FINANCIAL STATEMENTS AND DIVIDEND ANNOUNCEMENT FOR...
Transcript of FINANCIAL STATEMENTS AND DIVIDEND ANNOUNCEMENT FOR...
(Incorporated in the Republic of Singapore) (Company Registration No. 200401894D)
FINANCIAL STATEMENTS AND DIVIDEND ANNOUNCEMENT FOR THE YEAR ENDED 31 DECEMBER 2012
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PART I - INFORMATION REQUIRED FOR ANNOUNCEMENTS OF HALF-YEAR AND FULL YEAR RESULTS INTRODUCTION Chaswood Resources Holdings Ltd (“the Company” or “legal parent”) completed its acquisition of Chaswood Resources Sdn Bhd (“the Acquisition”) via a Reverse TakeOver (“RTO”) exercise on 1 March 2012. The Acquisition has been accounted as a RTO and the legal subsidiary, Chaswood Resources Sdn Bhd, is regarded as the acquirer and the Company, previously known as Asia Silk Holdings Limited (“Asia Silk”) before completion on 1 March 2012, as the acquiree, for accounting purposes. As such, the consolidated financial statements have been prepared and presented as a continuation of Chaswood Resources Sdn Bhd and its subsidiaries (“Chaswood Group” or “Group”). The above accounting treatment is only applied to the consolidated financial statements of the Group. At the Company level, the investment in Chaswood Resources Sdn Bhd is accounted for as an investment in a subsidiary. BASIS OF PREPARATION OF THE FINANCIAL STATEMENTS At Group Level The Acquisition has been accounted for as a reverse acquisition in accordance to FRS103 Business Combinations, and Chaswood Resources Sdn Bhd is deemed to be the acquirer for accounting purposes. Accordingly, the consolidated income statement, consolidated balance sheet, consolidated statement of changes in equity and consolidated cash flow statement for the twelve month period ended 31 December 2012 have been presented as a continuation of the Chaswood Group financial results and operations. Since such consolidated financial statements represent a continuation of the Chaswood Group: (a) the assets and liabilities of the Chaswood Group are recognised and measured in the consolidated
balance sheet at their pre-combination carrying amounts; (b) the assets and liabilities of Asia Silk, the acquiree, are recognised and measured in accordance to
FRS103; (c) the retained earnings and other equity balances recognised in the consolidated financial statements
are the retained earnings and other equity balances of the Chaswood Group immediately before the business combination;
(d) the amount recognised as issued equity interest in the consolidated financial statements is
determined by adding to the issued equity of Chaswood Group immediately before the business combination to the fair value of Asia Silk. However, the equity structure appearing in the consolidated financial statements (i.e. the number and type of equity instruments issued) shall reflect the equity structure of the legal parent (i.e. the Company), including the equity instruments issued by the legal parent (i.e. the Company) to effect the combination; and
(e) the comparative figures presented in these consolidated financial statements are that of consolidated
financial statements of the Chaswood Group.
(Incorporated in the Republic of Singapore) (Company Registration No. 200401894D)
FINANCIAL STATEMENTS AND DIVIDEND ANNOUNCEMENT FOR THE YEAR ENDED 31 DECEMBER 2012
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Consolidated financial statements prepared following a reverse acquisition shall reflect the fair values of the assets, liabilities and contingent liabilities of the legal parent (i.e. the acquiree for accounting purposes). Therefore, the cost of the business combination for the acquisition is allocated to the identifiable assets, liabilities and contingent liabilities of the legal parent that satisfy the recognition criteria at their fair values at 1 March 2012. At Company Level Reverse acquisition accounting applies only at the consolidated financial statements at the Group level. Therefore, in the Company’s financial statements, the investment in the legal subsidiaries (Chaswood Group) is accounted for at cost less accumulated impairment losses, if any, in the Company’s balance sheet. Notes: • The consolidated income statement, consolidated cash flow statement and consolidated statement of changes in equity for the 12 month period ended 31 December 2012 refers to the enlarged group which consists of the results of Chaswood Group for the period from 1 January 2012 to 31 December 2012 and results of Asia Silk from 1 March 2012, acquisition date, to 31 December 2012.
• The consolidated income statement, consolidated cash flow statement and consolidated statement of changes in equity for the 12 month period ended 31 December 2011 refers to the results of the Chaswood Group for the period from 1 January 2011 to 31 December 2011.
• The consolidated balance sheet as at 31 December 2012 refers to the enlarged group which consists of the assets and liabilities of Chaswood Group and Asia Silk as at 31 December 2012.
• The consolidated balance sheet as at 31 December 2011 refers to the balance sheet of Chaswood Group. • The Company’s balance sheet as at 31 December 2012 and 31 December 2011 and statement of changes in equity for the 12 month period ended 31 December 2012 and 31 December 2011 refer to that of Asia Silk.
