ASA has strengthened both the Equipment Contract
Manufacturing Services (“ECMS”) and Equipment businesses. The ECMS business has improved in
machining capabilities and capacity through the
acquisition of Emerald Precision Engineering Sdn.
Bhd. on 15 November 2013, and ASA has also added
plating and surface fi nishing capabilities through the
acquisition of ASA Multiplate (M) Sdn. Bhd (“ASA
Multiplate”). On 27 March 2014, ASA acquired an
additional 35% equity interests in ASA Multiplate
through the issuance of 189,408,333 new ASA ordinary shares amounting to S$2.3 million. With this
acquisition, ASA’s ownership of ASA Multiplate
increased to 90%. On 18 December 2014, there was a placement of 688,888,886 new ASA ordinary shares
amounting to S$3.1 million, thus improving ASA’s
balance sheet. Following the above transactions, our
equity interest in ASA was diluted from 54.96% to
36.66%. Despite the dilution, ASA remains to be a
subsidiary of the Company as we continue to have de
facto control over ASA. During the year, the ASA Group
has expanded its Equipment business with the
introduction of new products which will enable us to
broaden our Equipment customer base in the
We continued on our journey to explore and bring
other viable businesses into Dragon Group International
Limited (“DGI”). At the close of FY2014, our remnant
trading business with revenue of US$1.7 million is
holding steady but now becoming less signifi cance in
view of recent developments. On 5 January 2015, we
entered into a conditional sales and purchase
agreement with Green Power Ventures Limited to
acquire a 30% equity interest in Heat Tech Japan Co.,
Ltd (“HTJ”), a company dealing in the development of
heat dissipating technologies. This proposed
acquisition also granted us the option to acquire an
additional 36.6% interest in HTJ and a 20% interest in
another company, 3DOM Inc., which is in the business
of developing, manufacturing and distribution of
separators for batteries. On 26 January 2015, we
entered into a placement agreement with Asia Green
Technology Inc. to place an aggregate of 27,777,778
new ordinary shares in the share capital of DGI to them
at S$0.09 per new share. The aggregate consideration
for this transaction is S$2.5 million. The placement
shares were issued on 30 March 2015. On 20 March
2015, we entered into a co-operation agreement with
a Chinese state owned company, Nanjing Treasure
Dockyard Relics Management Co., Ltd whereby we
shall be permitted to do a property development
project along the Yangtze Riverbank. Upon completion
of the development, we shall be given the right to use
and operate the project for a period of 20 years, with
an option to renew for a further 20 years thereafter. This positive development for DGI will allow a new
strategic direction in the tourism and development
markets. Work at the Dragon Treasure Boat shipyard is
progressing. The diffi culties previously associated with
the reconstruction of the Zhenghe Treasure Boat had
been resolved and completion is now targeted forsecond half of year 2017. On 3 March 2015, DGI announced following the Notice of 3 Consecutive
Years’ Losses released on 27 February 2015, SGX-ST
has placed DGI on the watch-list with effect from 4
March 2015. DGI will have to meet requirements of
Rule 1314 of the SGX-ST Listing Manual within 24
months from 4 March 2015, failing which the SGX-ST
would delist the Company or suspend trading with a
view to delisting the Company.
On 13 September 2012, the Group announced that it
has entered into a conditional Sale and Purchase
Agreement with Infl exionPoint Technologies Pte.
Limited for the disposal of all issued and paid up
ordinary shares in the share capital of Dragon
Technology Distribution Pte. Ltd. (“Disposal Group”).
The disposal of discontinued operations was
completed on 3 May 2013.
In accordance with FRS 105, the results of the Disposal
Group has been presented separately on the Group
Income Statement as Discontinued Operations for the
financial years ended 31 December 2013.
The continuing operations reported a 39.6% or S$38.4
million increase in revenue from S$96.8 million (FY2013)
to S$135.2 million (FY2014). BEST business recorded
a 38.8% or S$37.2 million increase in revenue fromS$95.8 million (FY2013) to S$133.0 million (FY2014).
The increase in revenue was due to higher demand
from the equipment business. The revenue from
Distribution & Service business increased S$1.2 million
from S$1.0 million (FY2013) to S$2.2 million (FY2014).
Gross Profi t Margin
Gross profi t margin (“GPM”) in FY2014 was 34.4%,
which was 2.5% higher than the 31.9% reported in FY2013. This was due to a higher proportion of the
Group’s revenue being contributed from the equipment business which had a relatively higher margin
compared to the revenue from other businesses.
Other income increased in FY2014 due to the increase
in rental income during the year.
