MEGACHEM LIMITED. Un-audited Financial Statements and Dividend Announcement

Transcription

1 MEGACHEM LIMITED Un-audited Financial Statements and Dividend Announcement For The Financial Year Ended

2 TABLE OF CONTENTS INCOME STATEMENT 3 BALANCE SHEETS 5 CASH FLOW STATEMENT 7 STATEMENTS OF CHANGES IN EQUITY 8 ACCOUNTING POLICIES 10 EARNINGS PER SHARE ATTRIBUTABLE TO THE EQUITY 10 HOLDERS OF THE COMPANY NET ASSET VALUE PER SHARE 10 REVIEW OF PERFORMANCE 11 FORECAST vs ACTUAL 15 RISK 16 PROSPECTS 16 DIVIDENDS 17 SEGMENTAL RESULTS 18 BREAKDOWN OF SALES AND DIVIDENDS PAID 20 2

3 1) UNAUDITED RESULTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER The directors of Megachem Limited are pleased to advise the following unaudited results of the Group for the full year. 1(a) CONSOLIDATED INCOME STATEMENT FOR THE FULL YEAR ENDED 31 DECEMBER Variance FY FY Favourable/(Unfavourable) S$ S$ S$'000 % Sales 59,745,957 59,315, % Cost of sales (47,600,664) (46,511,985) (1,089) (2.3%) Gross profit 12,145,293 12,803,968 (659) (5.1%) Other operating income 260, ,530 (226) (46.5%) Distribution costs (6,121,698) (5,513,415) (608) (11.0%) Administrative expenses (2,835,972) (2,911,945) % Other operating expenses (1,462,310) (1,416,804) (46) (3.2%) Finance costs (300,985) (233,292) (68) (29.0%) Share of profit of associated company 684, , % Profit before income tax 2,369,243 3,682,294 (1,313) (35.7%) Income tax expense (553,396) (965,556) % Net profit 1,815,847 2,716,738 (901) (33.2%) Attributable to: Equity holders of the Company 1,734,531 2,545,133 (811) (31.8%) Minority interests 81, ,605 (90) (52.6%) 1,815,847 2,716,738 (901) (33.2%) Earnings per share for profit attributable to the equity holders of the Company during the financial year - basic and diluted 1.30 cents 1.91 cents 3

4 The following items have been included in arriving at profit for the full year: Group For the full year 31 December S$ For the full year 31 December S$ Other income including interest income 260, ,530 Interest on borrowings (300,985) (233,292) Depreciation and amortisation (807,416) (860,284) Bad debts recovered 47,019 - (Impairment)/reversal of impairment of trade receivables (77,027) 77,240 Write off of inventory (465,255) (470,979) Changes in fair value of financial assets held for trading 26,846 16,350 Changes in fair value of financial liabilities held for trading (8,430) (23,337) Impairment of goodwill - (16,898) Foreign exchange (loss)/gain (132,504) 11,246 Adjustments for over provision for tax in respect of prior financial years 119,768 12,187 Profit on sale of property, plant and equipment 31,417 26,697 4

5 1(b)(i) BALANCE SHEETS AS AT 31 DECEMBER S$ Group S$ Company S$ S$ ASSETS Current assets Cash and cash equivalents 4,512,021 5,951,087 1,763,918 2,990,167 Trade and other receivables 15,489,804 13,446,141 7,689,489 8,650,130 Inventories 13,869,608 12,978,877 7,856,931 7,287,058 Financial assets held for trading 183, , , ,984 Other current assets 1,159, , , ,680 35,213,906 33,414,895 17,927,232 19,272,019 Asset held for sale 915, ,129,510 33,414,895 17,927,232 19,272,019 Non-current assets Transferable club memberships 34,304 34,703 4,001 4,001 Investment in associated company 1,945,302 1,466,931 56,840 56,840 Investments in subsidiaries - - 3,339,855 3,611,037 Property, plant and equipment 3,945,816 5,313,949 2,274,995 2,540,258 5,925,422 6,815,583 5,675,691 6,212,136 Total assets 42,054,932 40,230,478 23,602,923 25,484,155 LIABILITIES Current liabilities Trade and other payables 6,736,264 4,847,706 2,198,702 2,351,768 Current income tax liabilities 156, , ,158 Borrowings 4,791,281 4,834,521 4,320,613 4,742,589 Financial liabilities held for trading 8,430 26,300-1,162 11,692,176 10,320,680 6,519,315 7,471,677 Non-current liabilities Borrowings - 20, Deferred income tax liabilities 18,000 81,000-81,000 18, ,845-81,000 Total liabilities 11,710,176 10,422,525 6,519,315 7,552,677 NET ASSETS 30,344,756 29,807,953 17,083,608 17,931,478 EQUITY Capital and reserves attributable to the Company s equity holders Share capital and share premium 15,892,028 15,892,028 15,892,028 15,892,028 Other reserves (445,601) (472,577) - - Retained earnings 13,558,083 13,103,232 1,191,580 2,039,450 29,004,510 28,522,683 17,083,608 17,931,478 Minority interests 1,340,246 1,285, Total equity 30,344,756 29,807,953 17,083,608 17,931,478 5

