News

Full Year Financial Statement And Dividend Announcement

The Board of Directors of Qian Hu Corporation Limited is pleased to announce the results of the Group and of the Company for the year ended 31 December 2001.
These figures have not been audited.

		Group			Company
-	-	S$'000		%	S$'000		%
-	-.	31/12/01	31/12/00	Change	31/12/01	31/12/00	Change
1.(a)	Turnover	41,249	33,903	21.7	33,165	27,435	20.9
1.(b)	Investment income	0	0	0	0	0	0
1.(c)	Other income including interest income	9	9	0	4	8	(50.0)
2.(a)	Operating profit before income tax, minority interests, extraordinary items, interest on borrowings, depreciation and amortisation, foreign exchange gain/(loss) and exceptional items	5,459	5,150	6.0	4,597	4,040	13.8
2.(b)(i)	Interest on borrowings	(82)	(167)	(50.9)	(65)	(149)	(56.4)
2.(b)(ii)	Depreciation and amortisation	(1,319)	(948)	39.1	(809)	(725)	11.6
2.(b)(iii)	Foreign exchange gain/(loss)	188	94	100.0	77	76	1.3
2.(c)	Exceptional items	0	0	0	0	0	0
2.(d)	Operating profit before income tax, minority interests and extraordinary items but after interest on borrowings, depreciation and amortisation, foreign exchange gain/(loss) and exceptional items	4,246	4,129	2.8	3,800	3,242	17.2
.	.	31/12/01	31/12/00	Change	31/12/01	31/12/00	Change
2.(e)	Income derived from associated companies	(7)	8	(187.5)	0	0	0
2.(f)	Less income tax	(863)	(995)	(13.3)	(650)	(834)	(22.1)
2.(g)(i)	Operating profit after tax before deducting minority interests	3,376	3,142	7.5	3,150	2,408	30.8
2.(g)(ii)	Less minority interests	48	18	166.7	0	0	0
2.(h)	Operating profit after tax attributable to members of the company	3,424	3,160	8.4	3,150	2,408	30.8
2.(i)(i)	Extraordinary items	0	0	0	0	0	0
2.(i)(ii)	Less minority interests	0	0	0	0	0	0
2.(i)(iii)	Extraordinary items attributable to members of the company	0	0	0	0	0	0
2.(i)(iv)	Transfer to/from Exchange Reserve	0	0	0	0	0	0
2.(i)(v)	Transfer to Capital Reserve	0	0	0	0	0	0
2.(i)(vi)	Transfer to Reserve Fund	0	0	0	0	0	0
2.(j)	Operating profit after tax and extraordinary items attributable to members of the company	3,424	3,160	8.4	3,150	2,408	30.8

Group Figures
		Latest year	Previous year
3.(a)	Operating profit [2(g)(i) above] as a percentage of turnover [1(a) above]	8.18%	9.27%
3.(b)	Operating profit [2(h) above] as a percentage of issued capital and reserves at end of year	19.94%	23.30%
3.(c)	Earnings per ordinary share for the year based on 2(h) above after deducting any provision for preference dividends:-
3.(c)(i)	Based on existing issued share capital	4.14 cents	5.04 cents
3.(c)(ii)	On a fully diluted basis	4.11 cents	5.03 cents
3.(d)	Earnings per share based on 2(j) above:-
	(i) Based on existing issued share capital	4.14 cents	5.04 cents
	(ii) On a fully diluted basis	4.11 cents	5.03 cents
3.(e)	Net tangible asset backing per ordinary share	20.43 cents	15.60 cents

Note to 3(c)(i), 3(d)(i) and 3(e)

Earnings per ordinary share on existing issued share capital is computed based on the weighted average number of shares in issue during the year of 82,760,060 (FY 2000 : 62,723,450).

Note to 3(c)(ii) and 3(d)(ii)

Earnings per ordinary share on a fully diluted basis is computed based on the weighted average number of shares in issue during the year adjusted to assume conversion of all potential dilutive ordinary shares of 83,343,475 (FY 2000 : 62,876,356).