(Incorporated in the Republic of Singapore) (Company Registration No. 200401894D)
FINANCIAL STATEMENTS AND DIVIDEND ANNOUNCEMENT FOR THE YEAR ENDED 31 DECEMBER 2012
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1(a)(i) An income statement (for the group) together with a comparative statement for the
corresponding period of the immediately preceding financial period.
Consolidated statements of comprehensive income
2nd HALF-YEAR ENDED
31 DECEMBER YEAR ENDED 31 DECEMBER
2012 2011 Increase/ (Decrease) 2012 2011
Increase/ (Decrease)
RM'000 RM'000 % RM'000 RM'000 %
(Unaudited) (Unaudited) (Unaudited) (Audited)
Revenue 77,064 63,684 21.0% 149,742 123,006 21.7%
Cost of sales (24,330) (19,705) 23.5% (47,514) (39,319) 20.8%
Gross profit/Gross margin 52,734 43,979 19.9% 102,228 83,687 22.2%
Other Items of Income
Interest income 55 31 N.M 98 55 N.M
Other credits 273 215 N.M 5,070 330 N.M
Other Items of Expense
Marketing and distribution costs (4,614) (2,349) 96.5% (7,721) (4,678) 65.1%
Administrative expenses (46,926) (32,779) 43.2% (88,448) (61,897) 42.9%
Finance costs (665) (736) -9.6% (1,344) (1,223) 9.9%
Other charges (2,643) - N.M (12,406) (322) N.M
Other expenses (3,251) (2,089) 55.6% (5,563) (3,928) 41.6%
(Loss)/Profit before taxation (5,037) 6,272 N.M (8,086) 12,024 N.M
Income tax expense (1,301) (1,889) -31.1% (3,832) (3,586) 6.9%
(Loss)/Profit after taxation (6,338) 4,383 N.M (11,918) 8,438 N.M
Other comprehensive (expense)/income, net of tax:-
Exchange differences on translating foreign operations
(10)
(1)
-
153
(4)
N.M
Total comprehensive (expense)/income of the period, net of tax
(6,348)
4,382
N.M
(11,765)
8,434
N.M
(Loss)/Profit after taxation attributable to:-
Owners of the Company (6,131) 4,383 N.M (11,711) 8,438 N.M
Non-controlling interests (207) - N.M (207) - N.M
(6,338) 4,383 N.M (11,918) 8,438 N.M
Total comprehensive (expense)/income attributable to:-
Owners of the Company (6,141) 4,382 N.M (11,558) 8,434 N.M
Non-controlling interests (207) - N.M (207) - N.M
(6,348) 4,382 N.M (11,765) 8,434 N.M
N.M: Not meaningful
(Incorporated in the Republic of Singapore) (Company Registration No. 200401894D)
FINANCIAL STATEMENTS AND DIVIDEND ANNOUNCEMENT FOR THE YEAR ENDED 31 DECEMBER 2012
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1(a)(ii) An income statement (for the group) together with a comparative statement for the corresponding period of the immediately preceding financial period.
The Group’s (loss)/profit before taxation is arrived at after charging/(crediting):
2nd HALF-YEAR ENDED 31 DECEMBER
YEAR ENDED 31 DECEMBER
2012 2011 Increase/ (Decrease) 2012 2011
Increase/ (Decrease)
RM’000 RM’000 % RM’000 RM’000 %
(Unaudited) (Unaudited) (Unaudited) (Audited)
Depreciation of property and equipment
2,644
1,990
32.9%
4,831
3,735
29.3%
Amortisation of franchise fees 222 97 N.M 340 170 N.M
Franchise fee written off 111 - N.M 111 - N.M
Equipment written off 2,532 - N.M 4,510 322 N.M Goodwill arising from the RTO exercise written off
-
- N.M 7,785 - N.M
Fees incurred in relation to RTO exercise - - N.M 2,623 - N.M
Compensation from a third party - - N.M (4,706) - N.M
Interest Income (55) (31) N.M (98) (55) N.M
Gain on disposal of equipment (40) (93) N.M (40) (149) N.M
(Incorporated in the Republic of Singapore) (Company Registration No. 200401894D)
FINANCIAL STATEMENTS AND DIVIDEND ANNOUNCEMENT FOR THE YEAR ENDED 31 DECEMBER 2012
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1(b)(i) A balance sheet (for the issuer and group), together with a comparative statement as at the end of the immediately preceding financial year.