6 1(b)(ii) BORROWINGS Amount repayable in one year or less, or on demand As at As at Secured Unsecured Secured Unsecured - S$4,791,281 S$13,160 S$4,821,361 Amount repayable after one year As at As at Secured Unsecured Secured Unsecured - - S$20,845 - Details of collateral The secured borrowings as at relate to finance lease liabilities secured by the rights to the leased assets of our UK subsidiary, which would revert to the lessor in the event of default by the subsidiary. 6

7 1(c) CONSOLIDATED CASH FLOW STATEMENT FOR THE FULL YEAR ENDED 31 DECEMBER For the full year 31 December S$ For the full year 31 December S$ Cash flows from operating activities Net profit 1,815,847 2,716,738 Adjustments for: Allowance for diminution in value of transferable club memberships - 18,120 Amortisation and depreciation 807, ,284 Change in fair value of financial assets held for trading (1,100) (28,900) Gain on disposal of property, plant and equipment (31,417) (26,697) Impairment in value of goodwill - 16,898 Share of profit of associated company (684,473) (467,252) Income tax expenses 553, ,556 Interest income (71,635) (59,190) Interest expense 300, ,292 Operating cash flow before working capital change 2,689,019 4,228,849 Change in operating assets and liabilities Trade and other receivables (2,066,649) 2,909,090 Inventories (890,731) (881,219) Financial assets held for trading (21,343) (4,403) Trade and other payables 1,726,256 (1,111,758) Financial liabilities held for trading (17,870) 26,300 Exchange differences 48, ,210 Cash generated from operations 1,467,452 5,332,069 Income tax paid (1,283,567) (1,313,238) Interest received 39,937 59,190 Net cash provided by operating activities 223,822 4,078,021 Cash flows from investing activities Deposit for sale of property 130,925 - Dividends received 292, ,202 Purchase of property, plant and equipment (448,053) (550,892) Proceeds from partial disposal of interest in subsidiary 10,053 - Proceeds from sale of property, plant and equipment 53,582 31,808 Net cash provided by/(used in) investing activities 38,921 (217,882) Cash flows from financing activities Dividends paid (1,279,680) (1,151,712) Dividends paid by subsidiary to minority shareholders (38,830) - Repayment of finance lease liabilities (34,005) (18,283) Repayments of borrowings (30,080) (4,704,054) Interest paid (269,608) (267,185) Net cash used in financing activities (1,652,203) (6,141,234) Net decrease in cash and cash equivalents (1,389,460) (2,281,095) Cash and cash equivalents at beginning of financial year 5,951,087 8,259,757 Effects of exchange rate changes on cash and cash equivalents (49,606) (27,575) Cash and cash equivalent at end of financial year 4,512,021 5,951,087 7

