Professional Documents
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1(a) An Income statement (for the group) together with a comparative statement for the corresponding
period of the immediately preceding financial year.
Income tax expenses (474) (606) -21.78% (919) (1,066) -13.79% (319)
Profit after income tax 2,752 2,332 18.01% 5,550 5,637 -1.54% 1,930
Exchange differences on
(63) (206) -69.42% (66) 685 -109.64% 60
translating foreign operations
Other comprehensive income
(63) (206) -69.42% (66) 685 -109.64% 60
for the period
Total comprehensive income
2,689 2,126 26.48% 5,484 6,322 -13.26% 1,990
for the period
Net foreign exchange (loss) gain 932 (270) -445.19% 854 (271) -415.13% 241
Allowance for doubtful trade (18) (11) 63.64% (182) (285) -36.14% (15)
Allowance for stock
(3) (184) NM (13) (241) -94.61% -
obsolescence
Amortisation of intangible assets (2,812) (2,242) 25.42% (8,105) (6,254) 29.60% (2,696)
Depreciation of fixed assets (1,053) (823) 27.95% (3,039) (2,229) 36.34% (999)
Profit / (loss) on disposal of
property, 16 (1) -1700.00% 49 (29) -268.97% 33
plant and equipment
Fair value change of derivative
(5) - NM (27) - NM (22)
financial Instrument
Share of result of a jointly
(93) - NM (320) - NM (84)
controlled entity
Note 1: 2Q09 Profit and loss statement is used for comparison purposes only.
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.
ASSETS
Current assets:
Cash and cash equivalent 12,906 15,055 14,806 371 98
Pledged bank deposits 3,408 8,616 5,346 - 1,382
Derivative financial instruments 3,653 - 1,678 1,295 -
Trade receivables 123,286 121,687 125,194 - -
Other receivables and prepayments 6,152 4,399 5,840 105,123 104,651
Inventories 10,850 9,112 9,999 - -
Legal reserve 7 7 7 - -
Currency translation reserve 2,861 2,927 2,923 - -
Share option reserve 1,720 1,060 1,500 1,720 1,060
Accumulated profits (losses) 68,948 63,904 66,293 (1,267) (257)
Equity attributable to equity holders of
the Company 190,137 184,499 187,324 117,054 117,404
Minority interest 850 544 953 - -
Total equity 190,987 185,043 188,277 117,054 117,404
Note 1 : Balance sheet as at 31 December 2008 is the latest audited balance sheet.
Note 2 : Balance sheet as at 30 June 2009 is used for comparison.
1 (c) A cash flow statement (for the group, together with a comparative statement for the corresponding period of the
immediately preceding financial year.
Net cash generated from operating activities 4,660 2,302 11,198 1,538
Net decrease in cash and cash equivalents (1,900) (1,717) (2,149) (15,285)
Cash and cash equivalent at beginning of the quarter 14,806 26,419 15,055 39,987
(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 capitalization issues and distributions to shareholders, together with a
comparative statement for the corresponding period of the immediately preceding financial year.
