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Full Year Financial Statement And Dividend Announcement

PART I - INFORMATION REQUIRED FOR ANNOUNCEMENTS OF QUARTERLY (Q1, Q2 & Q3), HALF-YEAR AND FULL YEAR RESULTS

1(a) An income statement (for the group) together with a comparative statement for the corresponding period of the immediately preceding financial year



 

	Group S$'000s	Group S$'000s	% Increase/ (Decrease)	Company S$'000s	Company S$'000s	% Increase/ (Decrease)
	31/12/2002	31/12/2001		31/12/2002	31/12/2001
Revenues	112,090	84,223	33.09	15,695	6,849	129.16
Costs and expenses
Changes in inventories in finished goods	(6,029)	(6,865)	(12.18)	0	0	-
Raw materials and consumables used	57,775	46,250	24.92	0	0	-
Depreciation and amortisation expenses	1,007	786	28.12	0	0	-
Impairment loss (Note 1)	137	1,204	(88.62)	630	444	41.89
Foreign exchange loss/(gain)	1,739	(1,290)	(234.81)	54	(42)	(228.57)
Other operating expenses (include staff costs)	37,852	28,036	35.01	447	2,379	(81.21)
Other (revenue)/expenses	(596)	(151)	294.70	25	(24)	(204.17)
Total costs and expenses	91,885	67,970	35.18	1,156	2,757	(58.07)
Profit from operating activities	20,205	16,253	24.32	14,539	4,092	255.30
Finance costs	(53)	(22)	140.91	0	0	-
Share of loss of unconsolidated associates	(231)	(154)	50.00	0	0	-
Profit from ordinary activities before taxation	19,921	16,077	23.91	14,539	4,092	255.30
Taxation	(3,583)	(3,666)	(2.26)	(3,377)	(1,494)	126.04
Minority interests	(1,544)	(1,435)	7.60	0	0	-
Net profit for the year	14,794	10,976	34.78	11,162	2,598	329.64

Note 1: Impairment losses for the Group arose from the downward valuation of properties, and for the Company, it related to the provision for diminution in value of investments in the subsidiary and associated companies.



1(b)(i) A balance sheet (for the issuer and group), together with a comparative statement as at the end of the immediately preceding financial year



 

	Group		Company
	2002 (S$'000)	2001 (S$'000)	2002 (S$'000)	2001 (S$'000)
Assets Less Liabilities
Non Current Assets
Fixed assets	11,994	9,253	-	-
Investments in subsidiary companies	-	-	12,676	12,936
Investment in associated company	448	679	428	834
Deferred tax assets	218	-	-	-
Intangible assets	59	79	-	-
	12,719	10,011	13,104	13,770
Current assets
Cash and bank balances	8,122	8,536	47	582
Fixed deposits	-	293	-	-
Other financial asset	-	500	-	500
Trade receivables	15,880	8,981	-	-
Other receivables	3,840	3,412	108	111
Amount due from subsidiary companies	-	-	21,306	10,470
Amount due from associated company	991	852	991	852
Inventories	29,221	21,146	-	-
	58,054	43,720	22,452	12,515
Current liabilities
Trade payables	(10,619)	(5,183)	-	-
Bills Payable	(167)	(219)	-	-
Other payables	(4,210)	(3,776)	( 211)	(154)
Term loan, secured	-	(40)	-	-
Finance lease liabilities	(7)	-	-	-
Provision for taxation	(2,599)	(3,582)	(2)	(2)
	(17,602)	(12,800)	(213)	(156)
Net current assets	40,452	30,920	22,239	12,359
Non-Current Liabilities
Term loan, secured	-	(437)	-	-
Finance lease liabilities	(28)	-	-	-
Deferred liabilities	(306)	(366)	-	-
	(334)	(803)	-	-
Net assets	52,837	40,128	35,343	26,129
Equity
Share capital	17,200	17,200	17,200	17,200
Reserves	33,142	20,720	18,143	8,929
	50,342	37,920	35,343	26,129
Minority interests	2,495	2,208	-	-
	52,837	40,128	35,343	26,129



 

1(b)(ii) Aggregate amount of group's borrowings and debt securities


Amount repayable in one year or less, or on demand



As at 31/12/2002

As at 31/12/2001

Secured	Unsecured	Secured	Unsecured
0	S$174,333.00	S$39,752.00	S$219,203.00



Amount repayable after one year



As at 31/12/2002

As at 31/12/2001

Secured	Unsecured	Secured	Unsecured
0	S$27,541.00	S$436,833.00	0



Details of any collateral

NIL



1(c) A cash flow statement (for the group), together with a comparative statement for the corresponding period of the immediately preceding financial year



 