8 1(d)(i) STATEMENTS OF CHANGES IN EQUITY FOR THE FULL YEAR ENDED 31 DECEMBER The Group Attributable to equity holders of the Company Share capital and share Other Retained premium reserves earnings Minority interest Total equity S$ S$ S$ S$ S$ Balance at 1 January 15,892,028 (472,577) 13,103,232 1,285,270 29,807,953 Net gain recognised directly in equity currency translation differences - 26,976-2,437 29,413 Net profit - - 1,734,531 81,316 1,815,847 Total recognised gains for the financial year - 26,976 1,734,531 83,753 1,845,260 Acquisition of interest by minority shareholder 10,053 10,053 Interim dividend relating to FY paid - - (511,872) - (511,872) Final dividend relating to FY paid - - (767,808) (38,830) (806,638) Balance at 15,892,028 (445,601) 13,558,083 1,340,246 30,344,756 Balance at 1 January - As previously reported 15,892,028 (224,609) 11,324,116 1,120,335 28,111,870 - Effect of changes in accounting policies adjusted prospectively - FRS 39 (revised 2004) - FRS (371,705) 13, , , As restated 15,892,028 (596,314) 11,709,811 1,120,335 28,125,860 Net gain/(loss) recognised directly in equity currency translation differences - 123,737 - (6,670) 117,067 Net profit - - 2,545, ,605 2,716,738 Total recognised gains for the financial year - 123,737 2,545, ,935 2,833,805 Final dividend relating to FY2004 paid - - (1,151,712) - (1,151,712) Balance at 15,892,028 (472,577) 13,103,232 1,285,270 29,807,953 8

9 The Company Share capital and share premium Retained earnings Total S$ S$ S$ Balance at 1 January 15,892,028 2,039,450 17,931,478 Total recognised gain for the financial year net profit - 431, ,810 Interim dividend relating to FY paid (511,872) (511,872) Final dividend relating to FY paid - (767,808) (767,808) Balance at 15,892,028 1,191,580 17,083,608 Balance at 1 January - As previously reported 15,892,028 1,966,686 17,858,714 - Effect of changes in accounting policies adjusted prospectively - FRS 39 (revised 2004) As restated 15,892,028 1,967,576 17,859,604 Total recognised gain for the financial year net profit - 1,223,586 1,223,586 Final dividend relating to FY2004 paid - (1,151,712) (1,151,712) Balance at 15,892,028 2,039,450 17,931,478 1(d)(ii) CHANGES IN SHARE CAPITAL Under the Companies (Amendment) Act that came into effect on 30 January, the concepts of par value and authorised share capital were abolished and the amount in the share premium account as at 30 January became part of the Company s share capital. Other than the above, there has been no changes in the company s issued share capital since the end of the previous financial year. 2. Whether the figures have been audited, or reviewed and in accordance with which standard. The figures have been reviewed by our auditors in accordance with Singapore Standard on Auditing applicable to review engagements. 3. Where the figures have been audited or reviewed, the auditors report (including any qualifications or emphasis of matter) We have been engaged by the Company to review the interim financial information of Megachem Limited (the Company ) and its subsidiaries (the Group ) for the full year. Appendix 7.2 of the Singapore Exchange Securities Trading Limited Listing Manual (the Listing Manual ) requires the preparation of interim financial information to be in compliance with the relevant provisions thereof. The accompanying interim financial information comprises the balance sheet of the Company and the consolidated balance sheet of the Group as at, and the related consolidated income statement, changes in equity of the Company and the Group and consolidated cash flows for the full year then. The interim financial information is the responsibility of, and has been approved by the directors. Our responsibility is to issue a report solely for the use of the directors on the interim financial information based on our review. We conducted our review in accordance with the Singapore Statement of Auditing Practice 11, Review of Interim Financial Information. A review of interim financial information consists principally of applying analytical review procedures to financial data and making inquiries of, and having discussions with, 9

10 persons responsible for financial and accounting matters. It is substantially less in scope than an audit in accordance with Singapore Standards on Auditing and does not provide assurance that we would become aware of any or all significant matters that might be identified in an audit. We have not performed an audit and, accordingly, we do not express an audit opinion. Based on our review, nothing has come to our attention that causes us to believe that there are any material modifications that need to be made to the accompanying interim financial information for it to be in accordance with Appendix 7.2 of the Listing Manual. This report is for your information only and should not be used for any other purposes without our prior written consent. 4. Whether the same accounting policies and methods of computation as in the issuer s most recently audited annual financial statements have been applied Please refer to comments in point 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 Changes in accounting policies In, the Group and the Company adopted the new or revised Financial Reporting Standards (FRS) and interpretations to FRS (INT FRS) that are applicable in the current financial year. The financial statements have been am as required, in accordance with the relevant transitional provisions in the respective FRS and INT FRS. The following are the FRS and INT FRS that are relevant to the Group: FRS 19 (Amendment) Employee Benefits FRS 21 (Amendment) The Effects of Changes in Foreign Exchange Rates FRS 32 (Amendment) Financial Instruments: Disclosures and Presentation FRS 39 (Amendment) Financial Guarantee Contracts INT FRS 104 Determining whether an Arrangement contains a Lease The adoption of the above FRS and INT FRS did not result in substantial changes to the Group s accounting policies. 6. EARNINGS PER SHARE ATTRIBUTABLE TO THE EQUITY HOLDERS OF THE COMPANY Earnings per ordinary shares (in cents) For the financial year For the financial year a) Based on weighted average number of ordinary shares on issue b) On a fully diluted basis Weighted average number of ordinary shares in issue for earnings per share 133,300, ,300, NET ASSET VALUE PER SHARE Group Company Net asset value per ordinary share based on issued share capital (cents) No of ordinary shares used in calculation 133,300, ,300, ,300, ,300,000 10

