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
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.
The Group reported a net loss attributable to shareholders of S$20.5 million in FY2015
compared to the net profit of S$2.9 million in
FY2014, mainly due to the exceptional losses of
S$32.6 million and lower revenue recorded in the
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.
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 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.
The prepayment relates to the cost incurred for the development project along the Yangtze
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’ 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.
CASH FLOWS STATEMENT
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
financial 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.
DATO’ MICHAEL LOH
Executive Chairman and Chief Executive Officer