The Securities Investors Associaton of Singapore (SIAS) sent Second Chance Properties a number of queries in relation to the company’s Annual Report for the FY ended 31 August 2018. Last night, Second Chance responded. Below are two of several topics covered by SIAS: The company's investments and potential en-bloc sale of its properties.

SIAS: Can management confirm that the group has an internal limit of 35% of its net tangibles asset that can be invested in securities?

A: Yes, as per the current internal investment policy, the group has an internal limit of 35% of its net tangible assets that can be invested in securities and it’s subject to annual review by the Board.

SIAS: Are there other risk management safeguards such as sector exposure and single counter exposure to manage the risk of the group’s securities investments?

A: Yes and following are the risk management safeguards for group’s securities investments:

Equity securities:
1) The market capitalization of the stock on date of purchase must be not less than S$500 million
2) The company must have paid dividends for the past 5 years
3) The stock must have at least 3 buy recommendations from established financial institution
4) To have a diversified portfolio with not more than 20% of invested funds in any one sector
5) To limit to up to 5% of Group’s NTA on any single stock , ETF or Index Fund etc.,

Bonds:
1) The NTA of the issuer must not be less than S$500 million
2) To have a diversified portfolio with not more than 20% of funds invested in any one sector
3) To limit up to 1% of latest audited Group’s NTA on any single bond


agm2018Shareholder Mano Sabnani at the Second Chance AGM in Dec 2018 with the company's CEO, Mohd Salleh (holding microphone), responding to his queries. NextInsight photo.
SIAS: Would management provide shareholders with an update on the status of collective sale? How is the group driving the potential monetization of the 12 shop units it holds in Sim Lim Square?

A: The en-bloc for Sim Lim Square is ongoing. The collective sales as at 17 December 2018 is 58.55%. The last date to sign the collective sales for obtaining 80% consensus is 08 March 2019. We have voted in favour of the proposed collective sale of Sim Lim Square. We are also looking to sell at a agreeable price in the market (apart from waiting for the en-bloc)

SIAS: When will the group be carrying out a full valuation on the properties?

A: In 2019.

SIAS: In addition, in Note 20 (page 90 – Investment properties), the group’s properties at City Plaza is now reflected 22 units of approximately 937 square metres, up from 20 units of approximately 837 square metres (as at 31 August 2017). Could management help shareholders understand the reason for the increase?

A: In prior years, there were 2 units at City Plaza that were classified as “Property, plant & equipment” since they were self-occupied. However now, those 2 units have been rented out to third party and hence have been re-classified from “Property, plant & equipment” to “Investment properties”. As such, the group’s properties at City Plaza is now reflected as 22 units.

SIAS: What is the progress of the collective sale of the units at City Plaza?

A: The collective sales as at 22 December 2018 is 22.43%. The last date to sign the collective sales for obtaining 80% consensus is 23 August 2019.

The full Q&A can be found here


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