(Extracted from Annual Report for 2017)

On behalf of the Board of Directors, I am pleased to present the Annual Report and Financial Statements of the Group and the Company for the financial year ended 31 December 2017 ("FY2017").

The external operating environment for FY2017 continued to be challenging, against a background of modest growth for the Singapore's economy of 3.6% for the whole of 2017. Notwithstanding this difficult business environment, the Group recorded a profit after tax of $4.9 million for the financial year ended 31 December 2017, an improvement of 79.7% compared to $2.7 million for the same period last year. The stronger performance was mainly attributed to higher total income and lower total operating expenses. Total income improved by $0.8 million or 3.7% as net interest income increased $1.3 million or 6.7% partly offset by lower non-interest income by $0.5 million or 18.6%. Net interest income increased as the decline in interest expense outweighed the drop in interest income while non-interest income dropped mainly due to decline in fees and commissions income. Total operating expenses were well managed, with the decline of $1.5 million or 9.7% coming largely from other operating expenses and depreciation charge on fixed assets.

The Group's total loan net of allowances dipped 10.9% to $747 million as at 31 December 2017 compared to $838 million as at 31 December 2016. In line with the lower loan balance, the Group has also actively managed the total deposits downwards by 5.7% to $808 million as at 31 December 2017. Net allowances for loan losses amounted to $3.5 million for the year ended 31 December 2017. For the same period last year, there was a net charge for loan allowances of $3.9 million. The Group continues to set aside adequate specific and collective allowances for the loan portfolio.

Subject to approval of shareholders at the forthcoming Annual General Meeting, the Board is recommending a first and final one-tier tax exempt dividend of 2 cents per share and a special one-tier tax exempt dividend of 1 cents per share for FY2017. The total distribution of 3 cents per share for the year will amount to approximately $4.76 million.

On 14 February 2017, Monetary Authority of Singapore ("MAS") announced that regulatory changes will be made to strengthen the resilience of finance companies and enhance their ability to provide financing to small and medium sized enterprises ("SMEs"). Some of the changes have since been introduced in December 2017.

The limits on a finance company's uncollateralised business loan in total and to a single borrower have been raised. This will better enable the Company to serve their SME customers, many of whom require unsecured credit for working capital needs.

Besides that, finance companies are now allowed to offer current account and chequing services to their business customers. They are also allowed to join electronic payment networks, including inter-bank GIRO, Fast and Secure Transfers ("FAST") and Electronic Funds Transfer at Point of Sale ("EFTPOS"). These changes will enable the Company to provide more comprehensive and deposit services to SMEs.

The Group welcomes the revisions and will explore any expanded business opportunities that accompanies the changes to fill a useful niche in SME financing, complementing the role of a bank.

In June 2016, SGX introduced sustainability reporting on a "comply or explain" basis. SGX-listed companies have up to 12 months from the end of the financial year to publish their first report. This takes effect for any financial year ending on, or after, 31 December 2017.

Sustainability reporting complements the financial reporting. Statements of financial position and comprehensive income provide a snapshot of the present and an account of the past year, while sustainability reports of environmental, social and governance factors ("ESG factors") show the risks and opportunities within sight, managed for future returns. Taken together, the combined financial and sustainability reports enable a better assessment of the issuer's financial prospects and quality of management. The Group is pleased to present its inaugural Sustainability Report on pages 12 to 26.

OUTLOOK
The external demand outlook for Singapore is expected to be slightly weaker in 2018 as compared to 2017 as its key trading partners enter a more mature phase of recovery. Furthermore, while global macroeconomic risks have receded to some extent since the end of 2017, some remain, including concerns over protectionist sentiment and trade policies, especially in the United States, as well as higher-than-expected inflation, which could prompt the US central bank to raise interest rates more quickly. This could in turn cause global financial conditions to tighten more than anticipated and potentially lead to sharp corrections in financial markets. Should this occur, regional economies with elevated debt levels could be disproportionately affected, and there could be some pullback in investment and consumption growth
in these economies. Against this external backdrop, the pace of growth in the Singapore economy is expected to moderate in 2018 as compared to 2017, but remain firm. Barring the materialisation of any downside risks, the Ministry of Trade and Industry tipped the GDP growth in 2018 to come in slightly above the middle of the forecast range of "1.5% to 3.5%".

Given the expected rate hike by the US Federal Reserve in 2018, we foresee Singapore interest rates to continue to trend upwards in the coming financial year.
This will have significant impact on our funding costs due to higher interest rates for our customers' deposits.

