DRAGON GROUP INTERNATIONAL LIMITED Company Regn. No. 199306761C (Incorporated in the Republic of Singapore) Results For The Financial Year Ended 31 December 2011 The Directors are pleased to make the following announcement of the unaudited results for the financial year ended 31 December 2011. 1(a) (i) An income statement and statement of comprehensive income or a statement of comprehensive income for the group together with a comparative statement for the corresponding period of the immediately preceding financial year. Fourth Quarter Ended Full Year Ended US$'000 % US$'000 % 31/12/11 31/12/10 Change 31/12/11 31/12/10 Change Revenue 63,035 61,106 3% 252,824 216,350 17% Cost of sales (57,977) (55,876) 4% (231,033) (196,646) 17% Gross profit 5,058 5,230-3% 21,791 19,704 11% Other operating income 380 212 79% 798 814-2% Selling and marketing costs (2,698) (2,503) 8% (10,758) (9,163) 17% General and administrative costs (1,923) (2,530) -24% (8,311) (8,508) -2% Foreign currency exchange gain/(loss) (240) 153 nm 76 (97) nm Total operating expenses (4,861) (4,880) 0% (18,993) (17,768) 7% Operating profit 577 562 3% 3,596 2,750 31% Finance costs (419) (431) -3% (2,133) (2,169) -2% Exceptional items - (228) nm - (228) nm Share of net loss of associated companies - (3) nm - (12) nm Profit/(loss) before taxation 158 (100) nm 1,463 341 nm Taxation (137) 489 nm (656) 288 nm Profit after taxation 21 389-95% 807 629 28% Attributable to: Equity holders of the Company 27 421-94% 853 663 29% Non-controlling interests (6) (32) -81% (46) (34) 35% 21 389-95% 807 629 28% nm - Not meaningful P1
1(a) (ii) The following items (with appropriate breakdowns and explanations), if significant, must either be included in the income statement or in the notes to the income statement for the current financial period reported on and the corresponding period of the immediately preceding financial year. Notes to Income Statement Fourth Quarter Ended Full Year Ended US$'000 % US$'000 % 31/12/11 31/12/10 Change 31/12/11 31/12/10 Change Interest on borrowing (411) (393) 5% (1,579) (1,697) -7% Depreciation and amortisation (168) (319) -47% (1,184) (1,296) -9% Write-back/(provision) for doubtful debts 75 26 nm (11) 18 nm (Provision)/write-back for stock obsolescence (66) 44 nm (44) 1,124 nm nm - Not meaningful 1(a) (iii) A statement of comprehensive income for the group together with a comparative statement for the corresponding period of the immediately preceding financial year. Fourth Quarter Ended Full Year Ended US$'000 % US$'000 % 31/12/11 31/12/10 Change 31/12/11 31/12/10 Change Net profit for the period 21 389-95% 807 629 28% Other comprehensive income:- Foreign currency translation 283 222 27% 491 409 20% Gain on deregistration of subsidiary - - nm (37) - nm Realisation of reserve of disposal group classified - - nm - 439 nm as held for sale Total comprehensive income for the period 304 611-50% 1,261 1,477-15% Total comprehensive income attributable to :- Equity holders of the Company 477 573-17% 1,307 1,379-5% Non-controlling interests (173) 38 nm (46) 98 nm 304 611-50% 1,261 1,477-15% nm - Not meaningful P2
1(b)(i) A statement of Financial Position (for the issuer and group), together with a comparative statement as at the end of the immediately preceding financial year. Company US$'000 US$'000 31/12/11 31/12/10 31/12/11 31/12/10 ASSETS Non-current assets Intangible assets 5,406 5,957 102 102 Property, plant and equipment 6,266 5,171 39 48 Investments in subsidiary companies - - 33,326 33,122 Available-for-sale financial assets 737 750 706 706 Amounts due from subsidiary companies - - 5,970 5,970 Deferred tax assets 257 281 - - 12,666 12,159 40,143 39,948 Current assets Stocks 25,368 20,773 - - Prepayments 337 467 29 31 Amounts due from subsidiary companies - - 1,006 1,632 Trade debtors 59,012 59,218 - - Other debtors 1,471 1,323 94 92 Cash and bank balances 20,762 23,943 341 3,840 106,950 105,724 1,470 5,595 TOTAL ASSETS 119,616 117,883 41,613 45,543 EQUITY AND LIABILITIES Current liabilities Amounts due to bankers 46,519 44,957 - - Trade creditors and accruals 32,509 31,885 362 344 Other creditors 2,840 3,991 183 453 Amount due to holding company 33 412 33 412 Amounts due to subsidiary companies - - 15,367 15,699 Provision for taxation 273 226 11 20 82,174 81,471 15,956 16,928 NET CURRENT ASSETS/(LIABILITIES) 24,776 24,253 (14,486) (11,333) Non-current liabilities Deferred tax liabilities 378 477 - - Long-term payables 473 369 - - 851 846 - - TOTAL LIABILITIES 83,025 82,317 15,956 16,928 NET ASSETS 36,591 35,566 25,657 28,615 Equity attributable to equity holders of the Company Share capital 54,928 54,928 54,928 54,928 Capital reserve 2,103 2,140 - - Other reserve 18 - - - Foreign currency translation reserve (5,651) (5,969) - - Accumulated losses (18,831) (19,684) (29,271) (26,313) 32,567 31,415 25,657 28,615 Non-controlling interests 4,024 4,151 - - TOTAL EQUITY 36,591 35,566 25,657 28,615 TOTAL EQUITY AND LIABILITIES 119,616 117,883 41,613 45,543 P3
