Asiaone 1-42

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ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS We are a part of the larger SPH Group. We have benefited significantly from our close working relationship with our parent company, which has provided us with the content and resources to commence our business. SPH provides us with substantial news and related information as well as its large advertisement client base for which we tap on to commence our business. In addition, we also receive continued support from its newsrooms for timely updates. Details on our dealings with SPH are set out in the “Interested Person Transactions” section of this Prospectus. We also received financial support from SPH prior to the Invitation, which has provided us with the necessary capital to commence and continue our business. The financial support from SPH in the past has been in the form of equity injection and inter-company loans, which were interest free and had no fixed term of repayment. As discussed in the “Risk Factors” section of this Prospectus, we may no longer be able to rely on the operating and financial resources provided by the SPH Group after the Invitation. However, we expect the net proceeds from the Invitation to provide the capital resources we are likely to require in FY2000 and the near future. REVIEW OF OPERATIONS Six Months Ended 28 February 1999 Compared with Six Months Ended 29 February 2000 Revenue. Revenue increased by 64.0% from $1.70 million in the six months ended 28 February 1999 to $2.79 million in the six months ended 29 February 2000. This increase was attributed mainly to the substantial increase in revenue from our content and other services (archive database sales and e-commerce inclusive) as well as audiotex services. Revenue from content and other services increased by 74.3% from $0.58 million in the six months ended 28 February 1999 to $1.02 million in the six months ended 29 February 2000. The increase was primarily attributable to higher archive database sales and e-commerce revenues. Archive database sales rose due to the increase in usage by the customers of three of our key co-sellers. E-commerce revenues increased mainly due to the addition of approximately 50 more online stores at Shop@AsiaOne between 28 February 1999 and 29 February 2000. Revenues from audiotex services improved by 96.9% from $0.56 million in the six months ended 28 February 1999 to $1.10 million in the six months ended 29 February 2000 mainly due to higher usage of our 1-800 Bizfone service consequent to the addition of 5 more 1-800 Bizfone customers from 28 February 1999 to 29 February 2000 as well as the increase in usage by some of our existing customers. Cost of Revenue. Cost of revenue increased by 74.3% from $1.35 million in the six months ended 28 February 1999 to $2.36 million in the six months ended 29 February 2000. This is primarily due to the higher staff cost and depreciation expenses. Staff cost increased from $1.27 million in the six months ended 28 February 1999 to $1.94 million in the six months ended 29 February 2000 as our staff strength more than doubled. Depreciation expenses increased principally as a result of the assets transferred from SPH’s Multimedia division to us in November 1999 under the Business Transfer Agreement described in the “General Information on Our Group – History” section of this Prospectus. For the six months ended 29 February 2000, we did not receive any grant from any government bodies or agencies to subsidise our cost of revenue, while we received $0.10 million in grant from the National Computer Board for the six months ended 28 February 1999. Operating Expenses. Operating expenses increased 147.8% from $1.05 million, or 61.5% of revenues, in the six months ended 28 February 1999 to $2.59 million, or 92.9% of revenues, in the six months ended 29 February 2000. This increase was due to the substantial increase in expenses pertaining to advertising and promotion, communication lines, legal costs, software and hardware maintenance and management fees paid to our parent company. Advertising and promotion, communication and legal expenses increased, in conjunction with our re-positioning and re-launch at the start of the new millennium, and as we intensify our marketing and branding efforts. Software and hardware maintenance costs increased as we upgraded our technological infrastructure. 39
ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Loss Before Tax. The loss before tax widened from $0.70 million for the six months ended 28 February 1999 to $2.14 million for the six months ended 29 February 2000. The aggregate increase in our cost of revenue and operating expenses more than offset the increase in our revenue, thereby resulting in the 207.2% increase in our loss before tax. Income Tax Expenses. There was no income tax charge as we were operating at a tax loss position. FY1998 Compared to FY1999 Revenue. Revenue decreased marginally by 1.5% from $4.18 million in 1998 to $4.12 million in 1999. The decline in advertising revenue was moderated by the increase in revenue from content and other services. Revenue from advertising services fell by 22.0% from $1.38 million in FY1998 to $1.08 million in FY1999. The drop in advertising revenue was due mainly to the reduction in advertisements placed during the Asian economic crisis. Revenue from content and other services increased from $1.41 million in FY1998 to $1.74 million in FY1999. The improvement in revenue from content and other services was largely attributable to the increase in our archive database sales as well as e-commerce revenue. Archive database sales rose due to increased usage. Ecommerce revenues increased due to the addition of approximately 40 more online stores at Shop@AsiaOne between 31 August 1998 and 31 August 1999. Cost of Revenue. Cost of revenue increased by 34.0% from $2.05 million in 1998 to $2.75 million in 1999 primarily due to lower grant income received. We received a lower amount of grant from the Economic Development Board of Singapore to subsidise our cost of developing the AsiaOne website in FY1999, and hence our grant income decreased by 90.1% from $0.97 million in FY1998 to $0.10 million in FY1999. Depreciation expenses however increased by 23.1% from $0.26 million in FY1998 to $0.33 million in FY1999 due to more personal computers purchased in FY1999. Operating Expenses. Operating expenses increased by 34.1% from $1.<strong>42</strong> million, or 33.9% of revenues in FY1998 to $1.90 million or 46.2% of revenues in FY1999. This increase was mainly due to the 280.2% increase in the advertising and promotional costs from $0.13 million in FY1998 to $0.50 million in FY1999. We incurred more advertising and promotional expenses in FY1999 as a result of our efforts to promote our e-commerce activities. Profit (Loss) Before Tax. We slipped into the red in FY1999 with a loss of $0.54 million compared with the profit before tax of $0.71 million in FY1998. This is the result of the decline in our revenue in FY1999 coupled with the increase in our cost of revenue as well as our operating expenses. Income Tax Expenses. There was no income tax charge as we were operating at a tax loss position. FY1997 Compared to FY1998 Revenue. Revenue increased by 28.2% from $3.26 million in FY1997 to $4.18 million in FY1998. This increase was primarily driven by the increase in revenue from content and other services which increased by 70.2% from $0.83 million in FY1997 to $1.41 million in FY1998. The increase in revenue from content and other services was largely attributable to the new source of revenue from e-commerce, the increase in archive database sales and the increase in the number of copies of the Singapore Career Guide sold by us in FY1998. Cost of Revenue. Cost of revenue decreased by 21.5% from $2.61 million in FY1997 to $2.05 million in FY1998 as higher staff cost was incurred in FY1997 and grant income received decreased. Staff cost decreased by 12.7% from $3.03 million in FY1997 to $2.64 million in FY1998 as our headcount decreased and wage cuts were implemented. The aggregate amount of grant we received from the Economic Development Board of Singapore and the National Computer Board decreased by 31.8% from $1.<strong>42</strong> million in FY1997 to $0.97 million in FY1998, thereby reducing the subsidy on our cost of revenue. Depreciation expense also decreased by 69.3% from $0.86 million in FY1997 to $0.26 million in FY1998. The higher depreciation expense in FY1997 was attributable to the one time write-off of cost relating to the upgrade in our computer systems. 40
Page 1 and 2: PROSPECTUS DATED 23 MAY 2000 SPH AS
Page 3 and 4: — Customers And Suppliers .......
