News

Full Year Financial Statement And Dividend Announcement For The Period Ended 31/12/2003

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$'000)	Group (S$'000)	% Increase/ (Decrease)
	Jan- Dec 2003	Jan- Dec 2002
Revenue	139,590	112,090	24.53
Costs and expenses
Changes in inventories of finished goods	(3,310)	6,029	NM
Raw materials and consumables used	(63,403)	(57,775)	9.74
Staff costs	(9,897)	(7,013)	41.12
Depreciation and amortisation expenses	(1,471)	(1,007)	46.08
Impairment loss	(596)	(137)	NM
Foreign exchange loss	(1,305)	(1,739)	(24.96)
Other operating expenses (Note 1)	(46,158)	(30,839)	49.67
Other income	202	596	(66.11)
Total costs and expenses	(125,938)	(91,885)	37.06
Profit from operating activities	13,652	20,205	(32.43)
Finance costs	(89)	(53)	67.92
Share of loss of associated company	(120)	(231)	(48.05)
Profit from ordinary activities before taxation	13,443	19,921	(32.52)
Taxation (Note 2)	(1,800)	(3,583)	(49.76)
Minority interests, net of taxation	(1,480)	(1,544)	(4.15)
Net profit for the year	10,163	14,794	(31.30)



NM - Not meaningful

Note 1: Included in other operating expenses is provision for doubtful debts of S$1,406,000 (2002:S$35,000) mainly due to the frozen seafood business.

Note 2: The reduction in effective tax rate was due to tax incentives enjoyed by the subsidiary 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	Group	Company	Company
	31/12/2003 (S$'000)	31/12/2002 (S$'000)	31/12/2003 (S$'000)	31/12/2002 (S$'000)
Assets Less Liabilities
Non-Current Assets
Fixed assets	13,459	11,994	-	-
Investments in subsidiary companies	-	-	12,519	12,676
Investment in associated company	1,142	448	1,082	428
Deferred tax assets	922	218	-	-
Intangible assets	39	59	-	-
	15,562	12,719	13,601	13,104
Current Assets
Cash and bank balances	11,825	8,122	30	47
Trade receivables	20,591	15,880	-	-
Prepayments, other deposits and other receivables	2,370	3,840	16	108
Amounts due from subsidiary companies	-	-	18,118	21,306
Amount due from associated company	188	991	188	991
Inventories	23,633	29,221	-	-
	58,607	58,054	18,352	22,452
Current Liabilities
Trade payables	(7,920)	(10,619)	-	-
Bills payable	-	(167)	-	-
Other payables	(3,379)	(4,210)	(234)	(211)
Amount due to associated company	(37)	-	-	-
Finance lease liabilities	-	(7)	-	-
Provision for taxation	(2,045)	(2,599)	-	(2)
	(13,381)	(17,602)	(234)	(213)
Net Current Assets	45,226	40,452	18,118	22,239
Non-Current Liabilities
Finance lease liabilities	-	(28)	-	-
Deferred tax liabilities	(509)	(306)	-	-
	(509)	(334)	-	-
Net Assets	60,279	52,837	31,719	35,343
Equity
Share capital	17,200	17,200	17,200	17,200
Reserves	39,802	33,142	14,519	18,143
	57,002	50,342	31,719	35,343
Minority interests	3,277	2,495	-	-
	60,279	52,837	31,719	35,343

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

Amount repayable in one year or less, or on demand



As at 31/12/2003

As at 31/12/2002

Secured	Unsecured	Secured	Unsecured
S$'000 0	S$'000 0	S$'000 7	S$'000 167



Amount repayable after one year



As at 31/12/2003

As at 31/12/2002

Secured	Unsecured	Secured	Unsecured
S$'000 0	S$'000 0	S$'000 28	S$'000 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.