1(b)(ii) Aggregate amount of group's borrowings and debt securities. Amount repayable in one year or less, or on demand Amount repayable after one year Details of any collateral Not applicable. As at 31/12/2011 Secured Unsecured Secured Unsecured US$'000 US$'000 US$'000 US$'000 1,405 45,114 2,802 42,155 As at 31/12/2011 As at 31/12/2010 As at 31/12/2010 Secured Unsecured Secured Unsecured US$'000 US$'000 US$'000 US$'000 - - - - 1(c) A statement of cash flow (for the group), together with a comparative statement for the corresponding period of the immediately preceding financial year US$'000 31/12/11 31/12/10 Cashflow from operating activities Operating profit before taxation 1,463 341 Adjustment for:- Non cash items 2,808 2,637 Operating cash flow before reinvestment in working capital 4,271 2,978 Movement in working capital (4,462) (14,005) Cash used in operations (191) (11,027) Interest paid (1,579) (1,697) Interest received 91 85 Tax paid (781) (768) Net cash used in from operating activities (2,460) (13,407) Cashflow from investing activities Proceeds on disposal of property, plant and equipment 9 476 Purchase of property, plant and equipment (1,559) (1,006) Investment in an associated company - (3) Proceeds from sale of subsidiaries - 4,464 Project development expenditure (149) (27) Net cash (used in)/generated from investing activities (1,699) 3,904 Cashflow from financing activities Repayment to lease creditors - (100) Change in amount due to holding company (353) (5,169) Change in amounts due to bankers 1,562 5,374 Change in convertible loan - (554) Decrease/(increase) in restricted cash 1,408 (2,802) Dividend paid to non-controlling interests (32) (103) Acquisition of non-controlling interests (204) - Proceeds from issuance of shares pursuant to Rights Issue - 13,622 Share issuance expenses - (538) Net cash generated from financing activities 2,381 9,730 Net (decrease)/increase in cash and cash equivalents (1,778) 227 Cash and cash equivalents at beginning of year 21,141 20,735 Effect of exchange rate changes on cash and cash equivalents (6) 179 Cash and cash equivalents at 31 December 19,357 21,141 Cash and cash equivalents Cash and cash equivalents consist of cash on hand, current accounts with banks and short term deposits. Cash and cash equivalents included in the consolidated cash flow statement comprise the following amount in the statement of financial position: Cash and bank balances 20,762 23,943 Less: Pledged fixed deposit (1,405) (2,802) 19,357 21,141 P4
1(d)(i) A statement (for the 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. Attributable to equity holders of the company Foreign Reserve of Equity Share Capital Other Currency Accumulated disposal group attributable Non- Equity Capital Reserve Reserve Translation Losses classified as to owners of controlling Total Reserve held for sale parent, Total Interests US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 At 1 January 2011 54,928 2,140 - (5,969) (19,684) - 31,415 4,151 35,566 Profit for the year - - - - 853-853 (46) 807 Other comprehensive income Gain on deregistration of subsidiary - (37) - - - - (37) - (37) Foreign currency translation - - 318 - - 318 173 491 Other comprehensive income for the year, net of tax - (37) - 318 - - 281 173 454 - Total comprehensive income for the year Contributions by and distributions to equity holders - (37) - 318 853-1,134 127 1,261 - - Dividend paid to non-controlling interests - - - - - - - (32) (32) Total transactions with equity holders in their capacity - - - - - - - (32) (32) as equity holders - Changes in ownership interests in subsidiaries Acquisition of non-controlling interests without a change - - 18 - - - 18 (222) (204) in control Total changes in ownership interests in subsidiaries - - 18 - - - 18 (222) (204) At 31 December 2011 54,928 2,103 18 (5,651) (18,831) - 32,567 4,024 36,591 P5