GROUP
*Currency Share
Q3 2009 Movement Issued Share Contributed Legal translation Option Accumulated Minority Total
capital premium surplus reserve reserve reserve profits / (loss) Total interests Equity
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
Balance at 1 Jul 2009 26,571 88,496 1,534 7 2,923 1,500 66,293 187,324 953 188,277
Currency translation
difference - - - - (62) - - (62) - (62)
Dividends - - - - - - - - (200) (200)
Recognition of share-
based payment - - - - - 220 - 220 - 220
Total comprehensive
income for the period - - - - - - 2,655 2,655 97 2,752
Balance at 30 Sep
2009 26,571 88,496 1,534 7 2,861 1,720 68,948 190,137 850 190,987
Q3 2008 Movement
Balance at 1 Jul 2008 23,048 85,113 1,534 7 3,052 2,011 62,724 177,489 291 177,780
Currency translation
difference - - - - (206) - - (206) - (206)
Recognition of share-
based payment - - - - - 100 - 100 - 100
Total comprehensive
income for the period - - - - - - 2,192 2,192 140 2,332
Balance at 30 Sep
2008 23,048 85,113 1,534 7 2,846 2,111 64,916 179,575 431 180,006
COMPANY
*
Currency Share
Q3 2009 Movement Issued Share Contributed Legal translation Option Accumulated Minority Total
capital premium surplus reserve reserve reserve profits / (loss) Total interests Equity
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
Balance at 1 Jul 2009 26,571 88,496 1,534 - - 1,500 (883) 117,218 - 117,218
Recognition of share-
based payment - - - - - 220 - 220 - 220
Total comprehensive
income for the period - - - - - - (384) (384) - (384)
Balance at 30 Sep
2009 26,571 88,496 1,534 - - 1,720 (1,267) 117,054 - 117,054
Q3 2008 Movement
Balance at 1 Jul 2008 23,048 85,113 1,534 - - 2,011 (51) 111,655 - 111,655
Recognition of share-
based payment - - - - - 100 - 100 - 100
Total comprehensive
income for the period - - - - - - (103) (103) - (103)
Balance at 30 Sep
2008 23,048 85,113 1,534 - - 2,111 (154) 111,652 - 111,652
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 purposes 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 well as the number of shares held as treasury shares, if any, against the total
number of issued shares excluding treasury shares of the issuer, as at end of the current financial period
reported on and as at the end of the corresponding period of the immediately preceding financial year.
Ordinary shares of US$0.05 each at 1 Jan 2009 & 30 Sep 2009 531,410 26,571
2 October 2004 to 26
3 October 2003 May 2013 S$0.6778 3,327,677 - (22,133) 3,305,544
24 April 2009 to 25
25 April 2008 April 2018 S$0.226 19,919,580 -* - 19,919,580
27 November 2009 to
28 November 2008 28 Nov 2018 S$0.093 20,000,000 - - 20,000,000
*As at 2 October 2009, 7,387,000 shares were issued pursuant to the exercise of employee share options.
1(d) (iii) To show the total number of issued shares excluding treasury shares as at the end of the current
financial period and as at the end of the immediately preceding year.
1(d) (iv) A statement showing all sales, transfers, disposal, cancellation and/or use of treasury shares as at
end of the current financial period reported on
The Company has not implemented Share Purchase Plan. As such, there is no treasury shares
transaction for year ending 30 September 2009.
2. Whether the figures have been audited, or reviewed and in accordance with which standard (e.g.
Singapore Standard on Auditing 910, Engagements to Review Financial Statements, or an
equivalent standard).
3. Where the figures have been audited or reviewed, the auditors’ report (including any qualifications or
emphasis of matter).
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 accounting policies and methods of computation applied by the Group are consistent with those
used in its most recently audited financial statements as at 31 December 2008 except for the
adoption of certain Financial Reporting Standards (“FRS”) and interpretations of FRS (“INT FRS”)
that are mandatory for the financial year beginning on or after 1 January 2009. The adoption of
these FRS and INT FRS has no significant impact on the financial position or performance of the
Group.
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.
On 1 January 2009, the Group adopted the revised adopted the revised Singapore Financial
Reporting Standard (“FRS 1R”) – Presentation of Financial Statements. FRS 1R requires all
changes in equity arising from transactions with owners in their capacity as owners to be presented
separately from components of comprehensive income. Components of comprehensive income are
presented in the Consolidated Statement of Comprehensive Income.
6. Earnings per ordinary share of the group for the current period reported on and the corresponding
period of the immediate preceding financial year, after deducting any provision for preference
dividends.
Note 1) The weighted average number of ordinary shares in issue for 3Q2009: 531,410,184 and YTD Sep
2009: 563,189,468 (3Q2008 & YTD Sep 2008 are also 460,960,102).
Note 2) The earnings per share on a fully diluted basis are calculated on the adjusted average number of
ordinary shares for 3Q2009: 531,410,184 and YTD Sep 2009: 553,633,811 (3Q2008 & YTD Sep 2008 are
also 460,960,102).
7. Net asset value (for the issuer and group) per ordinary share based on the total number of issued
shares excluding treasury shares of the issuer at the end of the (a) current period reported on and
(b) immediately preceding financial year.
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, (where applicable)
seasonal or cyclical factors. It must also discuss any material factors that affected cash flow,
working capital, assets or liabilities of the group during the current financial period reported on.