	31/12/2002	31/12/2001
	S$'000	S$'000
Cash flows from operating activities:
Profit from ordinary activities before taxation and minority interests	19,921	16,077
Adjustments For:
Amortisation of goodwill	20	20
Depreciation of fixed assets	1,004	766
Exchange realignment	(295)	211
Loss on disposal of fixed assets	24	107
Interest income	(32)	(84)
Interest expense	53	22
Impairment loss on fixed assets	137	1,204
Preliminary expense written off	-	20
Share of results of associated company	231	154
Gain on liquidation/disposal of subsidiary companies	(445)	-
Capital reserve written off	(16)	-
Operating income before reinvestment in working capital	20,602	18,497
Increase in receivables	(7,327)	(2,409)
Increase in inventories	(8,075)	(8,692)
Increase in payables	6,946	263
Cash generated from operations	12,146	7,659
Income taxes paid	(4,844)	(3,485)
Net cash generated from operating activities	7,302	4,174
Cash flows from investing activities
Purchase of other financial asset	-	(500)
Interest received	32	84
Purchase of shares in an associated company	-	(834)
Acquisition of additional interest in a subsidiary company	-	(469)
Dividends paid to minority shareholders of subsidiary companies	(1,257)	(292)
Proceeds from disposal of fixed assets	18	168
Purchase of fixed assets	(4,037)	(3,232)
Proceeds from issuance of shares to minority shareholder of a subsidiary company	-	130
Net cash inflow from disposal of a subsidiary company	6	130
Proceeds on maturity of other financial asset	500	-
Net cash used in investing activities	(4,738)	(4,815)
Cash flows from financing acitivites
Interest paid	(53)	(22)
Dividends paid to shareholders of the Company	(1,948)	(1,298)
Repayment of interest-bearing borrowings	(1,131)	61
Proceeds from term loan	-	477
Loan to associated company	(139)	(852)
Net cash used in financing acitivities	(3,271)	(1,634)
Net decrease in cash and cash equivalents	(707)	(2,275)
Cash and cash equivalents at beginning of the year	8,829	11,104
Cash and cash equivalents at end of the year	8,122	8,829



 

1(d)(i) A statement (for the issuer and group) showing either (i) all changes in equity or (ii) changes in equity other than those arising from capitalisation issues and distributions to shareholders, together with a comparative statement for the corresponding period of the immediately preceding financial year



 

	Share Capital	Share Premium	Capital Reserve	Foreign CurrencyTranslation Reserve	RevenueReserve	Total
	$'000s	$'000s	$'000s	$'000s	$'000s	$'000s
The Group
Balance as at 1/1/2001	17,200	6,086	16	68	3,287	26,657
Movements during the year	-	-	-	287	-	287
Effect of change in accounting policy on proposed dividend	-	-	-	-	1,299	1,299
Balance at beginning of the year as restated	17,200	6,086	16	355	4,586	28,243
Net profit for the year	-	-	-	-	10,976	10,976
Dividend on ordinary shares	-	-	-	-	(1,299)	(1,299)
Balance as at 31/12/2001	17,200	6,086	16	355	14,263	37,920
Movements during the year	-	-	(16)	(408)	-	(424)
Net profit for the year	-	-	-	-	14,794	14,794
Dividend on ordinary shares	-	-	-	-	(1,948)	(1,948)
Balance as at 31/12/2002	17,200	6,086	0	(53)	27,109	50,342
The Company
Balance as at 1/1/2001	17,200	6,086	0	0	245	23,531
Effect of change in accounting policy on proposed dividend	-	-	-	-	1,299	1,299
Balance at beginning of the year as restated	17,200	6,086	0	-	1,544	24,830
Net profit for the year	-	-	-	-	2,598	2,598
Dividend on ordinary shares	-	-	-	-	(1,299)	(1,299)
Balance as at 31/12/2001	17,200	6,086	0	0	2,843	26,129
Net profit for the year	-	-	-	-	11,162	11,162
Dividend on ordinary shares	-	-	-	-	(1,948)	(1,948)
Balance as at 31/12/2002	17,200	6,086	0	0	12,057	35,343



 

1(d)(ii) Details of any changes in the company's share capital arising from rights issue, bonus issue, share buy-backs, exercise of share options or warrants, conversion of other issues of equity securities, issue of shares or cash or as consideration for acquisition or for any other purpose since the end of the previous period reported on. State also the number of shares that may be issued on conversion of all the outstanding convertibles as at the end of the current financial period reported on and as at the end of the corresponding period of the immediately preceding financial year


There was no change in the company's share capital during the financial year.

As at 31 December 2002, there were unexercised options for 17,720,000 of unissued ordinary shares of the Company under the Food Empire Share Option Scheme (31 December 2001: Nil).