1(d)(i) A statement (for the 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. (Cont'd) Foreign Reserve of Equity Share Capital Other Currency Accumulated disposal group attributable Non- Equity Capital Reserve Reserve Translation Losses classified as to owners of controlling Total Reserve held for sale parent, Total Interests US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 At 1 January 2010 41,844 2,140 - (6,246) (20,347) (439) 16,952 4,156 21,108 Profit for the year - - - - 663-663 (34) 629 Other comprehensive income Foreign currency translation - - - 277 - - 277 132 409 Realisation of reserve of disposal group classified as held for - - - - - 439 439-439 sale in prior year Other comprehensive income for the year, net of tax - - - 277-439 716 132 848 Total comprehensive income for the year Contributions by and distributions to equity holders Attributable to equity holders of the company - - - 277 663 439 1,379 98 1,477 - - Issuance of shares pursuant to Rights Issue 13,622 - - - - - 13,622-13,622 Share issuance expenses (538) - - - - - (538) - (538) Dividend paid to non-controlling interests - - - - - - (103) (103) Total transactions with equity holders in their capacity 13,084 - - - - - 13,084 (103) 12,981 as equity holders At 31 December 2010 54,928 2,140 - (5,969) (19,684) - 31,415 4,151 35,566 - P6
1(d)(i) A statement (for the issuer and group) showing either (i) all changes in equity or (ii) changes in equity other than those arising from capitalisation issues and distributions to shareholders, together with a comparative statement for the corresponding period of the immediately preceding financial year - Cont'd Share Accumulated Equity Company At 1 January 2011 Capital Losses Total US$'000 US$'000 US$'000 54,928 (26,313) 28,615 Loss for the year - (2,958) (2,958) Other comprehensive income for the year, net of tax - - - Total comprehensive income for the year - (2,958) (2,958) At 31 December 2011 54,928 (29,271) 25,657 Company At 1 January 2010 Share Accumulated Equity Capital Losses Total US$'000 US$'000 US$'000 41,844 (22,341) 19,503 Loss for the year - (3,972) (3,972) Other comprehensive income for the year, net of tax - - - Total comprehensive income for the year - (3,972) (3,972) Contributions by and distributions to equity holders Issue of shares pursuant to Rights Issue 13,622-13,622 Share issuance expenses (538) - (538) Total transactions with equity holders in their capacity as equity holders 13,084-13,084 At 31 December 2010 54,928 (26,313) 28,615 P7
1(d)(ii) Details of any changes in the Company's share capital arising from rights 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 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 the outstanding convertibles, as well as the number of shares held as treasury shares, if any, against the total number of issued shares excluding treasury shares of the issuer, as at end of the current financial period reported on and as at end of the corresponding period of the immediately preceding financial year. During the financial year, there was no change in the Company's share capital. The Dragon Executives' Share Option Scheme has expired on 15 July 2011. Under the Rights cum Warrants issue, there are 224,081,412 of unexercised Warrants as at 31 December 2011. (31 December 2010: 224,081,412 unexercised Warrants) 1(d)(iii) To show the total number of issued shares excluding treasury shares as at the end of the current financial period and as at the end of the immediate preceding year. Company 31/12/11 31/12/10 31/12/11 31/12/10 Total number of issued shares 280,101,783 280,101,783 280,101,783 280,101,783 Less: Treasury shares - - - - Total number of issued shares excluding treasury shares 280,101,783 280,101,783 280,101,783 280,101,783 1(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 (e.g. the Singapore Standard on Auditing 910 (Engagements to Review Financial Statements), or an equivalent standard). These figures have not been audited nor reviewed by the auditors. 