Consolidated statements of financial position
The Group The Company
31 December 2012
31 December 2011
31 December 2012
31 December 2011 2012 2011 2012 2011
RM'000 RM'000 RM'000 RM'000
(Unaudited) (Audited) (Unaudited) (Audited)
ASSETS Non-Current Assets
Property and equipment 63,799 46,731 - -
Intangible assets 11,053 8,564 920 -
Other assets, non-current 5,536 5,082 - -
Investments in subsidiaries - - 150,954 4,442
Total Non-Current Assets 80,388 60,377 151,874 4,442
Current Assets
Inventories 2,886 2,772 - -
Trade receivables 2,118 2,427 - -
Other assets 6,239 7,171 18 494
Amount owing by subsidiaries - - 4,987 -
Deposits with licensed banks 1,868 3,015 - -
Cash and bank balances 6,878 8,251 6 744
Total Current Assets 19,989 23,636 5,011 1,238
Total Assets 100,377 84,013 156,885 5,680
EQUITY AND LIABILITIES
Equity attributable to owners of the parent
Share capital 20,776 3,000 158,444 979
Retained earnings/ (Accumulated losses) 25,302 37,013 (2,458) 1,787
Non-controlling interests 136 - - -
Foreign exchange reserve 163 10 178 -
Total Equity 46,377 40,023 156,164 2,766
Non-Current Liabilities
Bank borrowings 11,655 9,588 - -
Finance lease payables 750 718 - -
Deferred tax liabilities 2,920 2,564 - -
Total Non-Current Liabilities 15,325 12,870 - -
Current Liabilities
Trade payables 11,719 9,996 - -
Other payables 17,266 9,670 721 2,914
Bank borrowings 6,275 6,321 - -
Bank overdrafts 928 2,802 - -
Bills payable 422 499 - -
Finance lease payables 454 411 - -
Provision for taxation 1,611 1,421 - -
Total Current Liabilities 38,675 31,120 721 2,914
Total Liabilities 54,000 43,990 721 2,914
Total Equity and Liabilities 100,377 84,013 156,885 5,680
(Incorporated in the Republic of Singapore) (Company Registration No. 200401894D)
FINANCIAL STATEMENTS AND DIVIDEND ANNOUNCEMENT FOR THE YEAR ENDED 31 DECEMBER 2012
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1(b)(ii) Aggregate amount of group’s borrowings and debt securities.
Amount repayable in one year or less, or on demand
As at 31 December 2012 As at 31 December 2011
Secured Unsecured Secured Unsecured
RM'000 RM'000 RM'000 RM'000
Finance lease payables 454 - 411 -
Interest bearing loans and borrowings
7,625
-
9,622
-
8,079 - 10,033 -
Amount repayable after one year
As at 31 December 2012 As at 31 December 2011
Secured Unsecured Secured Unsecured
RM'000 RM'000 RM'000 RM'000
Finance lease payables 750 - 718 -
Interest bearing loans and borrowings
11,655
-
9,588
-
12,405 - 10,306 -
Details of any collateral
(1) The bank overdrafts are secured by: (i) Fixed and floating charges over all the present and future assets of certain subsidiaries; (ii) Pledge of the fixed deposits with licensed banks; (iii) Joint and several guarantee of a director of the Company; and (iv) Corporate guarantee of Chaswood Resources Sdn Bhd and Posh Corridor Sdn Bhd (“PCSB”),
the immediate parent company of the Group.
(2) The term loans are secured by: (i) Fixed and floating charge over all present and future assets of certain subsidiaries; and (ii) Pledge of the fixed deposits with licensed banks of the Group.
Certain of the term loans are also covered by: (i) Joint and several guarantee of a director of the Company; (ii) Joint and several guarantee of two former directors of Chaswood Resources Sdn Bhd; (iii) Corporate guarantee of Chaswood Resources Holdings Ltd, Chaswood Resources Sdn Bhd and
PCSB; (iv) 80% of a banking facility covered by a guarantee of an agency of the Government of Malaysia;
and (v) A legal charge over the buildings of the Group.
(3) Finance leases obligations are secured by the lessor’s charge over the leased assets and corporate guarantee by Chaswood Resources Sdn Bhd.
(Incorporated in the Republic of Singapore) (Company Registration No. 200401894D)
FINANCIAL STATEMENTS AND DIVIDEND ANNOUNCEMENT FOR THE YEAR ENDED 31 DECEMBER 2012
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1(c) A cash flow statement (for the group), together with a comparative statement for the corresponding period of the immediately preceding financial period.