11 8. REVIEW OF PERFORMANCE Some of the key financial highlights of the Group are as follows: Key Financial Highlights For the financial year For the financial year Variance Fav/(Unfav) Variance (%) Profitability Sale (S$ million) % Gross profit (S$ million) (0.7) (5.1%) Gross profit margin 20.3% 21.6% (1.3%) (6.0%) Profit before income tax (S$ million) (1.3) (35.7%) Net profit before tax margin 4.0% 6.2% (2.2%) (35.5%) Net profit attributable to equity holders of the Company (S$ million) (0.8) (31.8%) EBITDA (S$ m) (1.2) (25.0%) Earnings per share attributable to the equity holders of the Company (cents) (0.61) (31.9%) Annualised return on equity (ROE) 6.0% 8.9% (2.9%) (32.6%) Financial position Current ratio (0.23) (7.1%) Gearing ratio NM Net tangible assets per share (cents) % Inventory turnover (days) (5) (4.9%) Trade receivables turnover (days) % NM : Not meaningful 11

12 8(a) 8(a)(i) PROFITABILITY ANALYSIS Sales Sales by Geographical Operations (By Entity) For the financial year For the financial year Variance Fav/(Unfav) S$ 000 % of total S$ 000 % of total S$ 000 % Singapore 24, , (2,657) (9.9) Malaysia 12, , UK 10, , , Indonesia 7, , China 4, , The Philippines (51) (11.3) Total 59, , Sales by Location of Customers For the financial year For the financial year Variance Fav/(Unfav) S$ 000 % of total S$ 000 % of total S$ 000 % ASEAN 42, , (1,521) (3.4) North Asia 6, , Europe 4, , , Australia 2, , South Asia 2, , (627) (22.9) North and South America 1, , Middle East (47) (7.6) Others (12) (16.9) Total 59, , The Group sales was relatively flat as compared to. Our Singapore operations, the largest contributor to Group sales, registered a decrease of 9.9% to S$24.1 million. This was due to lower sales in coating and polymerization industries as well as the absence of one-off sales of S$0.4 million in. The decrease in sales was cushioned by higher sales in electronics industry as more products were introduced and continued growth in newer industries such as flavour and fragrance and pharmaceutical. Our manufacturing operations, which is part of the Singapore operations, continued to make progress with a 78.2% increase to S$1.5 million in sales, comprising largely of fee income for providing blending services. The Group s other key segments, Malaysia and Indonesia, registered moderate sales growth. The growth in Malaysia was attributed to higher sales in the food and beverage industry which was a relatively new market. For Indonesia, the growth was seen in the electronics industry as more products were introduced. Our UK and China operations registered reasonable growth of 21.6% and 20.6% respectively. The UK operations continued its growth in Europe, Latin America and Australia markets. Sales at our China operations continued to be strong, growing by 20.6% to S$5.0 million largely due to contribution from its Beijing branch office, fuelled by the booming construction industry. 12