-	-	Group			Company
-	-	S$'000		%	S$'000		%
-	-	31/12/01	31/12/00	Change	31/12/01	31/12/00	Change
-
4.(a)	Sales reported for first half year	19,866	17,024	16.7	16,167	13,693	18.1
4.(b)	Operating profit [2(g)(i) above] reported for first half year	1,527	1,763	(13.4)	1,506	1,466	2.7
4.(c)	Sales reported for second half year	21,383	16,879	26.7	16,998	13,742	23.7
4.(d)	Operating profit [2(g)(i) above] reported for second half year	1,849	1,379	34.1	1,644	942	74.5

5.(a) Amount of any adjustment for under or overprovision of tax in respect of prior years

The Group and the Company have an overprovision of tax in respect of prior years amounted to approximately $207,000 and $191,000 respectively.

5.(b) Amount of any pre-acquisition profits

NIL

5.(c) Amount of profits on any sale of investments and/or properties

NIL

5.(d) Any other comments relating to Paragraph 5

NIL

6. Segmental Results

(i) BUSINESS SEGMENTS (The Group)

31/12/2001	Fish $'000	Accessories $'000	Others $'000	Eliminations $'000	Total $'000
TURNOVER
External sales	18,314	16,646	6,289	-	41,249
Inter-segment sales	511	3,721	179	(4,411)	-
Total sales	18,825	20,367	6,468	(4,411)	41,249
RESULTS
Segment results	2,086	2,617	411	21	5,135
Unallocated expenses					(816)
					4,319
Financial expenses - net					(73)
Share of profit of associated company					(7)
Taxation					(863)
Minority interests					48
Net profit for the year					3,424
ASSETS & LIABILITIES
Assets	11,144	10,582	5,457	-	27,183
Investment in associated company					315
Unallocated assets					82
Total assets					27,580
Liabilities	3,158	2,919	1,695	-	7,772
Unallocated liabilities					2,575
Total liabilities					10,347
OTHER INFORMATION
Capital expenditure	389	637	922	-	1,948
Depreciation and amortisation	493	421	405	-	1,319
Other non-cash expenses (income)	73	(455)	(68)	-	(450)

31/12/2000	Fish $'000	Accessories $'000	Others $'000	Eliminations $'000	Total $'000
TURNOVER
External sales	16,468	11,988	5,447	-	33,903
Inter-segment sales	559	3,141	138	(3,838)	-
Total sales	17,027	15,129	5,585	(3,838)	33,903
RESULTS
Segment results	2,092	2,056	441	71	4,660
Unallocated expenses					(373)
					4,287
Financial expenses - net					(158)
Share of profit of associated company					8
Taxation					(995)
Minority interest					18
Net profit for the year					3,160
ASSETS & LIABILITIES
Assets	9,892	6,649	4,396	-	20,937
Investment in associated company					118
Unallocated assets					1,860
Total assets					22,915
Liabilities	3,134	2,132	1,698	-	6,964
Unallocated liabilities					2,322
Total liabilities					9,286
OTHER INFORMATION
Capital expenditure	1,839	343	499	-	2,681
Depreciation and amortisation	460	344	144	-	948
Other non-cash expenses (income)	99	(421)	-	-	(322)

ii) GEOGRAPHICAL SEGMENTS (The Group)

	Turnover	Turnover	Assets	Assets	Capital expenditure	Capital expenditure
	31/12/01 $'000	31/12/00 $'000	31/12/01 $'000	31/12/00 $'000	31/12/01 $'000	31/12/00 $'000
Singapore	24,666	20,781	20,622	19,468	1,417	2,173
Overseas	16,583	13,122	6,958	3,447	531	508
Total	41,249	33,903	27,580	22,915	1,948	2,681

7.(a) Review of the performance of the company and its principal subsidiaries


Turnover

4th Quarter 2001 vs 4th Quarter 2000	4 Qtr 2001 $'000	4 Qtr 2000 $'000	Increased $'000	%
Fish	4,746	3,922	824	21.0
Accessories	5,031	3,193	1,838	57.6
Plastic & others	1,817	1,587	230	14.5
	11,594	8,702	2,892

FY 2001 vs FY 2000	FY 2001 $'000	FY 2000 $'000	Increased $'000	%
Fish	18,314	16,468	1,846	11.2
Accessories	16,646	11,988	4,658	38.9
Plastic & others	6,289	5,447	842	15.5
	41,249	33,903	7,346

For the year ended 31 December 2001, our ornamental fish activities and distribution of accessories continued to be our core activities which together accounted for 84.8% of our total turnover. Geographically, our Singapore market continued to be our main market accounting for 59.8% of our total turnover for the year ended 31 December 2001.