	31/12/2003	31/12/2002
	(S$'000)	(S$'000)
Cash flows from operating activities:
Profit from ordinary activities before taxation and minority interests	13,443	19,921
Adjustments for:
Amortisation of goodwill	20	20
Depreciation of fixed assets	1,451	1,004
Exchange realignment	(71)	(295)
Gain on liquidation/disposal of subsidiary companies	-	(445)
Loss on disposal of fixed assets	224	24
Interest income	(4)	(32)
Interest expense	89	53
Share of loss of associated company	120	231
Impairment loss on fixed assets	596	137
Capital reserve written off	-	(16)
Operating income before reinvestment in working capital	15,868	20,602
Increase in receivables	(3,241)	(7,327)
Decrease/ (increase) in inventories	5,588	(8,075)
(Decrease)/ increase in payables	(3,660)	6,946
Net cash generated from operations	14,555	12,146
Income taxes paid	(2,855)	(4,844)
Net cash generated from operating activities	11,700	7,302
Cash flows from investing activities
Interest received	4	32
Net cash inflow from disposal of a subsidiary company	-	6
Purchase of fixed assets	(3,931)	(4,037)
Proceeds from sale of fixed assets	68	18
Proceeds on maturity of other financial asset	-	500
Dividends paid to minority shareholders of subsidiary companies	(660)	(1,257)
Net cash used in investing activities	(4,519)	(4,738)
Cash flows from financing activities
Interest paid	(89)	(53)
Dividends paid to shareholders of the Company	(3,354)	(1,948)
Repayment of interest-bearing borrowings	(35)	(1,131)
Loan to associated company	-	(139)
Net cash used in financing activities	(3,478)	(3,271)
Net increase/ (decrease) in cash and cash equivalents	3,703	(707)
Cash and cash equivalents at beginning of the year	8,122	8,829
Cash and cash equivalents at end of the year	11,825	8,122

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 Currency Translation Reserve	Revenue Reserve	Total
	(S$'000)	(S$'000)	(S$'000)	(S$'000)	(S$'000)	(S$'000)
The Group
Balance as at 01/01/2002	17,200	6,086	16	355	14,263	37,920
Net profit for the year	-	-	-	-	14,794	14,794
Movements during the year	-	-	(16)	(408)	-	(424)
Dividends paid during the year	-	-	-	-	(1,948)	(1,948)
Balance as at 31/12/2002	17,200	6,086	-	(53)	27,109	50,342
Net profit for the year	-	-	-	-	10,163	10,163
Movements during the year	-	-	-	(149)	-	(149)
Dividends paid during the year	-	-	-	-	(3,354)	(3,354)
Balance as at 31/12/2003	17,200	6,086	-	(202)	33,918	57,002
The Company
Balance as at 01/01/2002	17,200	6,086	-	-	2,843	26,129
Net profit for the year	-	-	-	-	11,162	11,162
Dividends paid during the year	-	-	-	-	(1,948)	(1,948)
Balance as at 31/12/2002	17,200	6,086	-	-	12,057	35,343
Net (loss) for the year	-	-	-	-	(270)	(270)
Dividends paid during the year	-	-	-	-	(3,354)	(3,354)
Balance as at 31/12/2003	17,200	6,086	-	-	8,433	31,719

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 for 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 year under review. As at 31 December 2003, there were unexercised options for 17,365,000 of unissued ordinary shares of the Company under the Food Empire Share Option Scheme. (31/12/2002: 17,720,000)

During the year, additional 500,000 share options were granted under the Food Empire Share Option Scheme and 855,000 share options were cancelled.

2. Whether the figures have been audited or reviewed and in accordance with

which auditing standard or practice.

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 a 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.

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 31 December 2002.

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.

The Council on Corporate Disclosure and Governance ('CGDG") was established on 16 August 2002 to prescribe accounting standards for Singapore incorporated companies. The accounting standards prescribed by the CGDG, under the provisions of the Companies (Accounting Standards) Regulations 2002, are known as Financial Reporting Standards ("FRS"). Companies are required to comply with the provisions of the Companies (Accounting Standards) Regulations 2002 in preparing their financial statements covering periods beginning on or after 1 January 2003. The Company and the Group have adopted all the applicable FRS that have become effective during the financial period to date. The adoption of the FRS does not materially affect the results of the Company and the Group for the current or prior periods.