Consolidated statements of cash flows
2nd Half Year Ended 31
December Year Ended 31 December
2012 2011 2012 2011
RM'000 RM'000 RM'000 RM'000
(Unaudited) (Unaudited) (Unaudited) (Audited)
RM'000 RM'000 RM'000 RM'000
Cash Flows From Operating Activities (Loss)/Profit before taxation (5,037) 6,272 (8,086) 12,024
Adjustments for:
Goodwill written-off - - 7,785 -
Amortisation of franchise fee 222 97 340 170
Franchise fee written off 111 - 111 -
Depreciation of property and equipment 2,644 1,990 4,831 3,735
Equipment written off 2,532 - 4,510 322
Gain on disposal of equipment (40) (93) (40) (149)
Interest income (55) (31) (98) (55)
Interest expense 665 736 1,344 1,223
Operating Profit Before Working Capital Changes 1,042 8,971 10,697 17,270
Inventories (377) (189) (114) (1,200)
Trade receivables (1,482) (1,518) 309 (1,663)
Other receivables, prepayment and deposits 3,805 3,574 932 1,436
Trade payables 2,076 1,467 1,723 725
Other payables and accruals 6,038 3,843 7,596 1,842
Cash restricted in use 1,289 (154) 1,147 (295)
Net Cash Flows From Operations 12,391 15,994 22,290 18,115
Tax paid (1,995) (3,316) (3,286) (3,886)
Interest received 55 31 98 55
Net Cash Flows From Operating Activities 10,451 12,709 19,102 14,284
Cash Flows From Investing Activities
(Decrease)/Increase in bills payable (74) (115) (77) 499
Purchase of property and equipment (15,503) (8,195) (25,871) (12,612)
Net proceeds from disposal of equipment 40 164 40 282
Franchise fee paid (2,371) (561) (2,940) (682)
Other assets, Non-current (805) (700) (454) (1,195)
Net cash acquired upon completion of RTO - - 2,526 -
Net Cash Flows Used in Investing Activities (18,713) (9,407) (26,776) (13,708)
(Incorporated in the Republic of Singapore) (Company Registration No. 200401894D)
FINANCIAL STATEMENTS AND DIVIDEND ANNOUNCEMENT FOR THE YEAR ENDED 31 DECEMBER 2012
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2nd Half Year Ended 31
December Year Ended 31 December
2012 2011 2012 2011
RM'000 RM'000 RM'000 RM'000
(Unaudited) (Unaudited) (Unaudited) (Audited)
RM'000 RM'000 RM'000 RM'000
Cash Flows From Financing Activities
Drawdown of term loans 4,753 1,746 8,174 6,809
Repayment of term loans (3,074) (2,007) (6,153) (3,931)
Repayment of finance lease payables (195) (205) (463) (523)
Proceeds from non-controlling interests 343 - 343 -
Proceeds from issuance of shares - - 7,465 -
Interest paid (665) (736) (1,344) (1,223)
Net Cash Flows From/(Used in) Financing Activities 1,162 (1,202) 8,022 1,132
Net (Decrease)/Increase In Cash And Cash Equivalents (7,100) 2,100 348 1,708
Foreign exchange differences 153 - 153 -
Cash and Cash Equivalents At Beginning Of The Financial Year 12,897 3,349 5,449 3,741
Cash and Cash Equivalents At End Of The Financial Year 5,950 5,449 5,950 5,449
Cash and bank balances 6,878 8,251 6,878 8,251
Bank overdrafts (928) (2,802) (928) (2,802)
Cash and Cash Equivalents At End Of The Financial Year 5,950 5,449 5,950 5,449
(Incorporated in the Republic of Singapore) (Company Registration No. 200401894D)
FINANCIAL STATEMENTS AND DIVIDEND ANNOUNCEMENT FOR THE YEAR ENDED 31 DECEMBER 2012
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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 period.
Consolidated statements of changes in equity
Share Translation Retained Non-
controlling Total
Capital Reserve Earnings Total Interests Equity
RM'000 RM'000 RM'000 RM'000 RM'000 RM'000
Balance as at 1 January 2011 3,000 14 28,575 31,589 - 31,589
Total comprehensive income for the year - (4) 8,438 8,434 - 8,434
Balance as at 31 December 2011 (Audited) 3,000 10 37,013 40,023
-
40,023
Balance as at 1 January 2012 3,000 10 37,013 40,023 -
40,023
Additional shares arising from RTO 10,311 - - 10,311 - 10,311
Issuance of new compliance shares 7,696 - - 7,696 - 7,696
Expenses of issuance of new shares (231) - - (231) - (231) Shares subscribed by non-controlling interests - - - - 343 343
Total comprehensive expense for the year - 153 (11,711) (11,558) (207) (11,765)
Balance as at 31 December 2012 (Unaudited) 20,776
163 25,302 46,241
136
46,377
(Incorporated in the Republic of Singapore) (Company Registration No. 200401894D)
FINANCIAL STATEMENTS AND DIVIDEND ANNOUNCEMENT FOR THE YEAR ENDED 31 DECEMBER 2012
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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 period.
Statement of changes in equity for the Company Share Translation Retained Earnings/ Total
Capital Reserve (Accumulated Loss) Equity
RM'000 RM'000 RM'000 RM'000
Balance as at 1 January 2011 35,299 - (35,193) 106 Issuance of shares 875 - - 875 Capital reduction (35,195) - 35,195 - Total comprehensive income for the year - - 1,785 1,785
Balance as at 31 December 2011 (Audited) 979 - 1,787 2,766
Balance as at 1 January 2012 979 - 1,787 2,766 Additional shares arising from RTO 150,000 - - 150,000 Issuance of new compliance shares 7,696 - - 7,696 Expenses of issuance of new shares (231) - - (231) Total comprehensive expense for the year - 178 (4,245) (4,067)
Balance as at 31 December 2012 (Unaudited) 158,444 178 (2,458) 156,164
(Incorporated in the Republic of Singapore) (Company Registration No. 200401894D)
FINANCIAL STATEMENTS AND DIVIDEND ANNOUNCEMENT FOR THE YEAR ENDED 31 DECEMBER 2012
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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 the end of the current financial period reported on and as at the end of the corresponding period of the immediately preceding financial period.