Our turnover increased by $7.3 million or 21.7% from $33.9 million for the year ended 31 December 2000 to $41.2 million for the year ended 31 December 2001. All activities registered growth in turnover. Turnover for ornamental fish, accessories, and plastics and other business increased by $1.8 million or 11.2%, $4.7 million or 38.9% and $0.8 million or 15.5%, respectively in FY 2001 as compared to FY 2000. Comparing to the 4th quarter of FY 2000, turnover for ornamental fish, accessories, and plastics and other business increased by $0.8 million or 21.0%, $1.8 million or 57.6% and $0.2 million or 14.5%, respectively in FY 2001.

The increase in the turnover of ornamental fish is mainly due to increase in sales of Dragon Fish and our increased focus on sales of ornamental fish to local retailers. In addition, our in-house retail outlet set up in August 2000 has increased our sales of ornamental fish.

Almost 50% of the increase in turnover of accessories was contributed by our Malaysian & Thailand subsidiaries. In addition, the continuous expansion of our overseas customer base, especially in the fourth quarter of FY 2001, has resulted in the increase in sales of our accessories products.

Following the shift into our new factory location in May 2001, with the increase in production capacity and capabilities, our turnover for plastic and others increased as we managed to penetrate deeper into the local market by expanding our distribution channel supplying directly to end-users as well as selling higher end plastics bags. In addition, one of our subsidiaries in PRC, which commenced its operations in September 2000, has contributed to the turnover of plastic bags in FY 2001.

On a geographical basis, turnover from Singapore grew 19% mainly as a result of improved sales to local fish retailers and sales generated from the opening of our in-house retail outlets. Turnover from overseas grew by 26% for year ended 31 December 2001 compared to FY 2000. Our constant effort in expanding into overseas' untapped markets contributed to the increased in overseas turnover.


Operating profit before taxation

4th Quarter 2001 vs 4th Quarter 2000	4 Qtr 2001 $'000	4 Qtr 2000 $'000	Increased/ (Decreased) $'000	%
Fish	618	750	(132)	(17.6)
Accessories	1,003	435	568	130.6
Plastic & others	161	30	131	436.7
Unallocated corporate expenses	(243)	(71)	(172)	242.3
	1,539	1,144	395

FY 2001 vs FY 2000	FY 2001 $'000	FY 2000 $'000	Increased/ (Decreased) $'000	%
Fish	2,086	2,092	(6)	0.3
Accessories	2,596	2,056	540	26.3
Plastic & others	425	449	(24)	(5.4)
Unallocated corporate expenses	(868)	(460)	(408)	88.7
	4,239	4,137	102

Our operating profit increased by $0.1 million or 2.8% to $4.2 million for the year ended 31 December 2001 as compared to $4.1 million for the year ended 31 December 2000. Profit after taxation increased by 8.4% from $3.2 million for the year ended 31 December 2000 to approximately $3.4 million for the year ended 31 December 2001.

Our operating profit from ornamental fish registered flat growth in FY 2001 notwithstanding the increase in turnover. This is attributable to the decrease in gross profit margin from certain fish species during the last quarter of FY 2001. We have managed to contain the reduction in profit by increasing our focus on sales of ornamental fish to local retailers and from our in-house retail outlet which commands higher margin.

Up to the 3rd quarter of FY 2001, the results from accessories was slightly lower than its corresponding period in FY 2000, mainly due to higher purchasing costs in the first half of FY 2001 and operating losses incurred by our Thailand subsidiary (dealing with accessories) which could only resumed operations in May 2001 due to regulatory compliances as previously announced. With a 57.6% increase in sales volume, we managed to grow our operating profit from the accessories business by $0.57 million or 130.6% in the last quarter of FY 2001 as compared to the corresponding period in FY 2000. In addition, our gross profit margin has increased in that quarter. Accordingly, the operating profit from our accessories business increased by $0.54 million or 26.3% on a year on year basis.

Despite the increase in turnover, our plastics and other business recorded a slight dip in profitability. This was as a result of the increasing operating costs experienced in the second half of FY 2001, coupled with losses made by one of our subsidiaries in PRC, which commenced its operations in September 2000.

Unallocated corporate expenses relate to staff costs and administrative expenses incurred in relation to the overseeing of the Group's operations both locally and overseas. The increase was in line with our annual increment and additional headcount in FY 2001.




