Unaudited Half Year Financial Statements and Dividend Announcement for the financial period ended 30 June 2011

Transcription

1 Natural Cool Holdings Limited. (Registration Number: G) This announcement and its content have been reviewed by the Company's sponsor, CNP Compliance Pte Ltd ("Sponsor"), for compliance with the relevant rules of the Singapore Exchange Securities Trading Limited ( SGX- ST ). The Sponsor has not independently verified the contents of this announcement. This announcement has not been approved or examined by the SGX-ST and the SGX-ST assumes no responsibility for the contents of this announcement, including the correctness of any statements or opinions made or reports contained in this announcement. The contact person for the Sponsor is Mr Pradeep Kumar Singh, at 36 Carpenter Street, Singapore , telephone: (65) ; pksingh@cnplaw.com. PART I INFORMATION REQUIRED FOR ANNOUNCEMENTS OF HALF YEAR RESULT 1(a) (i) An income statement (for the group) together with a comparative statement for corresponding period of the immediately preceding financial year CONSOLIDATED INCOME STATEMENT Period Ended 30 June Increase/ (Decrease) % Revenue 63,469 67,292 (5.68) Cost of sales (51,245) (53,174) (3.63) Gross profit 12,224 14,118 (13.42) Other income 382 1,238 (69.14) Distribution expenses (3,231) (2,794) Administrative expenses (9,241) (10,383) (11.00) Other expenses (111) (63) Results from operating activities 23 2,116 (98.91) Finance costs (632) (1,602) (60.55) (Loss) / profit before income tax (609) 514 NM Income tax expenses 111 (389) NM (Loss) / profit for the period (498) 125 NM (Loss) / profit attributable to: Owners of Company (429) 23 NM Non-controlling interests (69) 102 NM (Loss) / profit for the period (498) 125 NM Notes: NM: Not Meaningful Page 1 of 17

2 CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME Period Ended 30 June (Loss) / profit for the period (498) 125 Other comprehensive income: Foreign currency translation differences for foreign operations (58) 86 Total Comprehensive (Expense) / Income for the period (556) 211 Attributable to: Owners of the Company (471) 108 Non-controlling interests (85) 103 Total Comprehensive (Expense) / Income for the period (556) 211 Page 2 of 17

3 1 (a) (ii) Other notes: Profit from operations is arrived at after charging/(crediting) the following items: Period Ended 30 June Interest income (9) - Amortisation of intangible assets Impairment loss for receivables Bad Debt written off 19 9 Depreciation for property, plant and equipment 1,059 1,284 Depreciation for investment properties Loss/(Gain) on foreign exchange 86 (80) Gain on disposal of property, plant and equipment (150) (90) Loss on disposal of investment properties - 43 Page 3 of 17

4 1 (b) (i) A balance sheet (for the issuer and group), together with a comparative statement as at the end of immediately preceding financial year. STATEMENTS OF FINANCIAL POSITION Company As at 30 June As at 31 December As at 30 June As at 31 December Non-current assets Property, plant and equipment 14,150 13, Intangible assets 3,714 3, Investment properties 5,408 3, Subsidiaries ,007 15,007 Deferred tax asset 2,128 2, ,400 23,424 15,007 15,007 Current assets Inventories 18,040 15, Trade and other receivables 43,369 41,663 9,490 8,285 Cash and cash equivalents 12,229 25, ,518 73,638 83,134 9,637 12,803 Non-current asset held for sale 11,214 11, ,852 94,348 9,637 12,803 Less: Current liabilities Trade and other payables 46,773 53, ,213 Financial liabilities 15,223 13, Current tax payable 2,975 3, ,971 70, ,338 Net current assets 19,881 23,535 9,031 11,465 Less: Non-current liabilities Financial liabilities 5,614 5, Deferred tax liabilities ,364 6, Net assets 38,917 40,626 24,038 26,472 Share capital 28,869 25,629 28,869 25,629 Reserves (3,447) (2,285) 6 1,126 Accumulated profits/ (loss) 12,987 16,689 (4,837) (283) Equity attributable to owner of the Company 38,409 40,033 24,038 26,472 Non-controlling interests Total equity 38,917 40,626 24,038 26,472 Page 4 of 17

