For the twelve months ended 31 December 2015 (“FY2015”), the Group’s primary business continued to be the manufacturing and sale of a wide range of precision elastomeric components used in the manufacture of office automation equipment, lifestyle products, consumer electronics, automotive equipment and other industrial applications. Our elastomeric production capabilities range from material formulation, to compounding, moulding and other secondary processes customised to the specific requirements of customers.
The Group’s production facilities are located in Batam, Indonesia, Johor Bahru, Malaysia and Suzhou, PRC, with the sales office in Singapore. Our customers include multi-national corporations in Asia, Europe, and America and include household brand-names such as Dyson, Philips, Tyco and Shimano.
In terms of geographical spread, Malaysia accounted for 47% of revenue, followed by Singapore with a 21% contribution to revenue. PRC contributed 17% of revenue while Indonesia accounted for the remaining 15%. The difference in revenue was partly attributed to the difference in products and services for each country.
On 27 April 2015, the Group announced that it had completed the sale of its power generation system equipment in Myanmar to Tembusu Industries Pte Ltd and the full amount of the consideration of USD2.214 million has been received.
In FY2015, the Group closed down two business units in Hong Kong and Malaysia respectively and classified the energy/power segment as discontinued operations in FY2015 and reported a loss attributable to owners of $64,000.
The Group’s revenue in FY2015 was $15.31 million, a 1.4% decline from $15.53 million. Goods and services are sold in the local currency in each of our markets, but converted into Singapore dollar (“SGD”) for the financial statement. Due to the volatility and the decline of the Malaysian Ringgit (“MYR”) and Indonesian Rupiah(“IDR”) against the SGD in FY2015, the Group’s revenue was affected negatively.
The revenue from the elastomeric business unit in Malaysia increased by 8.7%. However, due to the depreciation of the MYR against the SGD, the revenue from Malaysia, when reported in SGD, dipped by 0.9%.
Gross profit in FY2015 grew by 2.6% to $5.09 million on the back of lower manufacturing expenses and higher gross margin recorded. Gross profit margin was healthy and increased from 32.0% for FY2014 to 33.3% for FY2015 due to reasons stated above. However the business environment for the Group’s business was extremely challenging, and it was difficult to increase the volume of sales for our products.
Distribution costs and administrative expenses increased by 10.4% in FY2015 to $6.76 million mainly due to the increase of staff-related costs, depreciation, legal fees, rental fee, ERM implementation fee and repair & maintenance expenses.
Event subsequent to financial period of reporting twelve months ended 31 December 2015 in relation to the disposal of Greatly Holdings Investment Limited.
On 15 January 2016, the Board updated that Mr. Tan Jian You (the “Purchaser”) made part-payment of the consideration for completion by way of the transfer of 1,120,000 and 6,704,000 quoted securities in Abterra Ltd (the “Listed Shares”), a company listed on the Main Board of the SGX-ST on 31 July 2015 and 21 August 2015 respectively. The Company and the Purchaser agreed that the valuation of the Listed Shares would be based on its closing price as at 11 January 2016. Based on the closing price of the Listed Shares, and the SGD-Renminbi (“RMB”) exchange rate as at 14 January 2016, (the day before the Group’s announcement on SGX-ST), an amount of approximately $3,286,080 has been settled with regard to the Sale and Purchase Agreement for Greatly Holdings Investment Limited.
As at 31 December 2015, the total non-current assets of the Group increased by $0.13 million to $16.24 million compared to $16.11 million in the year-ago period. This was mainly due to the partial reversal of reclassification of the investment of Tianjin Swan Lake (“TJSL”) of $3.45 million which was previously grouped as disposal group classified as held for sale. The Company received the partial payment the Purchaser by way of the transfer of 1,120,000 and 6,704,000 quoted securities in the Listed Shares on 31 July 2015 and 21 August 2015 respectively.
The depreciation of plant and equipment of $0.96 million, plant and equipment written off of $0.01 million and the foreign currency translation loss for plant and equipment in overseas operations of $141,000 was offset by the purchase of new plant and equipment of $1.87 million and gain on disposal of plant and equipment of $0.56 million.
The Group’s current assets amounted to $21.02 million as at 31 December 2015, a decrease of $4.22 million compared to the previous year. Inventories decreased by $95,000 and trade and other receivables decreased by $2.23 million due to better cash flow management by the elastomeric business unit.
Cash and cash equivalents decreased by $5.30 million mainly due to the payment for finance leases & borrowings of $8.03 million, purchase of new plant and equipment assets under construction of $1.83 million offset against the new increase of bank borrowings of $1.21 million and cash inflow for disposal of plant and equipment $3.05 million.
Total liabilities of the Group as at 31 December 2015 decreased by $3.92 million to $15.87 million compared to $19.79 million as at 31 December 2014. During the period, the Group had repaid its bank borrowings of approximately $8.03 million offset against the additional borrowings of $1.21 million. The Group had also paid the income tax of $0.66 million.
Trade and other payables of $13.11 million was recorded as at 31 December 2015, an increase of $1.50 million mainly due to partial payment received from the purchaser for the disposal of TJSL.
Deferred tax as at 31 December 2015 decreased by $0.11 million mainly due to the foreign currency translation gain in overseas operations.Total Equity
Total equity decreased by $0.17 million to $21.38 million as at 31 December 2015, from $21.55 million a year earlier. While retained earnings decreased by $2.53 million during the year, the increase in losses from foreign currency translation reserve which was mainly due to the depreciation of the MYR & IDR against SGD and the appreciation of the RMB against SGD and loss attributable to non-controlling interest reduced the effect of higher retained earnings on total equity.
Based on the share capital of approximately 140.7 million shares, the Group’s net asset value per ordinary share decreased 1.7% to 15.92 cents as at 31 December 2015.