Number of shares
Share capital as at 1 January 2012 137,000,000
Consideration Shares issued pursuant to the Acquisition 2,026,178,233
Number of shares after the Acquisition 2,163,178,233
Total number of consolidation shares after the Acquisition and the post-acquisition consolidation of every 10 shares into 1 share but before the Compliance Placement
216,317,819
New shares issued pursuant to the Compliance Placement 10,500,000
Share capital as at 30 June 2012
226,817,819
There were no changes in the share capital of the Company from 30 June 2012 to 31 December 2012.
1(d)(iii) To show the total number of issued shares excluding treasury shares as at the end of the
current financial year and as at the end of the immediately preceding year.
The Group As at
31 December 2012
As at 31 December
2011 Number of ordinary shares in issue, after consolidation of every 10 shares into 1 share 226,817,819 13,700,000
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.
The Company has no treasury shares as at 31 December 2012 and 31 December 2011. 2. Whether the figures have been audited or reviewed and in accordance with which auditing
standard or practice.
The figures have not been audited or reviewed by the Company’s auditors.
(Incorporated in the Republic of Singapore) (Company Registration No. 200401894D)
FINANCIAL STATEMENTS AND DIVIDEND ANNOUNCEMENT FOR THE YEAR ENDED 31 DECEMBER 2012
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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.
The accounting policies and methods of computation are consistent with the latest audited financial statements for the year ended 31 December 2011.
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.
The Group has adopted all new and revised Financial Reporting Standards (FRS) and Interpretations of FRS (INT FRS) that are relevant to its operations and effective for annual periods beginning on or after 1 January 2012. The adoption of these new/revised FRS and INT FRS does not result in substantial change to the Group’s and Company’s accounting policies or have any significant impact on the financial statements.
6. Earnings per ordinary share of the group for the current financial period reported on and
the corresponding period of the immediately preceding financial period, after deducting any provision for preference dividends. Basic (Loss)/Earnings Per Share
2nd HALF-YEAR
ENDED YEAR ENDED 31 DECEMBER
2012 2011 2012 2011
Net (loss)/profit attributable to equity holders of the Company (RM'000)
(6,131)
4,383
(11,711)
8,438
Weighted average number of ordinary shares in issue (RM'000)
222,277
202,618
222,277
202,618
(Loss)/Earnings per share (RM sen)
(2.8)
2.2
(5.3)
4.2
(Incorporated in the Republic of Singapore) (Company Registration No. 200401894D)
FINANCIAL STATEMENTS AND DIVIDEND ANNOUNCEMENT FOR THE YEAR ENDED 31 DECEMBER 2012
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7. Net asset 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 period.
The Group The Company As at
31 December 2012
(Unaudited)
As at 31 December
2011 (Audited)
As at 31 December
2012 (Unaudited)
As at 31 December
2011 (Audited)
Net asset value per ordinary share (RM sen) 20.4 19.8 68.9 20.2
Net asset value per ordinary share of the Group was calculated based on 226,817,819 shares (2011: 202,617,819 shares) and of the Company was calculated based on 226,817,819 shares (2011: 13,700,000) in issue at the end of the period.
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.
Review of Financial Performance Revenue THE GROUP YEAR ENDED 31
DECEMBER
2012 2011 Changes
RM'000 RM'000 %
(Unaudited) (Audited)
Malaysia 133,055 110,354 20.6%
Singapore 15,109 12,652 10.4%
Thailand 1,530 - N.M
Indonesia 48 - N.M
149,742 123,006 21.7% N.M - Not meaningful
(Incorporated in the Republic of Singapore) (Company Registration No. 200401894D)
FINANCIAL STATEMENTS AND DIVIDEND ANNOUNCEMENT FOR THE YEAR ENDED 31 DECEMBER 2012
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The Group’s revenue increased by approximately RM26.7 million, or 21.7% from approximately RM123.0 million in 2011 to approximately RM149.7 million in 2012, mainly contributed by the Group’s largest geographical segment, Malaysia. The increase in revenue was mainly attributable to revenue derived from new outlets and overall higher revenue from existing outlets.
Gross profit and gross profit margin Gross profit increased by approximately RM18.5 million, or 22.2% from approximately RM83.7 million in 2011 to approximately RM102.2 million in 2012, which is in line with the increase in revenue. Gross margin improved from approximately 68.0% in 2011 to approximately 68.3% of total revenue in 2012.
