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Income Statement
Balance Sheet
Review Of Performance
Financial Results
Revenue for the Group for the financial year registered an improvement of S$8.6 million (7.1%) from S$121.3 million to S$129.8 million.
The main reason for the significant increase is due to acquisition of JAZ Technology, which was acquired in June last year also contributed 8% of the total Group revenue. Xinbao continued to be the main revenue generator of the Group, contributing 77.6% of Group revenue.
Compared to financial year 2006, gross profit margin remained consistent.
Other operating income decreased significantly by S$8.0 million to S$4.0 million during the current year as compared to S$12.0 million for last year. The main reason for the decrease is last year's gain on the disposal of Shenzhen NARI Technologies Co., Ltd. ("Nari") of S$9.5 million recognised.
Administrative expenses increased by S$4.4 million or 55.3% to S$12.2 million during the financial year as compared to S$7.9 million for prior year. This was mainly mainly attributable to the acquisition of JAZ Technology and bad debts amounting to S$1.8 million written off during the year.
Finance costs registered a 17.0% increased compared to FY2006. The increase is due to higher interest rate charged for bank borrowings.
As a result of the above fluctuations, net profit attributable to shareholders of the Company decreased by 38.3% to S$12.3 million for the financial year as compared to S$19.9 million for prior year.
Balance Sheet
The increase in associates was mainly due to share of results of associates for the year, net of dividends declared.
The decrease in available-for-sale investments was mainly due to 4% equity interest in Sichuan Jiajiang Qianfo Yan Hydroelectricity Co., Ltd.being reclassified to held-for-sale investment.
Trade receivables decreased mainly due to bad debts amounting to S$1.8 million written off during the current year. Other receivable decreased by S$4.5 million from prior year S$11.9 million, mainly due to settlement of accounts due by third party.
Other payables decreased from S$44.6 million as at 31 December 2006 to S$29.8 million as at 31 December 2007. The decrease is mainly due to payment of the purchase consideration for the acquisition of Great Energy Development Limited.
Bank borrowing decreased throughout the year due to net repayments during the year.
Cash Flows
The group generated a net cash inflow of S$40.7 million from its operating activities, due mainly to the following:
net cash inflow from operating profit before working capital changes of S$32.0 million; decrease of S$4.0 million in trade and other receivables; decrease of S$14.9 million in other payables; and interest received of S$1.6 million; and S$1.7 million income taxes paid.The net cash outflow of S$5.5 million from investing activities was mainly due to the following:
dividends received from associates amounting to S$2.6 million; and purchase of property, plant and equipment amounting to S$8.7 million.
The net cash outflow of S$31.8 million from financing activities arose mainly from the following:
payment of interest expenses of S$5.0 million; payment of dividends to shareholders of the Company amounting to S$4.0 million; payment of dividends to minority shareholders of S$3.8 million; payment made to related parties amounting to S$18.5 million; net proceeds from issuance of shares amounting to S$1.6 million; and net repayment of bank loans amounting to S$2.8 million.Commentary On Current Year Prospects
With the impending commencement of the Beijing Olympics Games in August 2008, demand for electrical energy is expected to hit the roof. Growing affluence of the PRC economy continues to fuel demand for energy within the country. The Group's strategic focus on renewable energy has allowed it to ride on the local energy wave with strong positive growth.
The Company is currently exploring expansion opportunities through acquisitions of existing projects as well as stepping up efforts in the development of hydropower electricity generation plant under Asia Power (Leibo) Hydroelectricity Co., Ltd. ("Leibo").
Barring any unforeseen circumstances, we expect the Group to remain profitable for the next financial year.
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