5 1 (b) (ii) Aggregate amount of group s borrowing and debt securities. As at 31 As at 30 June December Amount repayable in one year or less, or on demand Unsecured Bridging loan Short-term loans 4,540 2,779 5,264 3,503 Secured Bank overdrafts Short term loans Current portion of bank loans 8,562 8,730 Finance lease payables 941 1,069 9,959 10,447 15,223 13,950 Amount repayable after one year Unsecured Bridging loan 1,342 1,700 Secured Bank loans 3,886 2,877 Finance lease payables 386 1,003 4,272 3,880 5,614 5,580 Details of any collateral The bank loans are secured on:- (i) property, plant and equipment, investment properties and non-current asset held for sale with net book values as at 30 June 2011 of S$5,996,767, S$5,408,081 and S$11,214,279 (FY2010: S$5,899,569, S$3,825,917 and S$11,214,276) respectively; (ii) fixed deposit pledged amounted to S$310,604 (FY2010: S$451,016); (iii) fixed and floating charge on inventories amounted to S$183,367 (FY2010: S$302,581); and (iv) corporate guarantee by Natural Cool Holdings Limited. The finance lease payables are secured by motor vehicles, computers, equipments and machineries under the lease. Page 5 of 17

6 1 (c) A cash flow statement (for the group), together with a comparative statement for the corresponding period of the immediately preceding financial year. CONSOLIDATED STATEMENT OF CASH FLOWS Half year ended 30 June Operating activities (Loss) / Profit for the period (498) 125 Adjustments for: Amortisation of intangible assets Bad debt written off 19 9 Depreciation of property, plant and equipment 1,059 1,284 Depreciation of investment properties Gain on disposal of plant and equipment (150) (90) Loss on disposal of investment properties - 43 Interest expenses 632 1,602 Interest income (9) - Listing expenses Income tax expenses (111) 389 1,290 3,784 Changes in working capital: Inventories (2,520) (27) Trade and other receivables (1,829) 3,776 Trade and other payables (7,744) (3,545) Cash flows from operations (10,803) 3,988 Income taxes paid (141) (534) Cash flows (used in) / from operating activities (10,944) 3,454 Page 6 of 17

7 CONSOLIDATED STATEMENT OF CASH FLOWS (CONTINUED) Half year ended 30 June Investing activities Interest received 9 - Proceeds from disposal of property, plant and equipment Proceeds from disposal of investment property - 1,140 Purchase of computer software (81) (21) Purchase of industrial operating right (126) (147) Purchase of property, plant and equipment (994) (1,427) Purchase of investment properties (1,600) - Receipt of profit guarantee Cash flows (used in) / from investing activities (2,018) 94 Financing activities Dividend paid (3,273) - Fixed deposit pledged to bank 140 (6) Interest paid (632) (1,602) Payment of listing expenses (445) - Proceeds from exercise of warrants of the Company 2,120 1,049 Proceed from borrowings 4,607 5,023 Repayment of borrowings (2,615) (5,913) Repayment of finance leases (745) (816) Cash flows used in financing activities (843) (2,265) Net (decrease) / increase in cash and cash equivalents (13,805) 1,283 Effect on changes in foreign exchange rate 163 (273) Cash and cash equivalents at beginning of period 25,348 6,023 Cash and cash equivalents at end of period 11,706 7,033 Cash and cash equivalents on balance sheet 12,229 8,936 Fixed deposit pledged to bank (311) (1,856) Bank overdrafts (212) (47) Cash and cash equivalents in the statement of cashflows 11,706 7,033 Page 7 of 17