2. Whether the figures have been audited, or reviewed and in accordance with which standard (e.g. the Singapore Standard on Auditing 910 (Engagements to Review Financial Statements), or an equivalent standard)


The figures are unaudited and were not reviewed by the auditors.



3. Where the figures have been audited or reviewed, the auditors' report (including any qualifications or emphasis of matter)


Not applicable.



4. Whether the same accounting policies and methods of computation as in the issuer's most recently audited annual financial statements have been applied


Except as disclosed in paragraph 5 below, the Group has applied the same accounting policies and methods of computation in the financial statements for the current financial year compared with the audited financial statements as at 31st December 2001.



5. If there are any changes in the accounting policies and methods of computation, including any required by an accounting standard, what has changed, as well as the reasons for, and the effect of, the change


In compliance with the new Singapore Statements of Accounting Standard ("SAS"), the Group has adopted the standard SAS 12 (Revised) Income Taxes.

There is no impact on the adoption of the standard to the financial statements.



6. Earnings per ordinary share of the group for the current period reported on and the corresponding period of the immediately preceding financial year, after deducting any provision for preference dividends



 

	Group Figures	Group Figures
	31/12/2002	31/12/2001
Earnings per share
(i) Based on existing issued share capital (cents)	4.30	3.19
(ii) On a fully diluted basis (cents)	4.22	3.19



 

7. Net asset value (for the issuer and group) per ordinary share based on issued share capital of the issuer at the end of the (a) current period reported on and (b) immediately preceding financial year



 

	Group	Group	Company	Company
	31/12/2002	31/12/2001	31/12/2002	31/12/2001
Net asset backing per ordinary share (cents)	14.63	11.02	10.27	7.60



 

8. A review of the performance of the group, to the extent necessary for a reasonable understanding of the group's business. The review must discuss any significant factors that affected the turnover, costs, and earnings of the group for the current financial period reported on, including (where applicable) seasonal or cyclical factors. It must also discuss any material factors that affected the cash flow, working capital, assets or liabilities of the group during the current financial period reported on


The Group enjoyed another year of good growth in FY2002 with revenue increased by 33.1% to S$112.1 million compared to the previous year. This was achieved through stronger sales across all major markets, namely Russia, Eastern Europe and Central Asia.

 

The Group performed well in FY2002 in spite of the world economic slowdown and a very competitive market environment. In FY2002, the Group improved its sales to key markets mainly due to the better market penetration on the back of the strong brand names that the Group has built up over the years. The strong brand management provided the Group with good consumer loyalty that enabled the Group to maintain its margins and market share under such a competitive environment. In FY2002, the Group continued with its intensive advertising and promotional activities. This, coupled with the launch of a wide array of new products and a multiple brand distribution strategy, contributed to the overall good performance.

Beverage products remain our major selling items, contributing about 89.5% of the Group's total revenue. Other products, comprising frozen food, candy and snacks recorded combined revenue of about S$11.8 million in FY2002.

Our key market in Russia consists of 54.5% of the Group's total revenue, whilst Eastern Europe and Central Asia made up 32.9%. Other markets include Vietnam, the PRC, Western Europe, Middle East and USA which collectively contributed S$14.1 million or 12.6% of the Group's revenue.

The Group's Profit Before Tax increased by 23.9% to S$19.9 million as compared to the previous year. In FY2002, the Group managed to contain the cost of raw materials at about the same level and achieved notable improvement in operational efficiencies. However, the Group has incurred higher overseas office expenses in the expansion of our distribution network in the key markets. Advertisement and promotional expenses have also gone up along with our brand management program of maintaining strong brand names and introduction of new products. In addition, the Group incurred an exchange loss of S$1.7 million as compared to a gain of S$1.3 million in the previous year. This lead to the lower percentage increase in the Group's Profit Before Tax as compared to the percentage increase in revenue.

The foreign exchange loss was due to the weakening of the US dollar against the Singapore dollar. Given the substantial natural hedge, the Group does not see a need to adopt other hedging instruments.

Net Profit After Tax and Minority Interests increased by 34.8% to S$14.8 million. The increase is due to tax reliefs and reduction in tax rate.



9. Where a forecast, or a prospect statement, has been previously disclosed to shareholders, any variance between it and the actual results


The results of the Group for the year under review are consistent with the prospect statement contained in the announcement on the Half Year Financial Statements released on 20 August 2002.



10. A commentary at the date of the announcement of the competitive conditions of the industry in which the group operates and any known factors or events that may affect the group in the next reporting period and the next 12 months


The markets which the Group operates in will continue to be competitive in the coming year. The Group will continue to invest in brand building through advertisement and promotion, product quality and packaging designs to gain consumer loyalty and build on its competitive strength.

As the bulk of the Group's turnover comes from overseas, its profitability will continue to be affected by foreign currency fluctuations. Other than the above mentioned, the Group is not aware of any material factors or events that may affect the Group in the next reporting period and the next 12 months.