We also expect moderate growth in loan portfolio as current prudent measures taken by the Government especially on property financing will probably remain intact. Nevertheless, the Group will continue to be prudent in seeking new business opportunities and be proactive in managing our credit exposure and operating expenses
to remain competitive.

ACKNOWLEDGEMENTS
On behalf of the Board, I thank all our valued customers, shareholders and business partners for their unrelenting support. My appreciation also goes to my fellow
Board members for their invaluable guidance and advice and to the Management as well as staff for their dedication and hard work during the past year. click here to download the 2017 Financial Annual Report.

Board of Directors

CORPORATE GOVERNANCE

(Extracted from Annual Report for 2017)

Singapura Finance Ltd ("SFL" or the "Company") is committed to achieving and maintaining high standards of corporate governance in order to safeguard the interest of shareholders.

This report outlines SFL's corporate governance practices which are in line with the principles and guidelines set out in the Code of Corporate Governance 2012 (the "2012 Code") during the financial year ended 31 December 2017 ("FY2017"). Where there is any material deviation from 2012 Code, the Company's position in respect of such differences is explained in this report. The material deviations pertain to the disclosure requirements on remuneration as detailed on page 36.

BOARD MATTERS
The Board's Conduct of Affairs
Principle 1: Effective Board to lead and control the Company

Role of the Board

The Board is collectively responsible for providing overall strategy and direction to Management so as to achieve sustainable and successful performance for the Company and its subsidiaries (the "Group").

The Board's primary functions are to:

• Provide entrepreneurial leadership, set strategic aims and ensure that the necessary financial and human resources are in place for the Company to meet its objectives.
• Establish a framework of prudent and effective controls which enables risk to be assessed and managed, including safeguarding of shareholders' interests and the Company's assets.
• Consider and approve key changes to the organisational structure of the Company.
• Review management performance.
• Identify the key stakeholder groups and recognise that their perceptions affect the Company's reputation.
• Set the Company's values and standards (including ethical standards), and ensure that obligations to shareholders and other stakeholders are understood and met.
• Consider sustainability issues as part of its strategic formulation.

All Directors objectively discharge their duties and responsibilities at all times as fiduciaries in the interests of the Company

Board Committees

To ensure that specific issues are subject to in-depth and timely review, certain functions have been delegated to various Board Committees, which would submit its recommendations or decisions to the Board. The five Board Committees are the Executive Committee, Nominating Committee, Remuneration Committee, Risk Management Committee and Audit Committee.

The Executive Committee ("EXCO") comprises three members, namely, Mr Teo Chiang Long (Executive Chairman), Mr Teoh Eng Hong (Independent & Non-Executive Director) and Mr Jamie Teo Miang Yeow (Executive Director & Chief Executive Officer ("CEO")). The EXCO acts on behalf of the Board in supervising the management of the Company's business and affairs, in particular, the granting of loans, guarantees or credit facilities within the authority limits delegated by the Board, and approving new product proposals. Unanimous decision by EXCO Members is required for a resolution to be effective, which is passed through circulation in writing.

The composition and key functions of the other four committees are described in the other relevant sections of this report.

• Nominating Committee (Principle 4)
• Remuneration Committee (Principle 7)
• Risk Management Committee (Principle 11)
• Audit Committee (Principle 12)

Board Meetings and Attendance

Regular Board and Board Committee meetings are held. The Board meets at least four times a year. Additional meetings are held as and when circumstances warrant. The Company's Constitution provides for Board and Board Committee meetings to be held via teleconferencing.

The Board has written terms of reference which clearly set out its authority and duties. The Board reviews and approves the strategic plans, annual budget, key operational issues, quarterly and yearly financial announcements and statutory financial statements and reviews the financial performance of the Group.

.. to read more, click here to download the 2017 Financial Annual Report.

Annual Reports

Published	Download Link
2019	Annual report 2018
2018	Annual report 2017
2017	Annual report 2016
2016	Annual report 2015
2015	Annual report 2014
2014	Annual report 2013
2013	Annual report 2012
2012	Annual report 2011
2011	Annual report 2010

IR(Investor Relations) Contact

At Singapura Finance Ltd, we welcome your comments and feedback.
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Address: 150 Cecil Street #01-00 Singapore 069543
Tel: 6880 0627
Fax: 6225 8310