8 1(d) (i) A statement (for issuer and group) showing either (i) all changes in equity or (ii) changes in equity other than those arising from capitalisation issues and distributions to shareholders, together with a comparative statement for the corresponding period of the immediately preceding financial year CONSOLIDATED STATEMENT OF CHANGES IN EQUITY Share capital Capital reserve Foreign currency translation reserves Warrants reserve Accumulated profits Total attributable to equity holders of the Company Noncontrolling interests The At 1 January ,950 (3,378) (86) 1,176 9,977 31, ,132 Total comprehensive income for the period -Profit for the period Total equity Other comprehensive income -Foreign currency translation differences Total comprehensive income for the year Transactions with owners, recorded directly in equity Exercise of warrants 1, (15) - 1,049-1,049 Total transactions with owners 1, (15) - 1,049-1,049 At 30 June ,014 (3,378) (1) 1,161 10,000 32, ,392 Page 8 of 17

9 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (CONTINUED) Share capital Capital reserve Foreign currency translation reserves Warrants reserve Accumulated profits Total attributable to equity holders of the Company Noncontrolling interests The At 1 January ,629 (3,379) (32) 1,126 16,689 40, ,626 Total comprehensive income for the period -Loss for the period (429) (429) (69) (498) Total equity Other comprehensive income -Foreign currency translation differences - - (42) - - (42) (16) (58) Total comprehensive income for the year - - (42) - (429) (471) (85) (556) Transactions with owners, recorded directly in equity Exercise of warrants 3, (1,120) - 2,120-2,120 Dividend paid (3,273) (3,273) - (3,273) Total transactions with owners 3, (1,120) (3,273) (1,153) - (1,153) 30 June ,869 (3,379) (74) 6 12,987 38, ,917 Page 9 of 17

10 STATEMENT OF CHANGES IN EQUITY (CONTINUED) Share capital Warrants reserve Accumulated profits/(losses) Total equity The Company At 1 January ,950 1,176 (3,854) 21,272 Total comprehensive income for the period -Loss for the period - - (1,501) (1,501) Transactions with owners, recorded directly in equity Exercise of warrants 1,064 (15) - 1,049 At 30 June ,014 1,161 (5,355) 20,820 At 1 January ,629 1,126 (283) 26,472 Total comprehensive income for the period -Loss for the period - - (1,281) (1,281) Transactions with owners, recorded directly in equity Exercise of warrants 3,240 (1,120) - 2,120 Dividend paid - - (3,273) (3,273) At 30 June ,869 6 (4,837) 24,038 Page 10 of 17

11 1. (d) (ii) Details of any changes in the company s share capital arising from right issue, bonus issue, share buy-backs, exercise of share options or warrants, conversion of other issues of equity securities, issue of shares for cash or as consideration for acquisition for acquisition or for any other purpose since the end of the previous period reported on. State also the number of shares that may be issued on conversion of all outstanding convertibles as at the end of the current financial period reported on and as the end of the corresponding period of the immediately preceding financial year. On 2 July 2008, the Company issued 31,728,024 warrants at $0.06 per warrant on the basis of three warrants for every ten existing ordinary shares held. Each warrant entitles the warrant holder to subscribe for one new ordinary share in the Company at the exercise price of $0.10 per share on or before 1 July During the period, a total of 21,903,214 warrants were exercised. On 23 December 2009, the Company issued 20,000,000 warrants at nil consideration in connection with a 2-years loan amounting to S$4,000,000 (the Loan ) from Frankland Investments Ltd ( FIL ), a company incorporated in the British Virgin Islands. FIL has the option to set off against the outstanding Loan amount owed by the upon exercise of each warrant held. Subject to a maximum payment of S$200,000, the is required to pay FIL at S$0.01 per warrant for any outstanding warrants not exercised by FIL upon expiry of the exercise period. FIL has the option to transfer the warrants to third parties. FIL exercised 7,500,000 warrants to offset the outstanding Loan of S$1,500,000. As the Loan from FIL was fully repaid as at 31 December 2010, gross proceed of S$0.20 per warrant will be raised if the remaining 12,500,000 warrants that was issued to FIL were exercised. All new ordinary shares will rank pari passu in all respects with the then existing ordinary shares, save for any dividends, rights, allotment or other distributions, the record date for which is on or before the relevant exercise date of warrants. and Company Warrants No. of warrants No. of warrants At 1 January 35,060,483 43,854,323 Exercise of warrants (21,903,214) (8,793,840) At 30 June 2011/31 December ,157,269 35,060,483 The Company did not hold any treasury shares as at 31 December 2010 and 30 June Page 11 of 17