Marketing & distribution, research & development and
general administrative expenses incurred in FY2014
were comparable to the expenses reported in FY2013
In line with the higher borrowings from the financial institutions, fi nancing costs increased S$0.2 million
from S$0.8 million (FY2013) to S$1.0 million (FY2014).
Appreciation of US dollar in 2014 resulted in a gain of
S$1.1 million in FY2014, compared to the gain of
S$0.3 million reported in FY2013.
The exceptional items in FY2014 comprise the
(a) A net gain of S$68,000 from the disposal of an
investment security (the gain of S$400,000 arising
from the disposal of an investment security more than
offset the impairment loss of S$332,000 relating to this
same investment security)
(b) The realisation of foreign exchange translation loss
arising from the deregistration of overseas subsidiaries.
Depreciation of property, plant and equipment in
FY2014 increased due additional purchase of property
plant and equipment during the year.
Net Profi t/Loss
The continuing operations reported an operating profit
of S$2.6 million and a net profi t attributable to shareholders of S$2.9 million in FY2014, compared to
the operating loss of S$13.3 million and a net loss of
S$14.8 million in FY2013
With the completion of the disposal on 3 May 2013,
the Group has recognised the results generated from
discontinued operations for the period from January to
As at 31 December 2014, total assets stood at
S$185.1 million comprising S$52.9 million from noncurrent
assets and S$132.2 million from current assets.
Total liabilities stood at S$67.9 million comprising
current liabilities of $64.4 million and non-current
liabilities of S$3.5 million. Shareholders’ equity including
non-controlling interests stood at S$117.2 million.
The following are highlights of the Group’s balance
sheet as at 31 December 2014.
The decrease in intangible assets was mainly due to
amortisation of customer relationships and intellectual
properties, as well as impairment loss on country club
Property, plant and equipment
The decrease in property, plant and equipment was
mainly due to depreciation and also the reclassifi cation of
a land and building to “non-current assets held for sale”
as the Group is in the process of disposing these assets.
The Group reclassifi ed an unquoted investment
security to “non-current assets held for sale” as the
Group is in the process of disposing this asset.
Other receivables (non-current)
Other receivables (non-current) balance in 31
December 2013 represented 10% of the proceeds
from the disposal of the discontinued operations to be
collected after 12 months from the balance sheet date.
Other receivables and prepayments
The other receivables and prepayments comprised
receivables from external parties which increased in
Trade receivables’ balance increased S$7.5 million
mainly due to the higher sales reported in second half
of the year.
Non-current assets held for sale
The Group had an unquoted investment security that
was classifi ed under non-current assets held for sale.
This asset is currently in the process of being disposed.
At balance sheet date, this investment security was
stated at its fair value. Non-current assets held for sale
also included the leasehold land and building which a
subsidiary of the Group is in the process disposing.
Loans and borrowings
Loans and borrowings increased S$12.6 million from
S$16.2 million to S$28.8 million due to additional trade
financing obtained to fund the increased business
Payables and accruals
Payables and accruals increased S$7.2 million from
S$27.3 million to S$34.5 million mainly due to the
increased trade payables of the BEST business arising
from the increased business activities.
The Group generated S$2.4 million from its operations.
An amount of S$1.6 million was used for the payment
of interest and tax. S$2.3 million being proceeds from
the sales of discontinued operations was received.
Another proceed of S$3.1 million was received from
the share placement exercise of a subsidiary. A net
amount of S$4.4 million was used for the purchase of
property, plant and equipment. The Group drew down
net borrowings of S$11.7 million from financial
institutions to support the increased business activities.
With ASA’s extended capabilities and the expanded
regional coverage, ASA is increasingly able to offer a
more comprehensive value proposition to a broader
customer base across a wider region. ASA has
expanded its Equipment business through the
introduction of new products. These new products will
enable the ASA to serve more customers in the semiconductor industry. The expansion of the ECMS
business and Equipment businesses will help ASA firm
its foothold in the region in 2015 and beyond.
DGI’s announcements of the various opportunities are
both strategic and lucrative, and may allow DGI to
propel into a whole new enterprise for our shareholders.
While we pursue our commercial interests, we must at
the same time address the regulatory watch-list issue.
The unfolding drama and the ultimate outcome remain
The stronger transformed business entities in the
enlarged Group are strategically poised to pursue their
destinies unencumbered. With ASTI’s equipment
business focused on mobility, manufacturing services
business continuing to improve, and our technology
subsidiary EoPlex progressing towards
commercialization, 2015 may prove to be a strategic
infl ection point for the enlarged Group.
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
In closing, I would like to thank all our customers,
shareholders, business associates, and bankers for your
trust and confi dence in us, and I look forward to your
support in the new fi nancial year. To all our employees, I
appreciate your perseverance and dedication, and I have
confi dence 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