Other Credits The increase in other credits was mainly due to compensation from a third party. Marketing and Distribution Costs Marketing and distribution costs increased by approximately RM3.0 million, or 65.1% from approximately RM4.7 million in 2011 to approximately RM7.7 million in 2012. The increase in marketing and distribution costs was mainly due to higher royalties paid to franchisors/licensor as a result of the increase in revenue for franchised/licensed brands. In addition, the introduction of creative/digital marketing and new brands/outlets contributed to the increase in advertising and marketing expenses. Administrative expenses Administrative expenses increased by approximately RM26.6 million, or 42.9% from approximately RM61.9 million in 2011 to approximately RM88.4 million in 2012. The increase was mainly attributable to higher staff costs due to higher headcount, higher rental expenses, utilities costs, operating supplies and repair and maintenance, mainly due to more operating outlets and/or higher revenue. In addition, the higher administrative expenses were attributable to higher compliance related costs subsequent to the RTO exercise which were not applicable to the Company prior to the RTO exercise.
(Incorporated in the Republic of Singapore) (Company Registration No. 200401894D)
FINANCIAL STATEMENTS AND DIVIDEND ANNOUNCEMENT FOR THE YEAR ENDED 31 DECEMBER 2012
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Finance costs Finance costs increased by approximately RM0.1 million or 9.9% from approximately RM1.2 million in 2011 to approximately RM1.3 million in 2012 mainly due to the higher interest expense in relation to the drawdown of new term loans to finance capital expenditure of new outlets. Other charges Other charges increased by approximately RM12.1 million from approximately RM0.3 million in 2011 to approximately RM12.4 million in 2012. The increase in other charges was mainly due to net increase in equipment written off by approximately RM4.2 million due to closure of certain outlets and the write off of goodwill arising from the RTO by approximately RM7.8 million (which represents the excess of the consideration over the fair value of net assets acquired). This goodwill was written off in accordance with Financial Reporting Standards. Other expenses Other expenses increased by approximately RM1.6 million or 41.6% from approximately RM3.9 million in 2011 to approximately RM5.6 million in 2012. The increase in other expenses was mainly due to the higher depreciation of property and equipment and amortisation of franchise fees due to more outlets operating in 2012. Income tax Income tax expense increased by approximately RM0.2 million, or 6.9% from approximately RM3.6 million in 2011 to approximately RM3.8 million in 2012. There was a tax charge for 2012 despite the loss before tax of RM8.1 million which arose due to the write off of goodwill and fees incurred in relation to the RTO which are not tax deductible. The effective tax rates for 2012 (after adjusting for the write off of goodwill and fees incurred in relation to the RTO which are not tax deductible) and 2011 were higher than the statutory tax rate due to loss-making outlets and certain expenses being not tax deductible.
Review of Financial Position Non current assets Property and equipment increased from RM46.7 million as at 31 December 2011 to RM64.0 million as at 31 December 2012 mainly as a result of acquisition of property and equipment for new outlets. Intangible assets increased from RM8.6 million as at 31 December 2011 to RM11.1 million as at 31 December 2012. The increase is due mainly to the franchise fees paid for new outlets which was offset by the amortisation of the franchise fees. Other assets, non-current consists of long term security deposits for restaurant leases. The increase from RM5.1 million as at 31 December 2011 to RM5.5 million as at 31 December 2012 was due to the increase in security deposits for new outlets.
(Incorporated in the Republic of Singapore) (Company Registration No. 200401894D)
FINANCIAL STATEMENTS AND DIVIDEND ANNOUNCEMENT FOR THE YEAR ENDED 31 DECEMBER 2012
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Current assets Trade receivables relates to cash in transit and credit card transactions pending receipt from banks. The decrease from RM2.4 million as at 31 December 2011 to RM2.1 million as at 31 December 2012 was due to timing differences. Other assets relate to (i) deposits placed with the lessors for the leases of the Group’s outlets which are due within one year, (ii) prepayments and booking fees for the identified sites. The decrease from RM7.2 million as at 31 December 2011 to RM6.2 million as at 31 December 2012 were mainly due to decrease in prepayments. Cash and bank balances decreased from RM8.3 million as at 31 December 2011 to RM6.9 million as at 31 December 2012, due to net cash flows used in investing activities of RM26.8 million offset by net cash flows generated from operating activities of RM19.1 million and net cash flows from financing activities of RM8.0 million. This decrease was also caused by a reduction of bank overdrafts from RM2.8 million as at 31 December 2011 to RM0.9 million as at 31 December 2012. Current liabilities Trade payables increased from RM10.0 million as at 31 December 2011 to RM11.7 million as at 31 December 2012. The increase in trade payables was mainly due to increase in purchases in line with increase in revenue. Other payables increased from RM9.7 million as at 31 December 2011 to RM17.3 million as at 31 December 2012 due mainly to initial setup costs owing to contractors for new outlets. Short-term bank borrowings comprise of term loans, finance lease payables, bankers acceptance and bank overdraft facilities granted by financial institutions. The decrease in bank borrowings from RM6.3 million as at 31 December 2011 to RM6.2 million as at 31 December 2012 relates to repayment of term loans due to closure of certain outlets. Working Capital The Group’s net current liabilities increased by approximately RM11.2 million from approximately RM7.5 million as at 31 December 2011 to approximately RM18.7 million as at 31 December 2012 mainly due to decrease in cash and bank balances and increase in current liabilities as a result of our expansion plans. Non-current liabilities Long term bank borrowings consist mainly of term loans and hire purchase payables. The increase is mainly due to the increase in bank borrowings from RM9.6 million as at 31 December 2011 to RM11.7 million as at 31 December 2012 as a result of term loans obtained to finance the purchase of equipment for new outlets.