12 (d) (iii) To show the total number of issued shares excluding treasury shares as at the end of current financial period and as at end of immediately preceding year. and Company Fully paid ordinary shares, with no par No. of shares No. of shares value At 1 January 143,427, ,633,781 Issue of new shares - exercise of warrants 21,903,214 8,793,840 At 30 June 2011 / 31 December ,330, ,427,621 (d) (iv) A statement showing all sales, transfers, disposal, cancellation and/ or use of treasury shares as at the end of the current financial period reported on. Not applicable. 2. Whether the figures have been audited or reviewed and in accordance with which auditing standard or practice. The figures have neither been audited nor reviewed by the auditors. 3. Where the figures have been audited or reviewed, the auditors report (including any qualifications or emphasis of a matter). Not applicable. 4. Whether the same accounting policies and methods of computation as in the issuer s most recently audited annual financial statements have been applied. Except as disclosed in paragraph 5 below, the has applied the same accounting policies and methods of computation in the financial statements for the current reporting period as in those of the audited financial statements for the year ended 31 December If there are any changes in the accounting policies and methods of computation, including any required by an accounting standard, what has changed, as well as the reasons for, and the effect of, the change. The has adopted the new or revised Financial Reporting Standard (FRS) and the interpretation of FRS that become effective for the entities with financial period commencing 1 January Presently, the does not expect the adoption of the new or revised FRS and the interpretation of FRS to have any material impact on the financial statement. Page 12 of 17

13 6. Earnings per ordinary share of the group for the current financial period reported on and the corresponding period of the immediately preceding financial year, after deducting any provision for preference dividends. Half year ended 30 June Net (Loss)/Profit attributable to shareholders () (429) 23 Weighted average number of ordinary share in issue (No. of shares)-basic 149,393, ,294,473 Earnings per share (cents) - basic (0.29) 0.02 Weighted average number of ordinary share in issue (No. of shares) - diluted 149,438, ,823,717 Earnings per share (cents) - diluted (0.29) Net asset value (for the issuer and group) per ordinary share based on issued share capital of the issuer at the end of the (a) current financial period reported on and (b) immediately preceding financial year. Company As at 30 June As at 31 December As at 30 June As at 31 December Net assets attributable to shareholders () 38,409 40,033 24,038 26,472 Net asset value per share as at respective year (cents) Page 13 of 17