3. Where 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. The has adopted the revised FRS 24 Related Party Disclosures for the financial year ended 31 December 2011. The revised standard is effective for annual periods beginning on or after 1 January 2011. The revised FRS 24 clarifies the definition of a related party to simplify the identification of such relationships and to eliminate inconsistencies in its applications. The revised FRS 24 expands the definition of a related party and would treat two entities as related to each other whenever a person (or a close member of that person's family) or a third party has control or joint control over the entity, or has significant influence over the entity. The revised standard also introduces a partial exemption of disclosure requirements for government-related entities. As this is a disclosure standard, the abovementioned change will have no impact on the financial position or financial performance of the. P8
5. 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. See paragraph 4 above. 6. Earnings per ordinary share of the group for the current period reported on and the corresponding period of the immediately preceding financial year, after deducting any provision for preference dividends. Earnings per ordinary share for the year based on net profit attributable to shareholders after deducting any provision for preference dividends:- 31/12/11 31/12/10 a) Based on weighted average number of ordinary shares in issue 0.30 cents 0.24 cents Weighted average number of shares 280,101,783 280,101,783 b) On a fully diluted basis 0.30 cents 0.24 cents Adjusted weighted average number of shares 280,101,783 280,101,783 7. Net assets value (for the issuer and group) per ordinary share based on the total number of issued shares excluding treasury shares of the issuer at the end of the:- (a) current financial period reported on; and (b) immediately preceding financial year. Company 31/12/11 31/12/10 31/12/11 31/12/10 Net assets value per ordinary share based on issued share capital as at the end of the period reported on 11.63 cents 11.22 cents 9.16 cents 10.22 cents Net assets value for the and the Company per ordinary share was calculated based on 280,101,783 ordinary shares as at 31 December 2011 and 31 December 2010. 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, costs, and earnings of the group for the current financial period reported on, including (where applicable) seasonal or cyclical factors; and (b) any material factors that affected the cash flow, working capital, assets or liabilities of the group during the current financial period reported on. INCOME STATEMENT REVIEW Revenue revenue for the year ended 31 December 2011 was $252.8 million, an increase from $216.4 million in the previous year. For the fourth quarter, revenue increased by 3.2% to $63.0 million from $61.1 million in 4Q2010. The increase in revenue contribution from the Electronics Distribution business is mainly attributable to higher demand from South Asia and China. The latter being contributions from customers in telecommunication infrastructure projects. P9
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, costs, and earnings of the group for the current financial period reported on, including (where applicable) seasonal or cyclical factors; and (b) any material factors that affected the cash flow, working capital, assets or liabilities of the group during the current financial period reported on. INCOME STATEMENT REVIEW (CONT'D) Gross profit In tandem with higher revenue generated for the year ended 31 December 2011, gross profit increased to $21.8 million from $19.7 million in the previous corresponding year. Gross profit for 4Q2011 has decreased by 3.3% to $5.1 million compared to $5.2 million in 4Q2010. Operating expenses Operating expenses increased to $19.0 million compared to $17.8 million in the previous corresponding year. This is in line with the higher business activities during the year. For 4Q2011, operating expenses remained consistent at $4.9 million as compared to 4Q2010. Financing costs for the year ended 31 December 2011 remained comparable to the previous year. Profit after taxation and non-controlling interests In line with the above factors, the reported a profit of $0.8 million for the year ended 31 December 2011, an increase of 28.3% compared to the year ended 31 December 2010. FINANCIAL POSITION STATEMENT REVIEW Property, plant and equipment Property, plant and equipment increased from $5.2 million as at 31 December 2010 to $6.3 million as at 31 December 2011 due mainly to an increase in construction in progress for the project in Nanjing. Stocks Stocks increased from $20.8 million as at 31 December 2010 to $25.4 million as at 31 December 2011 in anticipation of customers' demand. Amounts due to bankers Amounts due to bankers increased to $46.5 million as at 31 December 2011 largely due to higher stocks level. 