13 8(a)(ii) Gross profit As a result of continued impact of high oil price, higher proportion of sales to lower margin markets and the impact of weakening United States dollar ( USD ), gross margin fell from 21.6% to 20.3%. Consequently, the Group s gross profit decreased by 5.1% to S$12.1 million. 8(a)(iii) Operating expenses For the financial year For the financial year Variance Fav/(Unfav) S$ 000 S$ 000 S$ 000 Distribution costs 6,122 5,513 (608) Administrative expenses 2,836 2, Other operating expenses 1,462 1,417 (46) Total operating expenses 10,420 9,842 (578) The following items have been included in arriving at total operating expenses:- For the financial year For the financial year Variance Fav/(Unfav) S$ 000 S$ 000 S$ 000 Depreciation of property, plant and equipment Employee salaries and related expenses 5,123 4,917 (206) Impairment/(reversal) of doubtful trade receivables 77 (77) (154) Net foreign exchange loss (132) Rental for operating leases (143) Total operating expenses increased by S$0.6 million or 5.9% to S$10.4 million. Distribution costs increased by S$0.6 million or 11.0% to S$6.1 million. The increase in employee salaries and related expenses of S$0.2 million was due to an increased in headcount for marketing. A higher rental for operating leases of S$0.1 million related primarily to warehouse rental which increased as a result of higher stock holding. In addition, there was an impairment of trade receivables of S$77,000 in compared to a reversal of $77,000 in. There was no significant variance noted for administrative expenses which decreased marginally by 2.6% to S$2.8 million. Other operating expenses increased marginally by 3.2% to S$1.5 million. The increase was due to foreign exchange loss of S$132,000 in compared to foreign exchange gain in. Excluding foreign exchange, other operating expenses decreased marginally by S$86,000 13

14 8(a)(iv) Other operating income For the financial year For the financial year Variance Fav/(Unfav) S$ 000 S$ 000 S$ 000 The following items have been included in arriving at other operating income:- Bad debts recovered Interest income - bank Net foreign exchange gain - 11 (11) Payment in lieu of notice received from resigned executive director (271) The decrease of S$226,000 or 46.5% was mainly due to the payment in lieu of notice by an executive director amounting to S$271,000 received in, offset by bad debts recovered of S$47,000. 8(a)(v) Finance costs For the financial year For the financial year Variance Fav/(Unfav) S$ 000 S$ 000 S$ 000 Finance costs Bills payable to banks (63) Hire purchase Bank overdraft Others 9 - (9) (68) The increased of S$68,000 or 29.0% was a result of higher market interest rates. 8(a)(vi) Share of profit of associated company Share of profit of our associated company in Thailand increased by S$0.2 million or 46.5% to S$0.7 million in as sales picked up in. 8(a)(vii) Profit before income tax Profit before income tax decreased by S$1.3 million or 35.7% to S$2.4 million as a result of lower gross profit margin and higher expenses incurred. 8(a)(viii) Net profit for the year attributable to the equity holders of the Company Net profit for the full year attributable to the equity holders of the Company decreased by S$0.8 million or 31.8% to S$1.7 million. 14

15 8(b) BALANCE SHEET ANALYSIS Third party trade receivables increased from S$12.4 million as at to S$14.4 million as at due to higher sales in the second half of the year. Inventory increased from S$13.0 million as at to S$13.9 million as at and turnover increased from 102 days to 107 days primarily due to higher purchases made in second half of the year to meet the increased demand. Consequently, third party trade payables had also increased from S$3.0 million as at to S$4.7 million as at. Financial assets held for trading of S$183,000 represent marketable securities held for trading and the fair value of forward foreign exchange contracts. Similarly, financial liabilities held for trading of S$8,000 represents the fair value of forward foreign exchange contracts as at. Our cash position decreased from S$6.0 million to S$4.5 million primarily due to dividend payment of S$1.3 million. Our borrowings remained relatively the same at S$4.8 million with gearing ratio of 0.17 times. Our liquidity position remained sound with current ratio of 3.01 times and quick ratio of 1.83 times. Our Malaysia subsidiary had entered into a Sale and Purchase Agreement to sell its freehold land in October. The carrying amount of the land of S$0.9 million was reclassified as current Asset held for sale since the transaction is expected to be completed in first quarter of Under the Companies (Amendment) Act that came into effect on 30 January, the concepts of par value and authorised share capital were abolished and the amount in the share premium account as at 30 January became part of the Company s share capital. The changes are explained below: Authorised share capital No of shares Issued share capital Authorised share capital Share capital Amount Share premium Total share capital and share premium S$ S$ S$ S$ Beginning of financial year 300,000, ,300,000 30,000,000 13,330,000 2,562,028 15,892,028 Effect of Companies (Amendment) Act (300,000,000) - (30,000,000) 2,562,028 (2,562,028) - End of financial year - 133,300,000-15,892,028-15,892,028 Net asset per share increased from cents as at to cents as at 31 December. 8(c) CASH FLOW The Group continued to generate positive operating cash flow of S$0.2 million for. The Group also received S$0.1 million for deposit for the sale of freehold land and S$0.3 million of dividend income. The major outflows include the purchase of property, plant and equipment of S$0.4 million and dividend payment of S$1.3 million. The Group maintains a healthy cash position with cash and cash equivalents of S$4.5 million as at 31 December. 9. FORECAST vs ACTUAL In our first half-year results announcement, we stated our prospects for second half of as follows: - The prospects for the second half are uncertain. If the same external factors such as rising oil price and falling USD persist, it will have a negative impact on our profits. Given the imminent challenges ahead, the current trend of lower profits is likely to continue into the second half. While external conditions remained basically the same as first half, our profit after tax for the second half improved by S$0.4 million over the first half as a result of intensified marketing efforts. 15