14 8. A review of the performance of the group, to the extent necessary for a reasonable understanding of the group s business. It must include a discussion of the following:- (a) any significant factors that affected the turnover, cost, and earnings of the group for the current financial period reported on including (where applicable) seasonal or cyclical factors. REVIEW OF RESULT OF OPERATIONS The s revenue decreased marginally by approximately 5.68% from S$67.29 million in HY2010 to S$63.47 million in HY2011. Below is the segmental breakdown of s revenue. Business segment Increase / (Decrease) % Aircon 36,879 38,809 (1,930) (4.97) Switchgear 24,435 27,617 (3,182) (11.52) Others 2, , Total 63,469 67,292 (3,823) (5.68) Revenue from our Aircon division decreased marginally by approximately S$1.93 million, or 4.97% in HY2011 as compared to HY2010. The decrease in the revenue was attributable to the delay in commencement date of certain commercial installation projects during the current financial period. In HY2011, the recognition of revenue relating to certain variation order that was completed in prior financial period brought about a slight improvement in the gross profit margin of the Aircon division. Revenue from our Switchgear division decreased by approximately S$3.18 million, or 11.52% in HY2011 as compared to HY2010. The decrease in revenue was mainly attributed to increased competition. Revenue from Others division relates to rental income generated from our properties located at 29 Tai Seng Avenue, Kranji and Benoi Crescent. In HY2010, prior to the completion of the sale and leaseback transaction, the rental income from 29 Tai Seng Avenue was recorded as Other income. This has also led to decrease in Other income in HY2011. Geographically, our operations in Singapore continued to remain as the s major revenue contributor, accounting for 97.63% (HY2010: 97.69%) of the total s revenue. The gross profit decreased by approximately S$1.89 million, or 13.42%, from S$14.12 million in HY2010 to S$12.22 million in HY2011. Our gross profit margin experienced a slight decrease of approximately 1.72%, from 20.98% in HY2010 to 19.26% in HY2011, as a result of a reduction of gross profit margin by Switchgear division as well as the commencement of rental payable to Mapletree Logistics Trust subsequent to the completion of the sales and leaseback of 29 Tai Seng Avenue in August The fall in overall gross profit margin is partially offset by the slight improvement of the gross profit margin of the Aircon division. Our distribution expenses, administrative expenses and other expenses collectively decreased by approximately S$657,000, from S$13.24 million in HY2010 to S$12.58 million in HY2011, mainly due to the following reasons: 1) Decrease in legal and professional expenses incurred for the listing exercise of our Switchgear division on the Growth Enterprise Market of Hong Kong Stock Exchange; 2) Reclassification of land rent for 29 Tai Seng Avenue from administrative expenses to Cost of sales subsequent to the completion of the sale and leaseback of 29 Tai Seng Avenue; 3) Decrease in depreciation expenses as a result of the sale of 29 Tai Seng Avenue; and 4) Decrease in amortization of intangible assets. In HY2011, the recognized the amortization expenses for 6 months during HY2011. For the corresponding period last year, the Page 14 of 17

15 recognized the amortization expenses for both 2009 and 2010 as a result in a change in accounting estimates. The above decreases were partly offset by increase of the following expenses:- 1) Advertising cost for the Aircon division as a result of the increase advertising and promotion activities following the opening of our new Buy & Fix outlet; and 2) Staff cost as a result of annual revision of staff salaries as well as an increase in headcount for the Aircon division. Finance costs decreased by approximately S$970,000 or 60.55% in HY2011, primarily due to the repayment of the property loan for Tai Seng Avenue in HY2011. Arising from above, the operating segments of the reported a loss of approximately S$609,000 in HY2011 as opposed to a profit of approximately S$514,000 in HY2010. In HY2011, there was an over provision of prior year income tax by certain subsidiaries resulting in the reporting a tax credit of S$111,000. (b) any material factors that affected the cash flow, working capital, assets or liabilities of the group during the current financial reported on. REVIEW OF CASH FLOW Cash flow from operating activities was an outflow of approximately S$10.94 million for HY2011 as compared to inflow of S$3.45 million for HY2010. This was mainly due to cash outflow for the settlement of trade and other payables. Net cash outflow from investing activities of approximately S$2.02 million for HY2011 was primarily due to the acquisition of an investment property at Hougang as well as the purchase of new motor vehicles by the Aircon division. In addition, expenses incurred for renovation and extension of office also contributed to the net cash outflow. Cash flow from financing activities was an outflow of approximately S$843,000 for HY2011, mainly due to payment of dividend as well as repayments of term loans. The outflow for repayment of loans was partially offset by the proceeds from exercise of warrants as well as the drawdown of new bank loans. REVIEW OF BALANCE SHEET Property, plant and equipment increased by approximately S$374,000, from S$13.78 million in FY2010 to S$14.15 million in HY2011. The increase was mainly due to costs incurred for renovation and extension of office as well as the acquisition of motor vehicle. Such increase was, however, offset by the depreciation charges for the period, amounting to approximately S$1.06 million, and disposal of motor vehicles resulted from the motor vehicle fleet renewal process by the Aircon division. Investment properties increased by S$1.58 million, from S$3.83 million in FY2010 to S$5.41 million in HY2011, mainly due to the acquisition of a property located at Hougang. Current assets decreased by approximately S$9.50 million, or 10.06% in HY2011 as compared to FY2010. This decrease was attributed to the reduction in cash and cash equivalent arising from the utilization of cash for payment of dividend as well as acquiring new inventory type to enhance our product range and also to cater to the opening of additional retail outlet at West Coast Plaza. Trade and other payables decreased by approximately S$6.87 million or 12.80% in HY2011 as compared to FY2010. The decrease was mainly due to more timely settlement of trade and other payables before Page 15 of 17