Barring unforeseen circumstances and the uncertainties in the global economy, the Directors expect the Group to maintain a steady performance in FY2003.



11. Dividend


(a) Current Financial Period Reported On

Any dividend declared for the current financial period reported on? Yes



Name of Dividend	First & Final	Special Dividend
Dividend Type	Cash	Cash
Dividend Rate	0.5 cents per ordinary share (less tax)	0.75 cents per ordinary share (less tax)
Par value of shares	$0.05	$0.05
Tax Rate	22%	22%



(b) Corresponding Period of the Immediately Preceding Financial Year

Any dividend declared for the corresponding period of the immediately preceding financial year? Yes



Name of Dividend	First & Final	Special Dividend
Dividend Type	Cash	Cash
Dividend Rate	0.5 cents per ordinary share (less tax)	0.25 cents per ordinary share (less tax)
Par value of shares	$0.05	$0.05
Tax Rate	24.5%	24.5%



(c) Date payable

The proposed First & Final and Special Dividends, if approved at the Annual General Meeting, will be paid at a date to be announced.


(d) Books closure date

Notice will be given at a later date on the closure of Share Transfer Books and the Register of Members to determine the shareholders' entitlements to the proposed First & Final and Special Dividends.



12. If no dividend has been declared/recommended, a statement to that effect


Not applicable

PART II - ADDITIONAL INFORMATION REQUIRED FOR FULL YEAR ANNOUNCEMENT
(This part is not applicable to Q1, Q2, Q3 or Half Year Results)

 

13. Segmented revenue and results for business or geographical segments (of the group) in the form presented in the issuer's most recently audited annual financial statements, with comparative information for the immediately preceding year



 

By Product
2002	Beverages	Others	Elimination	Total
	(S$'000)	(S$'000)	(S$'000)	(S$'000)
Segment revenue from external customers	100,312	11,778	-	112,090
Inter segment revenue	98,651	52,345	(150,996)	-
Total revenue	198,963	64,123	(150,996)	112,090
Segment results	19,632	19,009	(18,436)	20,205
Finance Costs				(53)
Share of loss of associated company				(231)
Profit from operating activities before taxation and minority interests				19,921
Taxation				(3,583)
Minority interests, net of taxes				(1,544)
Net profit for the year				14,794

By Product
2001	Beverages	Others	Elimination	Total
	(S$'000)	(S$'000)	(S$'000)	(S$'000)
Segment revenue from external customers	79,294	4,929	-	84,223
Inter segment revenue	102,632	30,256	(132,888)	-
Total revenue	181,926	35,185	(132,888)	84,223
Segment results	13,096	9,818	(6,661)	16,253
Finance Costs				(22)
Share of loss of associated company				(154)
Profit from operating activities before taxation and minority interests				16,077
Taxation				(3,666)
Minority interests, net of taxes				(1,435)
Net profit for the year				10,976

By Country 2002	Russia	Eastern Europe & Central Asia	Others	Elimination	Total
	(S$'000)	(S$'000)	(S$'000)	(S$'000)	(S$'000)
Segment revenue from external customers	61,097	36,864	14,129	-	112,090
Inter segment revenue			150,996	(150,996)	-
Total Revenue	61,097	36,864	165,125	(150,996)	112,090


 

By Country 2001	Russia	Eastern Europe & Central Asia	Others	Elimination	Total
	(S$'000)	(S$'000)	(S$'000)	(S$'000)	(S$'000)
Segment revenue from external customers	48,212	28,015	7,996	-	84,223
Inter segment revenue			132,888	(132,888)	-
Total Revenue	48,212	28,015	140,884	(132,888)	84,223



 

14. In the review of performance, the factors leading to any material changes in contributions to turnover and earnings by the business or geographical segments


Included in paragraph 8 above.



15. A breakdown of sales



 

	Group S$'000
			%
	31/12/2002	31/12/2001	Change
	(S$'000)	(S$'000)
Sales reported for first half year	44,313	33,430	32.55
Operating profit after tax before deducting minority interests reported for first half financial year	5,430	4,353	24.74
Sales reported for second half year	67,777	50,793	33.44
Operating profit after tax before deducting minority interests reported for second half financial year	10,908	8,058	35.37



 

16. A breakdown of the total annual dividend (in dollar value) for the issuer's latest full year and its previous full year


Total Annual Dividend (Refer to Para 16 of Appendix 7.2 for the required details)



	Latest Full Year (S$)	Previous Full Year (S$)
Ordinary	3,354,000	1,947,900
Preference	0	0
Total:	3,354,000	1,947,900


 

BY ORDER OF THE BOARD

Loh Shu Chun
Company Secretary
25/02/2003