The following paragraphs should be read in conjunction with our Profit and Loss Statement for
quarter ended 30 September 2009 as presented on Section 1(a) of this document.
Revenue
The Group reported a 1.5% increase in 3Q09 revenue to US$46.3m over 3Q08. For the 9 months of
FY09, the Group registered 8.5% revenue growth to US$133.9m.
Digital Media group continued to be the growth driver of revenue for 3Q09 and the 9 months; at
11.0% and 23.3% respectively. This spurred Digital Media Group to contribute 34.5% of 3Q09 and
34.3% of revenue for the 9 months. Although Managed Services division grew by 47% growth in
3Q09, this growth was insufficient to offset the lower Infrastructure Solutions revenue; especially
from outside of China. As a result, Infrastructure Enabling group registered a decline in revenue of
2.9% in 3Q09. For the 9 months of FY09, Infrastructure Enabling group contributed 65.7% of total
revenue; compared to 69.8% in the same corresponding period last year.
The Group had a slow quarter of revenue from outside China in 3Q09; as compared to 3Q08, due to
the festive season in Malaysia and Indonesia. Revenue from this geography declined to 17.8%;
compared to 26% in 3Q08. This led to a revenue contribution of 24.6% for the 9 months of FY09
versus 27.7% for the 9 months of FY08. Revenue from China grew by 13.1% for the 9 months and
China contributed 75.4% of total revenue; compared to 72.3% in the previous corresponding period.
Gross Margins
Gross margins in 3Q09 normalized back to 25.7%; compared to 22.3% in 2Q09 and 26.21% in
3Q08. For the 9 months; gross margins at 24.4% was 1.5% lower than the previous period due to
sales mix.
The Group continued to exercise control over its operating expenses; despite generating higher
revenue for the 9 months. 3Q09 total operating expense at US$5.4m was about US$0.9m lower
than 3Q08. US$0.2m increase in depreciation expense was offset by about US$1.2m exchange
gains from the stronger Indonesian rupiah and Korean Won.
Similarly, US$0.8m higher depreciation expenses for 9 months of FY09 were offset by total
US$0.7m savings in distribution and administration expenses and US$1.1m of exchange gains. As
a result, the Group achieved a US$1.1m lower total operating expense of US$16.6m for the 9
months of FY09 over the same period last year.
Total other operating expense in 3Q09 at US$3.1m was about US$0.4m more than 3Q08. For the 9
months of FY09, other operating expense at US$9.0m was US$1.5m higher than the 9 months of
FY08. The increase was due mainly to increases in amortisation expenses as a result of on-going
commercialization of the Group’s software.
The Group incurred expenditure on software development activities to generate new products and
add more features to its multi-media software during the last three years as part of DMX’s ongoing
software development activities. Such expenditure were capitalised as intangible assets and
amortised on a straight-line basis over 3 years upon commercial deployment. As the Group gained
momentum in the commercial deployment of its multi-media software in the digital media market,
higher amortisation of intangible assets was charged.
Earnings
DMX’s 3Q09 profit after tax at US$2.8m was US$0.4m or 18.0% better than 3Q08 and 42.6% better
than 2Q09. For the 9 months, the Group has caught up with the profit after tax of the previous
period at US$5.6m; and exceeded full year 2008 PAT of US$3.6m.
Balance Sheet
The following paragraphs should be read in conjunction with our Balance Sheet as of 30 September
2009 as presented on Section 1(b) (i) of this document.
Total current assets increased slightly by US$1.4m to US$160.3m as at 30 September 2009. This
was due to the net positive impact from:-
• US$3.7m increase in derivative financial instruments which are mainly structured deposits
and bonds placed with banks.
Of the US$123.3m trade receivables, about 86.9% or US$107.1m (30 June 09: 83.6% or
US$104.7m) relates to projects with numerous telecom operators in China, Malaysia,
Indonesia and numerous cable TV operators in China. All these operators are reputable
and credit-worthy customers. The nature of such projects is that payment is based on
milestone performance such as equipment delivery, project installation, completion and
acceptances; which may take between 6 to 18 months to be fully accepted.
The above trade receivables are irrevocable and not from any interested party. The Group
has a task force in place that work closely with the each of the telecom and cable TV
operator on the progress of each project being implemented.
expenditure on spares and demonstration equipment to support the increased revenue and
customers; US$1.1m increase in goodwill resulting from acquisition of 1MP and US$1.1m decrease
in intangible assets.