7.(b) A statement by the Directors of the Company on whether "any item or event of a
material or unusual nature which would have affected materially the results of
operations of the Group and Company has occurred between the date to which the
report refers and the date on which the report is issued". If none, to include a
negative statement.


In the opinion of the Directors, no item, transaction or event of a material or unusual nature has arisen since the end of the year under review to the date of this report which would materially affect the results of the Group and of the Company for the financial year ended 31 December 2001.


8. Commentary on current year prospects


While the Group will continue to grow organically at our home base in Singapore, we expect the bulk of our growth to be from our overseas operations, such as our newly formed subsidiary in Thailand, Thai Qian Hu, and our new fish division in Malaysia, Guan Guan.

Our subsidiary in Malaysia, Guan Guan, which has increased its turnover and PBT by 76% and 200% respectively in FY 2001, is expected to sustain its growth rate in the current year, especially with the contributions from the newly set up fish division from the second quarter of FY 2002.

Our subsidiary in Thailand, Qian Hu Marketing, suffered losses in first half of FY 2001 mainly due to restructuring costs incurred, managed to be operationally profitable at the end of FY 2001. With the newly formed Thai Qian Hu, we believe the turnover from our Thailand entities should increase and remain profitable in FY 2002.

We also intend to increase our investment in our Guangzhou-based associate company, Wan Jiang, a joint venture with a Taiwanese company specializing in the manufacture of accessories, by raising the stake from 50% to 60%. Wan Jiang will then become a subsidiary of the Group, which will enable us to recognise its turnover and increase our profit share in the Group's consolidated financial performance. As Wan Jiang's operations and its production capacity has stabilized since its incorporation in March 2001, we expect its turnover to increase in the current year.

In addition, with effect from 1 January 2002, the Taiwanese government has finally allowed the import of licensed Dragon Fish. Since January 2002, we have started export Dragon Fish to Taiwan to take advantage of the change in regulation.

We do not expect to carry further restructuring and start-up costs of our overseas subsidiaries in FY 2002. Overall, we expect positive contributions from our Group's overseas operations in Malaysia, Thailand and China. Accordingly, we envisage our Group's turnover and profit will continue to increase in FY 2002.


Risk factors

Normal business risk

Like in all other businesses, setting up new entities suffers losses initially due to depreciation, low turnover, and competition. However, we do not foresee any new business entity being set up in FY 2002 and we are going to concentrate in expanding our overseas market shares and distribution network in our overseas subsidiaries.

Although collectibilty and high inventory is part of the normal business risk, our Group has adopted prudent policies to make 10% general provision for all trade debts overdue for more than 120 days and a full provision for all non-moving stocks for duration of more than 6 months.

Suppliers and customers risk

None of our suppliers or customers contributes more than 5% of our total turnover.

We are heavily reliant on Asian Market for the Dragon Fish

We export our Dragon Fish mainly to Japan and Hong Kong. The export sales for Dragon Fish contributed around 2% of our total Group's turnover and 4% of our Group's PBT in FY 2001. However, with more markets, such as Taiwan, opening up in FY 2002, we expect to diversify our risk in the reliant of certain Asian markets.

Fluctuation in Foreign exchange currencies against the S$

In FY 2001, approximately 90% of our sales are dominated in S$. Around 50% of our purchases are dominated in S$, the rest are in Euro, US$, and Yen. Although we do not entered into any hedging contracts, we do have an unstructured internal policy to hedge the fluctuation in certain currency when the management deems necessary.




9. Dividend

(a) Present Period
Name of Dividend	First & Final
Dividend Type	Cash
Dividend Rate	6 % per ordinary share less tax
Par value of shares	$0.10
Tax Rate	24.5%
(b) Previous Corresponding Period
Name of Dividend	First & Final
Dividend Type	Cash
Dividend Rate	5 % per ordinary share less tax
Par value of shares	$0.10
Tax Rate	24.5%
(c) Total Annual Dividend
-
-	Latest Year (S$'000)	Previous Year (S$'000)
Ordinary	375	312
Preference	0	0
Total:	375	312

9(d) Date payable

Subject to shareholders' approval in the Annual General Meeting to be held on 18 April 2002, the dividends will be paid on 10 May 2002.


9(e) Books closing date

Registrable Transfers received by the Company's Registrar, M&C Services Private Limited at 138 Robinson Road #17-00 The Corporate Office, Singapore 068906, up to 5 pm on 29 April 2002 will be registered before entitlements to the proposed dividend are determined. The Register of Transfer and the Register of Members of the Company will be closed on 30 April 2002 for the payment of dividend.


