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Chairman's Message  

Dear Shareholders,

We started 2015 on a positive outlook and ended the year with markedly different landscape. The world is now fi nally coming to grips that China growth rate and economic mix may structurally be different in the next quarter century versus the last quarter century. The prevailing view is that the RMB is going to depreciate rather than appreciate. The Ringgit is lower now than it was post the Asian Financial Crisis in 1997/8. And crude oil price is less than half what it was just a year or so ago. While we continue to believe that we are at a strategic infl ection point albeit a delay and detour, we embarked on a decidedly prudent position by impairing and provisioning S$32.6 million of exceptional items.



The Group reported a 13.8% or S$18.6 million decline in revenue from S$135.2 million (FY2014) to S$116.5 million (FY2015).

Backend Equipment Solutions & Technologies(“BEST”) business recorded a 14.8% or S$19.7 million decrease in revenue from S$133.0 million (FY2014) to S$113.3 million (FY2015). The decline in revenue was due to lower demand for the equipment business. The revenue from Distribution & Service business increased S$1.0 million from S$2.2 million (FY2014) to S$3.2 million (FY2015) due to increase in sales from the distribution business.

Gross Profi t Margin
Gross profi t margin in FY2015 was 33.0%, which was 1.4% lower compared to the 34.4% reported in FY2014.

Operating Expenses
Marketing & distribution, research & development and general administrative expenses of S$52.5 million incurred in FY2015 were S$6.9 million higher compared to the expenses reported in FY2014. The expenditure rose mainly due to the increase in payroll related costs and higher research and development activities carried out for the development of the advanced semiconductor packages and batteries.

Financing costs increased S$43,000 in FY2015 compared to FY2014.

The foreign exchange gain of S$1.1 million in FY2015 was comparable to the gain reported in FY2014.

Depreciation of property, plant and equipment in FY2015 increased due to additional purchase of property, plant and equipment during the years 2014 and 2015.

Exceptional items amounted to SS$32.6 million due to impairment losses on property, plant and equipment and goodwill as a result of the weaker business environment.

Net Loss/Profi t
The Group reported a net loss attributable to shareholders of S$20.5 million in FY2015 compared to the net profi t of S$2.9 million in FY2014, mainly due to the exceptional losses of S$32.6 million and lower revenue recorded in the year.


As at 31 December 2015, total assets stood at S$124.6 million comprising S$23.4 million from non-current assets and S$101.2 million from current assets. Total liabilities stood at S$54.3 million comprising current liabilities of S$51.6 million and non-current liabilities of S$2.7 million. Shareholders’ equity including non-controlling interests stood at S$70.3 million.

The following are highlights of the Group’s balance sheet as at 31 December 2015.

Intangible assets
The decrease in intangible assets was mainly due to the impairment losses on goodwill after reviews of impairment assessment. Other reasons for the decrease included the amortisation of customer relationships and intellectual properties, and asset values fl uctuation due to currency volatility.

Property, plant and equipment
The impairment losses and the depreciation during the year resulted in the decrease in the property, plant and equipment (“PPE”). However, the decline in PPE was partially offset by the additional purchases in the year.

Investment securities
Investment securities increased mainly due to the 4% acquisition of the issued share capital of Nanofuel Co., Ltd. (“Nanofuel”). Nanofuel is engaged in the research and development of nano-emulsifi cation technology for biomass energy.

Prepayment (Non-current)
The prepayment relates to the cost incurred for the development project along the Yangtze Riverbank.

Investment in associate
Investment in associate relates to the 49% acquisition of the issued share capital of APA Capital & Advisory Co., Ltd on 29 April 2015.

Inventories decreased S$0.8 million from S$27.1 million to S$26.2 million, mainly due to lesser inventory purchases in view of lower customers’ demands.

Other receivables and prepayments
The receivables decreased mainly due to an impairment loss on a loan to external party and the final receipt from the disposal of the discontinued operations. The decline was partly offset by the partial consideration made for the 19% acquisition of the issued share capital of Heat Tech Japan Co., Ltd. As at 31 December 2015, this acquisition is pending completion.

Trade receivables
Trade receivables’ balance decreased S$7.0 million due to the lower sales in year 2015.

Loans and borrowings
Loans and borrowings decreased S$13.3 million from S$28.8 million to S$15.5 million, due to repayments made during the year.

Payables and accruals
Payables and accruals remained comparable in 2015 and 2014.


The Group utilised S$0.5 million for its operations. An amount of S$2.0 million was used for the payment of interest and tax. S$11.4 million was received, being proceeds from the disposal of investment and the final receipts from the disposal of discontinued operations. A net amount of S$8.0 million was used for the purchase of property, plant and equipment. An amount of S$2.5 million was received from a share placement exercise by a subsidiary. The Group repaid net loans and borrowings of S$13.9 million to the fi nancial institutions. The Group also utilised S$0.7 million and S$1.6 million for expenditure on development projects and the purchase of equity stakes in certain investments respectively.


Although the tremendous economic earthquake has altered the strategic economic landscape, we continue to be optimistic on our strategic outlook while being cognizant of the headwinds - a slowing global economy, a decelerated and structurally changing China economic growth and mix, and a Watch List ticking time clock. Looking forward into 2016, we foresee good growth in ASTI generic manufacturing and equipment businesses coming from new products and services and new customer acquisitions. Our ASA ECMS businesses are looking at possible recovery growth, and we will continue to pursue opportunities that align with the strategic roadmap. Our DGI battery business will begin the commercialization and revenue may materialize if all goes well. We had cost down where necessary and will continue to cost down, restructure and / or dispose where appropriate and prudent. By and large, even in the face of the headwinds, while we still have serious issues and plenty of work to do, some fundamentals are in place for us to achieve that strategic inflection turning point.

It is important to note that our business is prone to economic uncertainties and the cyclical nature of the electronics and semiconductor industries. Unforeseeable factors include but are not limited to foreign exchange volatility, intellectual property litigations, product and technology obsolescence, and inventory adjustments. In view of these factors, we will remain prudent and cautious in the management of our businesses.


In closing, I would like to thank all our customers, shareholders, business associates, and bankers for your trust and confidence in us, and I look forward to your support in the new financial year. To all our employees, I appreciate your perseverance and dedication, and I have confidence in your commitment to make our Group financially, commercially and technologically strong to ride the opportunities in front of us.


Yours sincerely,


Executive Chairman and Chief Executive Officer


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Blk 25 Kallang Avenue #06-01 Kallang Basin Industrial Estate Singapore 339416T (65) 6392 6922F (65) 6329 5522Company Registration No.: 199901514C
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