16 they falls due. As at 30 June 2011, the s total borrowings amounted to approximately S$20.84 million (31 December 2010: S$19.53 million) with S$15.22 million repayable within one year and S$5.61 million repayable beyond one year. Arising from the above, working capital decreased by S$3.65 million in HY2011 as compared to FY Where a forecast, or a prospect statement, has been previously disclosed to shareholders, any variance between it and the actual results. Not applicable. 10. A commentary at the date of the announcement of the significant trends and competitive conditions of the industry in which the group operates and any known factors or events that may affect the group in the next reporting period and the next 12 months. The Board expects the operating environment for the rest of the financial year to remain challenging. The will continue to focus on improving operational efficiency and cost control measures in order to enhance our competitiveness. 11. Dividend (a) Current Financial Period Reported On Any dividend declared for the current financial period reported on? Not applicable. (b) Corresponding Period of the Immediately Preceding Financial Year Any dividend declared for the corresponding period of the immediately preceding financial year? Not applicable. (c) Date payable Not applicable. (d) Books closure date Not applicable. 12. If no dividend has been declared/recommended, a statement to that effect. Not applicable Page 16 of 17

17 PART II-ADDITIONAL INFORMATION REQUIRED FOR FULL YEAR ANNOUNCEMENT (This part is not applicable to Q1, Q2, Q3 or Half Year Results) 13. Interested person transaction During the year, there were following significant related party transactions carried out in the normal course of business (excluding transaction less than S$100,000) on term agreed between the parties. Not applicable. 14. Usage of proceeds from Warrants Issue In 2008, the Company had raised approximately S$1.6 million after deducting the Warrants Issue expenses from its Warrant Issue exercise. The Warrants Issue proceeds of approximately S$1.5 million were earmarked for the expansion of the air-conditioner and switchgear business in Singapore, the People s Republic of China, India, Cambodia and/or Malaysia and the balance of approximately S$120,000 for working capital purposes. As at 30 June 2011, approximately S$950,000 of such proceeds earmarked for the expansion of the airconditioner and switchgear business in Singapore, the People s Republic of China, India, Cambodia and/or Malaysia were utilised, and there is a balance of approximately S$550,000 from the proceeds unutilised. Pending deployment of the proceeds, the Company has utilised this sum as working capital. 15. Negative Assurance Confirmation on Interim Financial Result Pursuant to Rule 705 (5) of the Listing Manual We, the undersigned, hereby confirm to the best of our knowledge, nothing has come to the attention of the Board of Directors of the Company which may render the unaudited interim financial results for the half year ended 30 June 2011 to be false or misleading in any material aspect. On behalf of the Board of Directors Steven Chen Choon Khee Executive Chairman Joseph Ang Choon Cheng Chief Executive Officer BY ORDER OF THE BOARD Steven Chen Choon Khee Executive Chairman Singapore 5 August 2011 Page 17 of 17