9(f) Any other comments relating to Paragraph 9

NIL

10. Balance sheet

	Group	Group	Company	Company
	31/12/2001 $	31/12/2000 $	31/12/2001 $	31/12/2000 $
Share capital and reserves
Share capital	8,276,200	8,275,000	8,276,200	8,275,000
Reserves	8,895,840	5,290,090	7,465,052	4,313,095
	17,172,040	13,565,090	15,741,252	12,588,095
Minority interest	60,777	63,864	-	-
	17,232,817	13,628,954	15,741,252	12,588,095
Fixed assets	7,735,215	6,808,914	5,265,934	5,226,598
Subsidiaries	-	-	2,450,844	2,297,752
Associate	314,949	118,178	327,931	121,771
Quoted equity investments, at cost	4,018	-	-	-
Trademarks/customer acquisition cost, product listing fees	97,672	251,916	91,233	251,916
Land use rights	227,308	268,757	-	-
Advance for investment	28,722	206,160	28,722	206,160
Current assets
Stocks	6,645,089	4,801,257	3,931,623	2,719,719
Trade debtors	8,805,512	6,211,661	6,116,038	4,611,192
Other debtors, deposits and prepayments	837,348	1,017,084	174,261	518,750
Due from
- subsidiaries (trade)	-	-	2,491,724	1,617,157
- subsidiaries (non-trade)	-	-	850,108	105,000
- associates (trade)	415,919	-	415,919	-
- associates (non-trade)	557,137	-	557,137	-
Fixed deposits	97,839	477,956	21,393	372,099
Cash and bank balances	1,812,892	2,753,016	1,000,028	1,680,852
	19,171,736	15,260,974	15,558,231	11,624,769
Current liabilities
Trade creditors	3,552,549	3,304,106	2,513,111	2,422,355
Bills payable to bank, secured	1,152,999	903,687	1,152,999	903,687
Other creditors and accruals	2,491,715	1,933,112	1,723,514	1,361,735
Due to
- subsidiaries (trade)	-	-	14,622	12,151
- subsidiaries (non-trade)	-	-	-	109,046
- directors (non-trade)	2,309	492,594	-	-
Hire purchase creditors, current portion	224,576	191,525	84,799	77,599
Term loan, current portion	200,000	200,000	200,000	200,000
Provision for taxation	989,258	1,032,575	762,233	888,000
Proposed dividends (net)	-	312,381	-	312,381
Bank overdrafts, secured	575,605	-	575,605	-
	9,189,011	8,369,980	7,026,883	6,286,954
Net current assets	9,982,725	6,890,994	8,531,348	5,337,815
Non-current liabilities
Hire purchase creditors, non-current portion	(478,134)	(239,796)	(327,147)	(186,900)
Term loan, non-current portion	(403,613)	(595,017)	(403,613)	(595,017)
Deferred taxation	(276,045)	(81,152)	(224,000)	(72,000)
	17,232,817	13,628,954	15,741,252	12,588,095

Statement of Changes in Equity (The Group)

	Share Capital $	Share premium $	Revenue reserve $	Translation reserve $	Total $
Balance 1 Jan 2000	3,650,023	-	1,175,902	(16,542)	4,809,383
Currency translation differences	-	-	-	42,088	42,088
Net profit for the year	-	-	3,159,850	-	3,159,850
Issue of new ordinary shares	3,784,263	2,851,852	-	-	6,636,115
Share issue expenses	-	(769,965)	-	-	(769,965)
Capitalisation of accumulated profits for bonus share issue	840,714	-	(840,714)	-	-
Proposed final dividends	-	-	(312,381)	-	(312,381)
Balance at 31 Dec 2000	8,275,000	2,081,887	3,182,657	25,546	13,565,090
Currency translation differences	-	-	-	96,283	96,283
Net profit for the period	-	-	1,592,317	-	1,592,317
Additional final dividend paid in respect of the previous year due to the issue of shares under the Qian Hu Pre-IPO Share Option Scheme before book closure date	-	-	(45)	-	(45)
Issue of new shares	1,200	1,680	-	-	2,880
Balance at 30 June 2001	8,276,200	2,083,567	4,774,929	121,829	15,256,525
Currency translation differences	-	-	-	(41,603)	(41,603)
Net profit for the period	-	-	497,302	-	497,302
Balance at 30 Sept 2001	8,276,200	2,083,567	5,272,231	80,226	15,712,224
Currency translation differences	-	-	-	124,944	124,944
Net profit for the period	-	-	1,334,872	-	1,334,872
Balance at 31 Dec 2001	8,276,200	2,083,567	6,607,103	205,170	17,172,040

Significant Accounting Polices

There are no changes in the accounting policies adopted for both FY 2001 and FY 2000.