16 10. RISK The Group believes the imminent risk factors to our financial performance in 2007 are : i. higher interest rates - the higher market interest rates experienced in may continue into 2007 and if so will lead to higher interest expense for the Group. ii. higher oil prices - the higher oil prices may dampen consumer demand which will have an adverse impact on our business. In addition, it may put pressure on our profit margins. However, the impact on specialty chemical products is not as significant compared to commodity chemicals. In the past we were also able to pass part of this higher cost to our customers as the content of specialty chemicals in their formulation is typically small iii. currency volatility - if the volatility in the currency market continues, it may have an adverse impact on our Group s profitability iv. economic growth - any moderation in global economic growth will have an impact on the chemical industry at large. 11. PROSPECTS Our Growth Strategy Going forward, our strategy remains focused on 5 main pillars of growth : i. Increasing our Geographic Coverage Over the last 2 years, the Group pursued a strategy of building and strengthening relationships with our global customer base. This entails having a network that is able to service our large base of MNC customers around the world. In line with this strategy, we had set up a representative office in India in to capitalize on its growing economy. With the India office, we are now present in 3 of the fastest growing economies, mainly China, India and Vietnam. In 2007 we will continue this strategy by exploring to establish a presence in Middle-east. We will also continue to intensify our efforts to build our export business to markets such as South Asia, Australia, Eastern Europe and South America. ii. Enhance our Product Offerings We have secured more distribution rights from suppliers and will continue to enhance our product offerings by constantly seeking new agency products that will increase value to our customers in terms of quality and providing solutions. iii. Widen our Industry Coverage We had increased our diversification in terms of industry coverage in some of the markets that we cover and will continue to extend this approach to other markets in which we operate. This diversification strategy will further increase the resilience of the business. In line with this strategy, we have also expanded our sales force. iv. Build our Manufacturing Capabilities Our manufacturing business, having started its operation in 2003, has continued to grow at a healthy pace. Having expanded 65.4% in its sales in, it continued to grow at 78.2% in. We have secured more business from our customers in our contract manufacturing services. In addition we have also developed and tested new products of which the initial response has been positive. We therefore anticipate further growth in our manufacturing activities in

17 v. Seek Strategic Alliances To accelerate growth, the Group will continue to seek strategic alliances and acquisitions in related businesses that are able to provide a strategic fit. General Outlook for the Group The global specialty chemicals industry is expected to continue to grow in 2007 with the main impetus coming from the Asia-Pacific region. In particular, China, already the third largest market for chemicals, is expected to be the fastest growing country, followed by India. Megachem, with our strong presence in Asia including China and India, hopes to ride on the growth in the industry in However if the risks factors that existed in such as the high oil prices, the high interest rates and currency volatility remain, it may hinder our growth prospects in DIVIDEND (a) Current financial year reported on Any dividend recommend for the financial year? Yes The directors are pleased to recommend a final dividend of 0.52 cents per share less tax ( : final dividend of 0.72 cents per share less tax) in respect of the financial year for approval by the shareholders at the next Annual General Meeting to be convened. Together with the interim dividend of 0.48 cents per share less tax paid in September, total dividend paid and proposed in respect of the financial year will be 1.00 cents per share less tax ( : total dividend of 0.72 cents per share less tax). (b) Dividends paid in the financial years and Dividends paid in the financial year Name of Dividend Interim Final Interim Final In respect of financial year NIL 2004 Dividend Type Cash Cash NIL Cash Dividend Amount per Share (in cents) NIL 10.8 Tax Rate 20% 20% NIL 20% (c) Date payable Date payable for the final dividend to be announced later. (d) Books closure date Books closure date for the final dividend to be announced later. 17