6. Earnings per ordinary share of the group for the current financial period reported

on and the corresponding period of the immediately preceding financial year,
after deducting any provision for preference dividends.

	Group Figures	Group Figures
	31/12/2003	31/12/2002
Earnings per share
(i) Based on existing issued share capital (cents)	2.95	4.30
(ii) On a fully diluted basis (cents)	2.88	4.22


Earnings per ordinary share on existing issued share capital is computed based on weighted average number of 344,000,000 ordinary shares during the year. (31/12/2002:344,000,000 ordinary shares)

Earnings per ordinary share on a fully diluted basis is computed based on weighted average number of 353,025,972 ordinary shares during the year adjusted to assume conversion of all potential dilution. (31/12/2002:350,872,323 ordinary shares)

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 financial period reported on; and
(b) immediately preceding financial year.

	Group	Group	Company	Company
	31/12/2003	31/12/2002	31/12/2003	31/12/2002
Net asset value per ordinary share (cents)	16.57	14.63	9.22	10.27

8. A review of the performance of the group, to the extent necessary for a reasonable

understanding of the group's business. It must include a discussion of the
following:-

(a) 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; and

(b) any material factors that affected the cash flow, working capital, assets or
liabilities of the group during the current financial period reported on.

For the year ended 31 December 2003, the Group achieved a 24.5% increase in revenue to S$139.6 million as a result of broad-based sales growth in all core markets. Net Profit after Tax and Minority Interests ("PAT"), however, was down by 31.3% to S$10.2 million, mainly due to higher advertising and promotions ("A&P") expenditure and overseas office expenses.

Revenue

Table: Revenue by geographical segments

S$'000	FY03	FY02	% Increase/ (Decrease)
Russia	77,560	61,097	27.0
Eastern Europe & Central Asia	51,446	36,864	39.6
Others	10,584	14,129	(25.1)
Total	139,590	112,090	24.5


Stronger sales in key market segments Russia and Eastern Europe & Central Asia contributed to the increase in Group Revenue. Russia remained as the core contributor to Group Revenue at 55.6%, followed by Eastern Europe & Central Asia at 36.8%. Sales from "Others" market made up the balance of 7.6%.

Revenue from Russia grew 27.0% to S$77.6 million as compared to FY02. Revenue from Eastern Europe & Central Asia was up 39.6% to S$51.4 million compared to the previous year. The improvement in these core markets was the result of intensified advertising and promotions campaigns, the launch of new products and the expansion of distribution network.

Revenue from "Others" market decreased 25.1% mainly due to the cessation of frozen seafood trading.

Table: Revenue by product segments



S$'000	FY03	FY02	% Increase/ (Decrease)
Beverages	127,735	100,312	27.3
Others	11,855	11,778	0.7
Total	139,590	112,090	24.5


Revenue from the Beverages segment expanded 27.3% to S$127.7 million largely due to stronger demand for 3-in-1 instant coffee and coffee in tins and jars. The core brand MacCoffee is ranked as one of the leading instant coffee brands in markets such as Russia, Ukraine and Kazakhstan.

Revenue from "Others" segment grew to S$11.9 million, an increase of 0.7%, as snack food and convenience food posted higher sales which helped offset the decline in sales of frozen seafood.

Profit before Tax and Minority Interests

Profit before Tax and Minority Interests declined 32.5% to S$13.4 million in FY03 primarily due to higher operating and staff costs which were necessary to strengthen the Group's infrastructure for the longer term. Staff costs increased by 41.1% to S$9.9 million and Other Operating Expenses rose by 49.7% to S$46.2 million following higher overseas office expenses, A&P expenses, and logistics costs. However, raw materials and consumables used are in line with the increase in revenue after taking into consideration the changes in inventories of finished goods.

Higher overseas office expenses were incurred as a result of the Group's strategic move to strengthen its overseas presence and to gear up for greater business momentum. The Group also continued to invest in manpower to run the expanded operations.