Basis of financial statements preparation

The financial statements are prepared in accordance with Statements of Accounting Standard in Singapore and under the historical cost convention.

Fixed assets

Fixed assets are stated at cost less accumulated depreciation. Depreciation is calculated on a straight-line basis so as to write-off the cost of the fixed assets over their estimated useful lives as follows:

Years

Leasehold buildings term of lease
Furniture, fittings and office equipment
& motor vehicles 5 - 10
Computers 3
Machinery 5 - 8
Air conditioner 5
Ponds and concrete tanks 3 - 10
Electrical and installation 10
Brooder stocks 50

Brooder stocks, which are the parent stocks of Dragon fish, are held for the use in the breeding of Dragon Fish. They were capitalised as fixed assets based on the market price of similar grades of Dragon Fish. We have claimed wear and tear allowances for tax purposes on these "live" fixed assets over a period of three years.


Trademarks/customer acquisition cost, product listing fees

Trademarks/customer acquisition cost relate to cost paid to third parties in relation to the acquisition of trademarks rights and existing customer base of two brands of pet food, namely "ARISTO-CATS YI HU" and "Nature's Gift".

Product listing fees relate to cost paid to third parties in relation to the entitlements to list and sell the Company's products in certain supermarkets.

These costs are stated at cost less amounts amortised over a straight-line basis of 3 years.

Land use rights

This relates to land use rights acquired by one of the subsidiaries, Fujian Anxi QianLong Plastics Private Co., Ltd in China, for the rights to use the acquired land. It is stated at cost less accumulated amortisation.

Land use rights are amortised over the period in which the right to use the land is granted.

Stocks

Stocks are stated at the lower of cost, determined on a weighted average basis, and net realisable value. Provision for stock obsolescence is made for deteriorated, damaged, obsolete and slow-moving stocks (defined as all non-moving stocks for a duration of more than 6 months).

Trade debtors

Sales of goods is recognised upon delivery of goods and acceptance by customers.

Trade debtors are reviewed and monitored on a monthly basis. Specific provision for doubtful debts is made as and when debts are identified to be doubtful in collection or are deemed not collectible. In addition, a 10% general provision is made for all trade debts which are more than 120 days overdue.

11. Details of any changes in the company's issued share capital

During the 4th quarter of FY 2001, no share option was exercised pursuant to the terms of the Qian Hu Pre-IPO Share Option Scheme. There was no share options granted during the period to subscribe for unissued ordinary shares.

As at 31 December 2001, there were 2,674,000 (31/12/2000 :3,332,000) unexercised share options issued pursuant to the terms of the Qian Hu Pre-IPO Share Option Scheme at the exercise price of $0.24 per share.




12. Comparative figures of the group's borrowings and debt securities

(a) Amount repayable in one year or less, or on demand
As at 31/12/2001		As at 30/09/2001
Secured	Unsecured	Secured	Unsecured
424,576	0	369,249	0

(b) Amount repayable after one year
As at 31/12/2001		As at 30/09/2001
Secured	Unsecured	Secured	Unsecured
881,747	0	851,623	0

