Asiaone 1-42

ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Operating Expenses. Operating expenses increased marginally by 2.8% from $1.38 million, or 42.3%
of revenue in FY1997 to $1.42 million, or 33.9% of revenue in FY1998. This increase was due
mainly to marginal increases in cost relating to advertising and promotion, communication line and
software and hardware maintenance.
Profit (Loss) Before Tax. We made a profit before tax of $0.71 million in FY1998 compared to a loss
of $0.73 million in FY1997 as a result of the improvement in our revenue together with a reduction
in our cost of revenue in FY1998.
Income Tax Expenses. There was no income tax charge as we were operating at a tax loss position.
LIQUIDITY AND CAPITAL RESOURCES
As we commenced our activities as the Multimedia division of SPH, we had been dependent on
SPH to provide the financing for our operations. As at 29 February 2000, we received a total of
$10.00 million from SPH in the form of equity injection. In addition, we received, through SPH,
grants totalling approximately $2.49 million from the Economic Development Board of Singapore and
the National Computer Board since 1997.
Other than the normal trade related credit given and received by us, we have no other loans or
indebtedness. As at 29 February 2000, we had cash and cash equivalents of $3.53 million.
Liquidity
Net cash used in operating activities was $1.25 million and $1.59 million in FY1999 and the six
months ended 29 February 2000 respectively.
Our net cash used in investing activities in FY1999 and the six months ended 29 February 2000
were primarily attributable to the amount paid for computers and office equipment transferred from
SPH and additional computer equipment purchased.
We anticipate that we may acquire or make investments in our related business, product and
technologies or establish joint ventures or strategic partnerships that we believe will complement our
current and future businesses. Some of these acquisitions or investments could be material. Save
as disclosed in this Prospectus, we have no specific agreements or understandings with respect to
any material acquisitions or investments at this time.
Our net cash generated from financing activities in the six months ended 29 February 2000 arose
mainly due to equity injection from SPH.
Capital Resources
Our parent company provided the majority of our capital resources prior to the Invitation. As at 29
February 2000, we received a total of $10.00 million from SPH in the form of equity injection. We did
not have any external borrowings or indebtedness apart from trade payables as at 29 February
2000. Prior to 29 February 2000, we received cash advances from SPH as follows:-
41
Proforma Company
As at As at
As at 31 August 30 November 29 February
($’000) 1997 1998 1999 1999 2000
Amount due from (to) holding company (6,373) (5,909) (7,830) (7,345) 579
Amount due to other related company — — — — (24)
(6,373) (5,909) (7,830) (7,345) 555