18 13. SEGMENTAL RESULTS Primary reporting format Geographical segments by location of assets Financial year United Singapore Malaysia Indonesia Kingdom Others Elimination Group S$ 000 S$ 000 S$ 000 S$ 000 S$ 000 S$ 000 S$ 000 Sales - External sales 24,057 12,910 7,130 10,295 5,354 59,746 - Inter-segment sales 9, , (12,673) - 33,174 13,676 7,209 12,664 5,696 (12,673) 59,746 Segment result 1,090 1, (142) (919) 1,914 Interest income - bank 72 Finance costs (301) Share of profits of associated company 684 Profit before income tax 2,369 Income tax expense (553) Net profit 1,816 Other segment items Capital expenditure Depreciation United Singapore Malaysia Indonesia Kingdom Others Elimination Group S$ 000 S$ 000 S$ 000 S$ 000 S$ 000 S$ 000 S$ 000 Segment assets 26,121 9,483 4,345 4,427 3,083 (8,431) 39,028 Associated company 1,945 Fixed deposits 1,082 Consolidated total assets 42,055 Segment liabilities (4,306) (1,103) (4,231) (3,252) (3,030) 9,177 (6,745) Borrowings (4,791) Current income tax liabilities (156) Deferred income tax liabilities (18) Consolidated total liabilities (11,710) 18

19 United Singapore Malaysia Indonesia Kingdom Others Elimination Group S$ 000 S$ 000 S$ 000 S$ 000 S$ 000 S$ 000 S$ 000 Financial year Sales - External sales 26,714 12,746 6,830 8,466 4,560 59,316 - Inter-segment sales 9, , (13,869) - 36,548 13,482 7,249 11,312 4,594 (13,869) 59,316 Segment result 2,366 1, (138) (533) 3,389 Interest income - bank 59 Finance costs (233) Share of results of associated company 467 Profit before income tax 3,682 Income tax expense (965) Net profit 2,717 Other segment items Capital expenditure Depreciation Amortisation United Singapore Malaysia Indonesia Kingdom Others Elimination Group S$ 000 S$ 000 S$ 000 S$ 000 S$ 000 S$ 000 S$ 000 Segment assets 27,944 8,709 4,066 3,059 3,137 (9,496) 37,419 Associated company 1,467 Fixed deposits 1,344 Consolidated total assets 40,230 Segment liabilities (5,372) (667) (4,027) (2,123) (2,963) 10,277 (4,875) Borrowings (4,855) Current income tax liabilities (612) Deferred income tax liabilities (81) Consolidated total liabilities (10,423) Geographical market of the customers The following details show the distribution of the Group s consolidated sales based on the countries in which the customers are located : S$ 000 S$ 000 External sales revenue Singapore 18,376 19,753 Malaysia 13,812 14,133 Indonesia 7,585 7,618 China 5,513 4,633 UK and Europe 4,208 2,797 Others 10,252 10,382 59,746 59,316 Secondary reporting format Business segments As the Group operates substantially in one business segment which is the blending and trading in chemicals and chemical-related products, no other segment information by business segment is presented. 19

20 14. In the review of performance, the factors leading to any material changes in contributions to sales and earnings by the business or geographical segments Please see section 8 above. 15. BREAKDOWN OF SALES Group Financial year 31 December S$ 000 Financial year 31 December S$ 000 Variance (decrease)/ increase % (a) Sales for first half year 28,425 30,108 (5.6%) (b) Sales for second half year 31,321 29, % Fav/(unfav) variance (H2 vs H1) 2,896 (900) Fav/(unfav) variance % (H2 vs H1) 10.2% (3.0%) (c) Profit after tax and before attributing to minority interests for first half year 710 1,165 (39.1%) (d) Profit after tax and before attributing to minority interests for second half year 1,106 1,552 (28.7%) Fav/(unfav) variance (H2 vs H1) Fav/(unfav) variance % (H2 vs H1) 55.9% 33.2% 16. BREAKDOWN OF DIVIDEND PAID (in dollar value) Financial year 31 Financial year 31 December December S$ S$ Ordinary 1,279,680 1,151,712 20