(c) Any other comments relating to Paragraph 12

NIL

13. Consolidated Cash Flow Statement

	FY 2001 $	FY 2000 $
Cash flows from operating activities
Profit before taxation and minority interest	4,238,933	4,137,069
Adjustments for:
Depreciation of fixed assets	989,446	791,279
Gain on disposal of fixed assets	(30,975)	(5,748)
Gain on disposal of land use rights	(48,703)	-
Amortisation of land use rights	8,994	4,555
Amortisation of pre-operating expenses	143,532	9,236
Amortisation of trademarks/customer acquisition costs, product listing fees	177,323	143,041
Provision for doubtful debts (trade)	69,000	99,241
Write back of provision for stock obsolescence	(450,000)	(415,000)
Bad debts written off (trade)	11,077	-
Share of loss (profit) of associated company	7,175	(8,230)
Interest expense	81,885	167,473
Interest income	(9,491)	(9,109)
Net effect of exchange differences	34,999	(2,470)
Operating profit before working capital changes	5,223,195	4,911,337
(Increase) decrease in:
Stocks	(1,393,832)	(1,367,286)
Trade debtors	(2,673,928)	(1,789,045)
Other debtors, deposits and prepayments	45,858	(311,518)
Due from
- holding company (non-trade)	-	1,300
- shareholders (non-trade)	-	109,369
- associates (trade)	(415,919)	-
- associates (non-trade)	(557,137)	-
Increase (decrease) in:
Trade creditors	248,443	661,593
Bills payable to bank, secured	249,312	586,012
Other creditors and accruals	558,606	232,159
Due to
- related parties (non-trade)	-	(84,921)
- directors (non-trade)	(490,285)	(381,655)
Cash generated from operations	794,313	2,567,345
Income tax paid	(711,002)	(368,347)
Interest paid	(81,885)	(167,473)
Interest received	9,491	9,109
Net cash generated from operating activities	10,917	2,040,634
Cash flows from investing activities
Purchase of fixed assets	(1,329,745)	(1,053,358)
Purchase of land use rights	(31,937)	-
Purchase of quoted equity investment	(4,018)	-
Proceeds from disposal of fixed assets	166,456	173,289
Proceeds from disposal of land use rights	130,733	-
Advance for investment	(28,722)	(206,160)
Payment for trademarks/customer acquisition cost, product listing fees	(23,079)	(158,290)
Payment for pre-operating costs	-	(64,961)
Net cash used in investing activities	(1,120,312)	(1,309,480)
Cash flows from financing activities
Proceeds from issue of shares to minority shareholders of a subsidiary	60,777	86,550
Repayment of hire purchase creditors	(346,278)	(261,687)
Repayment of term loan	(191,404)	(180,745)
Net cash inflow from acquisition of partnerships/sole proprietorships	-	16,906
Proceeds from issue of new shares (net)	2,880	3,055,034
Payments of dividends	(312,426)	-
Net cash generated from (used in) financing activities	(786,451)	2,716,058
Net increase (decrease) in cash and cash equivalents	(1,895,846)	3,447,212
Cash and cash equivalents at beginning of year	3,230,972	(216,240)
Cash and cash equivalents at end of year	1,335,126	3,230,972
Cash and cash equivalents comprises :
Fixed deposits	97,839	477,956
Cash and bank balances	1,812,892	2,753,016
Bank overdrafts	(575,605)	-
	1,335,126	3,230,972

14. Contingent Liabilities


As at 31 December 2001, the Group and the Company have no contingent liabilities.


15. Proposed Bonus Issue

The Company is proposing a bonus issue (the "Bonus Issue") of 8,276,200 new ordinary shares of S$0.10 each in the capital of the Company (the "Bonus Shares") on the basis of one (1) Bonus Share for every ten (10) existing ordinary shares of par value S$0.10 each held by the shareholders of the Company (the "Shareholders") on a date to be determined by the Directors (the "Books Closure Date"). The Company will capitalise approximately the sum of S$827,620 from its share premium account to be applied towards paying up in full for the Bonus Issue. The actual number of Bonus Shares that will be issued by the Company will depend on the total issued share capital of the Company as at the Books Closure Date.

The Bonus Issue will serve to improve the liquidity and marketability of the ordinary shares of the Company (the "Shares") by increasing the number of Shares in issue that are available for trading in the market, augment the issued share capital base of the Company to reflect the growth and expansion of the Group's (the Company and its subsidiaries) business and at the same time, to enable the Company to express its appreciation and to reward loyal Shareholders for their continuing support for the Company.

The Bonus Shares, when issued will rank pari passu in all respects with the existing Shares in the capital of the Company except that they will not be entitled to any dividend declared in respect of the financial year ended 31 December 2001.

The Bonus Issue and the listing and quotation of the Bonus Shares are subject to the approval of the Singapore Exchange Securities Trading Limited ("SGX-ST") for the listing and quotation of the Bonus Shares on the Stock Exchange of Singapore Dealing and Automated Quotation System ("SGX-SESDAQ"). The Company will make an application to the SGX-ST for permission to deal in and for listing and quotation of the Bonus Shares on the SGX-SESDAQ.

BY ORDER OF THE BOARD

Kenny Yap Kim Lee
Executive Chairman and Managing Director
28/01/2002