Asiaone 1-42
Asiaone 1-42
Asiaone 1-42
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ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS<br />
Operating Expenses. Operating expenses increased marginally by 2.8% from $1.38 million, or <strong>42</strong>.3%<br />
of revenue in FY1997 to $1.<strong>42</strong> million, or 33.9% of revenue in FY1998. This increase was due<br />
mainly to marginal increases in cost relating to advertising and promotion, communication line and<br />
software and hardware maintenance.<br />
Profit (Loss) Before Tax. We made a profit before tax of $0.71 million in FY1998 compared to a loss<br />
of $0.73 million in FY1997 as a result of the improvement in our revenue together with a reduction<br />
in our cost of revenue in FY1998.<br />
Income Tax Expenses. There was no income tax charge as we were operating at a tax loss position.<br />
LIQUIDITY AND CAPITAL RESOURCES<br />
As we commenced our activities as the Multimedia division of SPH, we had been dependent on<br />
SPH to provide the financing for our operations. As at 29 February 2000, we received a total of<br />
$10.00 million from SPH in the form of equity injection. In addition, we received, through SPH,<br />
grants totalling approximately $2.49 million from the Economic Development Board of Singapore and<br />
the National Computer Board since 1997.<br />
Other than the normal trade related credit given and received by us, we have no other loans or<br />
indebtedness. As at 29 February 2000, we had cash and cash equivalents of $3.53 million.<br />
Liquidity<br />
Net cash used in operating activities was $1.25 million and $1.59 million in FY1999 and the six<br />
months ended 29 February 2000 respectively.<br />
Our net cash used in investing activities in FY1999 and the six months ended 29 February 2000<br />
were primarily attributable to the amount paid for computers and office equipment transferred from<br />
SPH and additional computer equipment purchased.<br />
We anticipate that we may acquire or make investments in our related business, product and<br />
technologies or establish joint ventures or strategic partnerships that we believe will complement our<br />
current and future businesses. Some of these acquisitions or investments could be material. Save<br />
as disclosed in this Prospectus, we have no specific agreements or understandings with respect to<br />
any material acquisitions or investments at this time.<br />
Our net cash generated from financing activities in the six months ended 29 February 2000 arose<br />
mainly due to equity injection from SPH.<br />
Capital Resources<br />
Our parent company provided the majority of our capital resources prior to the Invitation. As at 29<br />
February 2000, we received a total of $10.00 million from SPH in the form of equity injection. We did<br />
not have any external borrowings or indebtedness apart from trade payables as at 29 February<br />
2000. Prior to 29 February 2000, we received cash advances from SPH as follows:-<br />
41<br />
Proforma Company<br />
As at As at<br />
As at 31 August 30 November 29 February<br />
($’000) 1997 1998 1999 1999 2000<br />
Amount due from (to) holding company (6,373) (5,909) (7,830) (7,345) 579<br />
Amount due to other related company — — — — (24)<br />
(6,373) (5,909) (7,830) (7,345) 555