(Incorporated in the Republic of Singapore) (Company Registration No. 200401894D)
FINANCIAL STATEMENTS AND DIVIDEND ANNOUNCEMENT FOR THE YEAR ENDED 31 DECEMBER 2012
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9. 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 global macro economic environment remains uncertain. However, the outlook in South East Asia, where the Group primarily operates, appears resilient due to growing affluence and favourable demographics in the region. Hence, the Group is cautiously optimistic about its performance in FY2013.
11. Dividend
(a) Current Financial period Reported On
None
(b) Corresponding Period of the Immediately Preceding Financial period
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/recommended for the year ended 31 December 2012.
13. Interested Person Transactions The Group does not have any general mandate from shareholders for Interested Person Transactions.
(Incorporated in the Republic of Singapore) (Company Registration No. 200401894D)
FINANCIAL STATEMENTS AND DIVIDEND ANNOUNCEMENT FOR THE YEAR ENDED 31 DECEMBER 2012
Page 18 of 22
14. Use of Placement proceeds
As at 31 December 2012, the net proceeds from the Company’s issuance of shares pursuant to the compliance placement in relation to the RTO exercise (“Compliance Placement”) has been utilised as follows: The above utilisation of the proceeds from the Compliance Placement is consistent with the intended uses as disclosed in the Company’s offer information statement dated 12 March 2012 in relation to the Compliance Placement. The Company will continue to make periodic announcements on the utilisation of the balance of the proceeds raised from the Compliance Placement as and when such proceeds are materially utilised. The use of placement proceeds have been translated using the closing exchange rate of S$1 to RM2.4430 as at 21 March 2012.
15. Segmental revenue and results for business or geographical segments (of the group) in the form presented in the issuer’s most recently audited financial statements, with comparative information for the immediately preceding year.
Business segment As the group operates principally in a single segment business which is the casual dining business serving food and beverages, no business segment reporting is presented. Geographical segment The geographical segment is presented as follows:
Amount Allocated
Amount Utilised*
Balance Use of IPO Proceeds RM'000 RM'000 RM'000
Capital expenditure for new restaurants in existing markets and new regional markets 5,022 5,022 0
Refurbishment of existing restaurants 2,443 279 2,164
Expenses relating to the placement 231 231 0
TOTAL 7,696 5,531 2,164
(Incorporated in the Republic of Singapore) (Company Registration No. 200401894D)
FINANCIAL STATEMENTS AND DIVIDEND ANNOUNCEMENT FOR THE YEAR ENDED 31 DECEMBER 2012
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Malaysia Singapore Others Adjustment Total
RM'000 RM'000 RM'000 RM'000 RM'000 Year ended 31 December 2012 (Unaudited)
Revenues from external customers 133,055 15,109 1,578 149,742
Recurring earnings/(loss) before interest,taxes, depreciation and amortisation ("EBITDA") 10,885 (3,712) (1,199) 5,974
Finance costs (1,288) (56) - (1,344)
Depreciation (4,416) (321) (94) (4,831)
Amortisation (243) (97) - (340) Operating revenue before interest and tax ("ORBIT") 4,938 (4,186)
(1,293) (541)
Other unallocated items - - - (7,545) (7,545) Profit/(Loss) before tax 4,938 (4,186) (1,293) (8,086)
Income tax expense (3,814) (18) - (3,832) Profit/(Loss) after tax 1,124 (4,204) (1,293) (11,918)
Year ended 31 December 2012 (Unaudited)
Assets and Liabilities
Segment assets
Cash and cash equivalents 6,494 1,044 1,208 8,746
Trade receivables 1,486 103 529 2,118
Inventories 2,721 105 60 2,886
Other assets 9,188 1,291 1,296 11,775
Intangible assets 9,127 1,079 847 11,053
Property and equipment 55,810 3,438 4,551 63,799 Total assets 84,826 7,060 8,491 100,377
Segmental liabilities
Deferred and current tax liabilities 4,531 - - 4,531
Borrowings 20,484 - - 20,484
Trade and other payables 23,923 2,103 2,959 28,985 Total liabilities 48,938 2,103 2,959 54,000
Other Segment Information
Expenditure for non-current assets:
Property and equipment 21,096 946 4,368 26,410
Intangible assets 1,142 951 847 2,940 22,238 1,897 5,215 29,350
Other non-cash expenses other than depreciation/amortisation
- Equipment written-off 2,950 1,560 - 4,510
