and strive towards greater user-satisfaction. With our tenants’ support and endorsement, weare confident our properties will remain sought after by MNCs and local firms.

As the proposed MRT Circle Line is expected to be completed in 2006, we shall be reviewing our optionsfor the freehold strata units at 50 Playfair Road, located near the new Upper Paya Lebar MRT station.And upon completion of the station, the value of these units is expected to be enhanced considerably.

As for our joint-venture residential development, Balmoral Crest, located at No.1 Balmoral Crescent, theTemporary Occupation Permit was issued in August 2002. This 10-storey freehold apartment project locatedat District 10 is currently available for sale. A total of 24 units, each with private lift lobbies, as well as highquality finishes and fittings, represent the ultimate in exclusivity and privacy. The development comprisesof 21 units of one and two bedroom apartments and 3 penthouses with private roof gardens. Sizes rangefrom 775 to 2,422 sq ft. With the development’s close proximity to reputable schools, recreational clubsand the Orchard Road shopping and entertainment belt, it can expect interest from high net-worthindividuals and young couples.

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Every year, Noel tries to make a difference to the community and 2002 was noexception. During the year, Noel donated part of its proceeds from the sale of Noel

gifts to Bethesda Care & Counselling Services Centre (BCCSC), amounting toS$100,000. In total, we raised S$250,000 together with other corporate and individual

well-wishers for BCCSC. This would go towards the funding of its causes such asinstilling values and coping skills to the disadvantaged in the community through the

provision of relevant and integrated social services.

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Bringing Communities Closer

Noel believes in bringing the community closer as a little goes a long way in delivering the much neededcheer to the disabled, the disadvantaged as well as the underprivileged.

Every year, Noel tries to make a difference to the community and 2002 was no exception. During the year,Noel donated part of its proceeds from the sale of Noel gifts to Bethesda Care & Counselling ServicesCentre (BCCSC), amounting to S$100,000. In total, we raised S$250,000 together with other corporateand individual well-wishers for BCCSC. This would go towards the funding of its causes such as instillingvalues and coping skills to the disadvantaged in the community through the provision of relevant andintegrated social services.

Not forgetting our founding builders, we continued to contribute rice to samsui women on a monthly basissince 1997. In addition, we partnered Compaq in their charity drive to raise funds for the beneficiaries ofCompaq’s designated charities such as TOUCH Home Care, Canossian School of the Hearing Impaired,Singapore School for the Visually Handicapped, SILRA Home and MINDS (Lee Kong Chian GardensSchool).

Since year 2000, our annual ‘Red Cross Blood Donor Recruitment’ blood donation event continues todraw donors to give one of the greatest gifts ever possible, the gift of life.

Mothers play a pivotal role in all our lives and on Mother’s Day this year, we commemorated this specialoccasion by honouring extraordinary mothers. In collaboration with the Southeast Community DevelopmentCouncil (Marine Parade), Noel presented each extraordinary mother with a special hamper as a gesturefor all the love, sacrifices and encouragement that they have shown. These extraordinary mothers haveone thing in common - they have all raised children with special needs. Every mother has a story ofstruggle to tell. However, in the end, it is their story of love that shines through all the suffering that theyhad to endure.

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NOEL Corporate Building

50 Kallang Avenue #04-01 Noel Corporate Building Singapore 339505

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Corporate Data

Board of Directors

Alfred Wong Siu Hong • Mrs Ivy Tan (Mdm Wong Phui Hong) • James Wong Koon Hong • Freddie Heng Kim Chuan• Paul Chan Kwai Wah • Koh Soo Keong • Edward Lim

Company Secretaries

Mrs Ivy Tan (Mdm Wong Phui Hong) • Tham Mei Yoke

Registered Address

50 Kallang Avenue #04-01 Noel Corporate Building Singapore 339505

Registrars and Share Transfer Office

Compact Administrative Services Pte Ltd • 6 Shenton Way #28-09 DBS Building Tower Two Singapore 068809

Audit Committee

Freddie Heng Kim Chuan • Koh Soo Keong • Alfred Wong Siu Hong

Auditors

Deloitte & Touche • 6 Shenton Way #32-00 DBS Building Tower Two Singapore 068809

Partner in charge: Mr Aric Loh Siang Khee

(Appointed with effect from July 1, 2001)

Principal Bankers

The Development Bank of Singapore Limited • 6 Shenton Way DBS Building Tower One Singapore 068809

United Overseas Bank Limited • 80 Raffles Place UOB Plaza Singapore 048624

Oversea-Chinese Banking Corporation Limited • 65 Chulia Street #06-00 OCBC Centre Singapore 049513

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2000 2001 2002

14,180

17,58117,703

16,723

17,478

(S$’000)Shareholders’ Fund

1998 1999 2000 2001 2002

33,348

38,245

41,18941,349

(S$’000)Total Assets

1998 1999

50,051

2000 2001 2002

(782)

(266)

(S$’000)

Profit/(Loss)Attributable to Shareholders

1998 1999

2000 2001 2002

17,06318,848

20,173

22,40620,623

(S$’000)Turnover

1998 1999

Financial Highlights

1,042

641

894

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FINANCIAL CONTENTS

20 Directors’ Report27 Auditors’ Report28 Balance Sheets29 Profit and Loss Statements30 Statements of Changes in Equity31 Consolidated Cash Flow Statement32 Notes to the Financial Statements59 Statement of Directors60 Statistics of Shareholdings61 Portfolio held by Property Division62 Notice of Annual General Meeting

Proxy Form


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Noel Gifts International Ltd50 Kallang Avenue #04-01 Noel Corporate Building Singapore 339505

Tel: 6299 1133 Fax: 6293 3522 Website: http://www.noelgifts.com

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Annual Report 2002

O u r S t o r y


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CONTENTS

1 Corporate Profile2 Managing Director’s Message6 Board of Directors8 Bringing People Closer10 Bringing the World Closer12 Bringing Services Closer14 Bringing Communities Closer17 Corporate Data18 Financial Highlights19 Financial Contents


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