Page 5 and 6: CORPORATE INFORMATION Board of Dire
Page 7 and 8: “FY” : Financial year ended or
Page 9 and 10: “Reserved Tranche” : The offer
Page 11 and 12: GLOSSARY OF TECHNICAL TERMS “onli
Page 13 and 14: The Application List will open at 6
Page 15 and 16: Allocation of New Shares under the
Page 17 and 18: RESULTS OF APPLICATION AND DISTRIBU
Page 19 and 20: SELLING RESTRICTIONS DETAILS OF OUR
Page 21 and 22: Our present business model is based
Page 23 and 24: THE INVITATION PROSPECTUS SUMMARY S
Page 25 and 26: An investment in our Shares involve
Page 27 and 28: We have a short operating history R
Page 29 and 30: RISK FACTORS We depend on a reliabl
Page 31 and 32: E-commerce operations RISK FACTORS
Page 33 and 34: RISKS RELATING TO THE SHARES RISK F
Page 35 and 36: USE OF PROCEEDS The net proceeds fr
Page 37 and 38: SELECTED FINANCIAL DATA You should
Page 39: ANALYSIS OF FINANCIAL CONDITION AND
Page 43 and 44: ANALYSIS OF FINANCIAL CONDITION AND
Page 45 and 46: GROUP STRUCTURE Our group structure
Page 47 and 48: As at Authorised Share Capital 29 F
Page 49 and 50: GENERAL INFORMATION ON OUR GROUP Ex
Page 51 and 52: SHAREHOLDERS GENERAL INFORMATION ON
Page 53 and 54: INDUSTRY OVERVIEW BUSINESS The info
Page 55 and 56: BUSINESS The Singapore Information
Page 57 and 58: BUSINESS We recognise annual subscr
Page 59 and 60: Currently we do not engage in any b
Page 61 and 62: As at 30 April 2000, there were app
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Page 65 and 66: BUSINESS The categories of products
Page 67 and 68: Auctions BUSINESS The Internet’s
Page 69 and 70: BUSINESS Designed for both consumer
Page 71 and 72: (ii) Button Ads BUSINESS Small adve
Page 73 and 74: BUSINESS While the Internet has sti
Page 75 and 76: Suppliers BUSINESS The suppliers wh
Page 77 and 78: BUSINESS In addition to the content
Page 79 and 80: BUSINESS We will be introducing new
Page 81 and 82: (ii) Message Boards BUSINESS We wil
Page 83 and 84: MARKETING AND BRANDING STRATEGY BUS
Page 85 and 86: INTELLECTUAL PROPERTY Our sharehold
Page 87 and 88: Equipment to support E-commerce Our
Page 89 and 90: BOARD OF DIRECTORS DIRECTORS, SENIO
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DIRECTORS, SENIOR MANAGEMENT AND ST
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Yuan Zhou, aged 37, is the Vice Pre
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The Licence Agreement may be termin
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As at the date of this Prospectus,
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(viii) technical and research resou
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(ii) transactions in value equal to
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Entry into of forex, swap and optio
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• 312,500 preference shares of pa
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23 May 2000 The Shareholders SPH As
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FINANCIAL STATEMENTS Profit and Los
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FINANCIAL STATEMENTS Statement of C
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FINANCIAL STATEMENTS Statements of
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FINANCIAL STATEMENTS 2. Basis of pr
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3. Significant accounting policies
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3. Significant accounting policies
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5. Cost of revenue (cont’d) FINAN
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10. Net earnings (loss) per share (
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13. Fixed assets (cont’d) FINANCI
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14. Trade creditors FINANCIAL STATE
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FINANCIAL STATEMENTS 17. Significan
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21. Subsequent events (cont’d) (e
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GENERAL AND STATUTORY INFORMATION I
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GENERAL AND STATUTORY INFORMATION 1
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Article 66 GENERAL AND STATUTORY IN
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Article 76 GENERAL AND STATUTORY IN
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Article 102 GENERAL AND STATUTORY I
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GENERAL AND STATUTORY INFORMATION (
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CONSENTS GENERAL AND STATUTORY INFO
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APPENDIX A 4. A person who has agre
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APPENDIX A 15. Investors may subscr
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APPENDIX A ADDITIONAL TERMS AND CON
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APPENDIX A (3) tick the appropriate
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APPENDIX A An Applicant must ensure
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APPENDIX A 9. The Applicant must ha
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APPENDIX A (d) in respect of the Ne
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APPENDIX A (d) This application is
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APPENDIX B RULES OF THE ASIAONE PRE
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3. ELIGIBILITY OF PARTICIPANTS APPE
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7. RIGHTS TO EXERCISE OPTIONS APPEN
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7.6 In the event that:- APPENDIX B
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APPENDIX B 10. TAKE-OVER AND WINDIN
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APPENDIX B 10.6 If in connection wi
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APPENDIX B 18.2 Save for the taxes
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To: SPH AsiaOne Ltd, News Centre, 8
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APPENDIX B ASIAONE PRE-IPO SHARE OP
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APPENDIX C RULES OF THE ASIAONE (20
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APPENDIX C “Parent Group” The P
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APPENDIX C 4.2 The number of Shares
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APPENDIX C (c) any other event appr
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APPENDIX C 9.3 Shares which are all
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14. MODIFICATIONS TO THE SCHEME APP
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APPENDIX C (c) (i) the names of, an
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APPENDIX C Vesting Schedule Subject
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Please print in block letters Name
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Please print in block letters Name
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