9. CASH FLOW STATEMENT REVIEW A total of $2.5 million was used in operating activities for the year ended 31 December 2011, mainly funded by bank borrowings. Cash and cash equivalents decreased by 8.4% to $19.4 million as at 31 December 2011 compared to $21.1 million as at 31 December 2010. Where a forecast, or a prospect statement, has been previously disclosed to shareholders, any variance between it and the actual results. Not applicable. P10
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 has maintained its profitability for the year ended 31 December 2011. However, in view of the short business visibility due to the on-going global economic uncertainties, the remained cautious about its performance in the first quarter of FY2012. Our business is prone to economic uncertainties and the cyclical nature of the semiconductor industry. Other unforeseeable factors including but not limited to foreign exchange fluctuations, intellectual property litigations, product and technology obsolescence, inventory adjustments will be among the challenges that we will continually encounter. In view of these factors, we will remain prudent and cautious in the management of our business. 11. Dividend (a) Current Financial Period Reported On Any dividend declared for the current financial period reported on? None. (b) Corresponding Period of the Immediately Preceding Financial Year Any dividend declared for the corresponding period of the immediately preceding financial year? None. (c) Date Payable Not applicable. (d) Books closure date Not applicable. 12. If no dividend has been declared/recommended, a statement to that effect. No dividend has been declared. 13. If the has obtained a general mandate from shareholders for IPTs, the aggregate value of such transactions as required under Rule 920(1)(a)(ii). If no IPT mandate has been obtained, a statement to that effect. No IPT mandate has been obtained. ASTI Name of Interested Person Aggregate value of all interested person transactions during the financial year under review (excluding transactions less than S$100,000 and transactions conducted under shareholders mandate pursuant to Rule 920) US$'000 399 Aggregate value of all interested person transactions conducted during the financial year under review under shareholders mandate pursuant to Rule 920 (excluding transactions less than S$100,000) US$'000 - P11
14. Segmental revenue and results for business or geographical segments (of the group) in the form presented in the issuer's most recently audited annual financial statements, with comparative information for the immediately preceding year. Business Segment Information: Revenue 2011 2010 Segment US$'000 US$'000 Electronics 252,824 216,350 Total 252,824 216,350 Geographical Segment Information: Revenue 2011 2010 Region US$'000 US$'000 Singapore 27,560 33,328 Malaysia 16,968 12,423 Philippines 617 3,152 Thailand 4,070 3,011 Indonesia 2,162 1,409 India 10,404 10,076 China 172,612 138,531 Hong Kong 4,931 2,560 Taiwan 441 - Korea 7,303 11,860 United Kingdom 4,117 - Others 1,639 - Total 252,824 216,350 15. In the review of performance, the factors leading to any material changes in contributions to turnover and earnings by the business or geographical segment. Please refer to note 8. 16. A breakdown of sales. Please refer to note 15. 17. A breakdown of the total annual dividend (in dollar value) for the issuer's latest full year and its previous full year. Not applicable 18. Disclosure of person occupying a managerial position in the issuer or any of its principal subsidiaries who is a relative of a director or chief executive officer or substantial shareholder of the issuer pursuant to Rule 704(11) in the format below. If there are no such persons, the issuer must make an appropriate negative statement. There is no person occupying a managerial position in the issuer or any of its principal subsidiaries who is a relative of a director or chief executive officer or substantial shareholder of the issuer. BY ORDER OF THE BOARD Dato' Michael Loh Chairman & CEO 25 February 2012 P12