- Franchisee fee written-off - 111 - 111
- Goodwill written-off - 7,785 - 7,785 2,950 9,456 - 12,406
(Incorporated in the Republic of Singapore) (Company Registration No. 200401894D)
FINANCIAL STATEMENTS AND DIVIDEND ANNOUNCEMENT FOR THE YEAR ENDED 31 DECEMBER 2012
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Malaysia Singapore Adjustment Total
RM'000 RM'000 RM'000 RM'000
Year ended 31 December 2011 (Audited)
Revenues from external customers 110,354 12,652 123,006
Recurring EBITDA 16,900 252 17,152
Finance costs (1,073) (150) (1,223)
Depreciation (3,483) (252) (3,735)
Amortisation (160) (10) (170) ORBIT 12,184 (160) 12,024
Other unallocated items - - - Profit before tax 12,184 (160) 12,024
Income tax expense (3,586) - (3,586) Profit after tax 8,598 (160) 8,438
Year ended 31 December 2011 (Audited)
Assets and Liabilities
Segment assets
Cash and cash equivalents 8,139 3,127 11,266
Trade receivables 1,925 502 2,427
Inventories 2,615 157 2,772
Other assets 9,213 3,040 12,253
Intangible assets 8,273 291 8,564
Property and equipment 42,224 4,507 46,731 Total assets 72,389 11,624 84,013
Segmental liabilities
Deferred and current tax liabilities 3,985 - 3,985
Borrowings 18,078 2,261 20,339
Trade and other payables 15,796 3,870 19,666 Total liabilities 37,859 6,131 43,990
Other Segment Information
Expenditure for non-current assets:
Property and equipment 10,485 2,727 13,212
Intangible assets 508 174 682 10,993 2,901 13,894
Other non-cash expenses other than depreciation/amortisation - Equipment written-off 322 - 322
(Incorporated in the Republic of Singapore) (Company Registration No. 200401894D)
FINANCIAL STATEMENTS AND DIVIDEND ANNOUNCEMENT FOR THE YEAR ENDED 31 DECEMBER 2012
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16. In the review of performance, the factors leading to any material changes in contributions to turnover and earnings by the business or geographical segments. Please refer to paragraph 8
17. Breakdown of sales
THE GROUP YEAR ENDED 31 DECEMBER
2012 2011 Changes
RM'000 RM'000 %
(Unaudited) (Audited)
(a) Sales reported for first half year 72,678 59,322 23%
(b) (Loss)/Profit attributable to shareholders
reported for first half year (5,580) 4,055 N.M
(c) Sales reported for second half year 77,064 63,684 21%
(d) (Loss)/Profit attributable to shareholders
reported for second half year (6,131) 4,383 N.M
N.M - Not meaningful 18. A breakdown of the total annual dividend (in dollar value) for the issuer’s latest full year and
its previous full year.
None
(Incorporated in the Republic of Singapore) (Company Registration No. 200401894D)
FINANCIAL STATEMENTS AND DIVIDEND ANNOUNCEMENT FOR THE YEAR ENDED 31 DECEMBER 2012
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19. Disclosure of person occupying an 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(10) in the format below. If there are no such persons, the issuer must make an appropriate negative statement.
Name
Age
Family relationship with any director and/or substantial shareholder
Current position and duties, and the year the position was held
Details of changes in duties and position held, if any, during the year
Nicol Roach Reddy
31
Son of Andrew Roach Reddy, the Managing Director of the Company
Director of Operation - Italiannies Group and Baci Italian Café
Resigned on 29 September 2012
Andrea Roach Reddy
29
Daughter of Andrew Roach Reddy, the Managing Director of the Company
Group Human Resources Manager
Not Applicable
Louisa Benny George Benny
33
Niece of Andrew Roach Reddy, the Managing Director of the Company
Head Designer
Not Applicable
On behalf of the Board of Directors Dato’ Mohammed Azlan Bin Hashim Andrew Roach Reddy Non Executive Chairman Executive Director By order of the Board Dato’ Mohammed Azlan Bin Hashim Non Executive Chairman 28 February 2013 This Announcement and its contents have been reviewed by the Company’s Sponsor, CIMB Bank Berhad, Singapore Branch (the "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 examined or approved by the SGX-ST and the SGX-ST and Sponsor assume no responsibility for the contents of this announcement, including the correctness of any of the statements or opinions made or reports contained in this announcement.
The contact person for the Sponsor is Mr Eric Wong (Director, Corporate Finance), CIMB Bank Berhad, Singapore Branch, 50 Raffles Place, #09-01 Singapore Land Tower, Singapore 048623, telephone (65) 63375115.