Total current liabilities decreased by about US$5.3m to US$29.2m as at 30 September 2009. This
was due mainly to US$3.4m decrease in bank loans and US$1.8m decrease in trust receipts loans.
The Group increased its total equity by US$6.0m to US$191.0m as at 30 September 2009. This was
contributed largely by US$5.0m increase in accumulated profits and US$0.7m increase in share
option reserve.
Cash flow
The following paragraphs should be read in conjunction with our Cash flow Statement as of 30
September 2009 as presented on section 1(c) of this document.
During 3Q09 and the 9 months of FY09, the Group generated US$5.2m and US$12.4m of cash from
operations respectively. These ware significant improvements over the same corresponding period.
Improved collections from trade receivables and overall management of payables during the period
enabled the Group to generate positive cash flow from operations. After payment for income tax
and interest, the Group generated net cash from operating activities of US$4.7m and US$11.2m for
3Q09 and 9 months of FY09 respectively, compared to US$2.3m and US$1.5m cash generation
during 3Q08 and 9 months of FY08.
Net cash used in investing activities in 3Q09 was US$5.7m; compared to US$3.3m in 3Q08. For the
9 months, the Group utilized about US$10.2m in investing activities; which was about the same
amount utilized for the 9 months of FY08.
The Group utilized about US$0.8m and US$3.1m cash from financing activities in 3Q09 and 9
months of FY09 respectively. The Group repaid more trust receipts loans.
During 3Q09, cash generated from operating activities were lower than cash utilisation in investing
and financing activities, giving rise to US$1.9m decrease in cash and cash equivalent for the quarter.
This decrease in 3Q09 caused the Group to end the 9 months of FY09 with about US$12.9m in cash
and cash equivalent; about US$2.2m below the start of the year.
9. Where a forecast, or a prospect statement, has been previously disclosed to shareholders, any
variance between it and actual results.
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.
As the Group enters into its last quarter of FY09, the Group sees improving market sentiment and
increased activities by telecom operators and enterprises on IT capex spending and hence believes
that our core business activities will remain on track for the rest of FY2009.
The improved sentiment has given the Group measured confidence that it should not need to incur
any unexpected impairment or allowances for the year. With the profits after tax for the 9 months of
FY09 at US$5.6m, about US$2.0m higher than full year 2008, and barring unforeseen
circumstances, the Group expects FY09 profits after tax to be much better than FY08.
Additionally, the Group believes that our established business network, customer reference base
and track record have strengthened our ongoing long-term business fundamentals.
With the primary objective of enhancing these business fundamentals, the Group entered into a
subscription agreement with KDDI Corporation of Japan on 10 September 2009.
This strategic transaction is intended to accelerate the growth of the Group to become a leading
telecom and media solutions provider in Asia Pacific.
KDDI is the second largest telecom operator in Japan and one of the mega-carrier in Asia Pacific
providing fixed, mobile and broadcasting services. According to the agreement, the Group will issue
over 588 million new shares to KDDI; raising cash of about S$188.4 million. Upon completion of the
proposed transaction towards end of the year; KDDI will become a 50.1% controlling shareholder of
the Group; on a fully diluted basis.
KDDI will support the Group to continue to develop and grow its existing business through referring
appropriate business opportunities, jointly developing new products and services and by transferring
specialized technology, where appropriate, to enhance the Group’s competitiveness and products
offering.
Additionally, the capital raised will enhance the balance sheet of the Group; enabling the Group to
participate in bigger projects, expand its geographical coverage and invest into new application
business to take advantage of the new business opportunities within the telecom industry in China.
The Group looks forward to forging ahead with this strategic investment and alliance; to capitalise on
the anticipated business opportunities.
11. Dividend
Any dividend declared for the current financial period reported on? No
Any dividend declared for the corresponding period of the immediately preceding financial year?
No
c. Date payable
Not Applicable
Not applicable
The Directors confirm that, to the best of their knowledge, nothing has come to the attention of the
Board of Directors of the Company which may render the Group’s unaudited financial result for the
third quarter ended 30 September 2009 to be false or misleading in any material aspect.