As part of the Group's brand management programme to boost awareness of the Group's existing and new products, aggressive A&P activities such as media advertisements, wet samplings, trade shows and sponsorships were undertaken.

Higher logistics costs were incurred due to higher freight rates and increased sales volume. In addition, higher port charges were incurred for slow moving new products.

Depreciation and amortisation expenses were higher as the Group invested in new machineries and expanded the existing factory in Singapore during the year to handle the increase in demand.

Foreign exchange loss narrowed to S$1.3 million as compared to a loss of S$1.7 million a year ago.

Balance Sheet and Cash Flow Statements

The increase in trade receivables is in line with the increase in revenue. Better inventory management had resulted in a reduction in both inventory and trade payables.

The Group's net cash position increased by S$3.7 million to S$11.8 million in FY03. Net cash generated from operating activities increased to S$11.7 million largely due to better inventory management. Cash outflow of S$4.5 million in the Group's investment activities was for the purchase of new machineries and the payment of dividends to the minority shareholder of a subsidiary company. The Company paid dividends of S$3.4 million to its shareholders.

9. Where a forecast, or a prospect statement, has been previously disclosed to

shareholders, any variance between it and the actual results.

Not applicable.

10. A commentary at the date of the announcement of the significant trends and

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 market environment in our core markets is expected to remain challenging and competitive.

Foreign currency fluctuations will continue to be an important consideration as the bulk of the Group's revenue comes from overseas. Raw material costs are also expected to rise in 2004.

Nevertheless, the Group will continue to step up efforts to strengthen its operations and distribution network, reinforce its marketing and branding and more importantly, improve market share and bottomline.


Readers are cautioned not to place undue reliance on these forward-looking statements, which are based on the current view of management on current events.

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 Amount per Share (in cents)	0.5 cents per ordinary share (less tax)	0.75 cents per ordinary share (less tax)
Optional:- Dividend Rate (in %)
Par value of shares	S$0.05	S$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 Amount per Share (in cents)	0.5 cents per ordinary share (less tax)	0.75 cents per ordinary share (less tax)
Optional:- Dividend Rate (in %)
Par value of shares	S$0.05	S$0.05
Tax Rate	22%	22%



(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



2003	Beverages	Others	Elimination	Total
	(S$'000)	(S$'000)	(S$'000)	(S$'000)
Segment revenue from external customers	127,735	11,855	-	139,590
Inter segment revenue	114,760	40,259	(155,019)	-
Total revenue	242,495	52,114	(155,019)	139,590
Segment results	14,821	1,270	(2,439)	13,652
Finance costs				(89)
Share of loss of associated company				(120)
Profit from ordinary activities before taxation and minority interests				13,443
Taxation				(1,800)
Minority interests, net of taxation				(1,480)
Net profit for the year				10,163

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 ordinary activities before taxation and minority interests				19,921
Taxation				(3,583)
Minority interests, net of taxation				(1,544)
Net profit for the year				14,794


By Country



2003	Russia	Eastern Europe & Central Asia	Others	Elimination	Total
	(S$'000)	(S$'000)	(S$'000)	(S$'000)	(S$'000)
Segment revenue from external customers	77,560	51,446	10,584	-	139,590
Inter segment revenue	-	-	155,019	(155,019)	-
Total Revenue	77,560	51,446	165,603	(155,019)	139,590

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

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.

Please refer to paragraph 8.

15. A breakdown of sales.

	Group
	31/12/2003	31/12/2002	% Increase/ (Decrease)
	(S$'000)	(S$'000)
Sales reported for first half year	58,142	44,313	31.21
Operating profit after tax before deducting minority interests reported for first half financial year	4,554	5,430	(16.13)
Sales reported for second half year	81,448	67,777	20.17
Operating profit after tax before deducting minority interests reported for first half financial year	7,089	10,908	(35.01)

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	3,354,000
Preference	0	0
Total:	3,354,000	3,354,000

BY ORDER OF THE BOARD

Tan San-Ju
Company Secretary
21/02/2004