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Governance & Transparency Index (GTI) 2014 - What made Auric Pacific the biggest gainer, and Boustead Singapore the biggest loser? Investor Central By Nadhirah Anuar | Investor Central – Wed, Aug 20, 2014 4:00 PM SGT 20/8/2014 - The recently released 2014 Governance and Transparency Index (GTI) has seen some huge gainers – but also some big losers. There were more than one hundred companies which gained more than 100 places, and another 104 companies which lost more than 100 places, in the annual ranking released July 25. Among the top gainers are Auric Pacific Group Limited, Roxy-Pacific Holdings Limited and QAF Limited. Meanwhile, among the biggest losers are Boustead Singapore Limited, HG Metal Manufacturing Limited and Cosco Corporation (Singapore) Limited. The GTI is compiled by NUS Business School and Business Times, and ranks companies based on their annual announcements. The 2014 statistics are based on the financial year 2013, with annual reports released by 31 May 2014. Investor Central. We keep your investments honest. NOTABLE GAINERS Auric Pacific Group Limited is among the most outstanding gainers. Its ranking in the GTI surged 255 places to 47th place. Auric Pacific makes, sells and distributes food and consumer goods under brands such as Delifrance, Sunshine Bread and Food Junction, and operates in Singapore, Malaysia, Hong Kong and China. It also invests in property and securities. Notably, its CEO is former SMRT chief Saw Phaik Hwa, who left the public transport company in early 2012 after massive train outages just before Christmas 2011. Question 1. What corporate governance and transparency initiatives did the former SMRT CEO implement to boost Auric Pacific’s standings in the GTI so dramatically? Remarkably, Auric Pacific’s gains in the GTI came at a time when it posted a loss in FY13. The most recent financial statements announced on August 8 – just before the National Day weekend – showed a big decline in Q2 and H1 earnings. This goes to show that a company can still rank highly in governance and transparency, even when the operating performance is going through a rough patch. Question 2. How will operating challenges impact Auric Pacific’s governance and transparency initiatives? In its Q2 financial statements, Auric Pacific said it expects continuing upward pressure on manpower and rental costs. Even as it promises to manage its business risks and cash flow prudently, and take steps to enhance its operational efficiency, how is it ensuring that it doesn’t slip in the GTI to former levels? Question 3. Is the stock trading at fair value? Clearly, every company wishes its stock price was trading higher. Since Saw Phaik Hwa was appointed at Auric Pacific on April 9, 2012, the stock has risen from 72.5 cents to around S$1.20 – a gain of 65.5%. But it is still trading below book value of S$1.67. Is it time for a re-rating of the stock? Total number of questions in the full story: 8) We have invited the company to an on-camera interview, and/or to reply to our questions in writing. At the time of publication we have not received a reply (which is why you are seeing this message). We will update this report if we do. Legal notice While our purpose is to ask the questions which the man on the street would ask, and to help the everyday investor make informed investments, please note that: Our reports and presentations ('our contents') are not investment advice nor should they be construed as investment advice or any recommendation of any kind; nor meant to cast allegations or insinuations of any kind against any individuals or entities. Before acting on the material in our contents, you should either seek independent advice tailored to your particular circumstances and intentions or rely on your own judgement. Our reports and presentations express our observations, opinions and theoretical analysis based on the facts that we have gathered or have been provided to us. While we endeavour to ensure that our contents are accurate and are presented in good faith, we cannot and do not warrant the accuracy, adequacy or completeness of the material or that the material is suitable for its intended use; and we disclaim any such warranties express or implied that may be presumed by any party; neither do we take responsibility for the views of companies or other stakeholders or observers or sources quoted or hyperlinked in our contents. While every precaution has been taken in the preparation of our contents, we (and our principals) shall not be liable for any losses or damage or inconveniences due allegedly to errors or omissions in any facts or due allegedly to reliance on our contents in any way whatsoever; nor for any damage to any computer hardware, date information or materials allegedly caused by our contents. All expressions of opinion and observations in our contents are subject to change without notice and we do not undertake a duty to update and supplem