inter roller fa final

Letter to ShareholdersDear Shareholders,I am pleased to report that we had anothersuccessful year. The Group had outstandingresults for the year ended 31 December2004 with record turnover and profit after tax.The turnover at $69.9 million was 32% higherthan the turnover of $52.9 million for theprevious year. Net profit after tax rose 56%from $6.6 million in 2003 to $10.3 millionin 2004.Increasing Shareholder ValueThe good performance enhanced shareholdervalue. Earnings per share rose from 9.1 centsin 2003 to 13.6 cents in 2004. The return onequity for 2004 was 27.5% compared with20.1% for the previous year. Net tangibleassets per share rose from 44 cents in 2003 to48.7 cents in 2004. Market capitalization of thecompany increased from $14 Million at theend of 2002 to $52 Million at the end of 2003and to $58.9 Million at the end of 2004. As atthe date of this letter, it is $108.6 Million.The liquidity of our shares continued toimprove due to good performance andincreased coverage of our stock by analystsand journalists. Based on recommendation byour management and feedback from ourinvestor-shareholders we have applied tomove our listing from Sesdaq to the MainBoard of the SGX. This should contributeto further improvement of the liquidity ofour shares.DividendsIn view of the improved results this year,Directors have proposed a final gross dividendof 25% or 5 cents per share lesstax (2003: 20% or 4 cents per share taxexempt) to be paid on the enlarged sharecapital of the Company. During the year, theCompany paid an interim dividend of 10%or 2 cents per share tax exempt (2003: 5% or1 cent per share tax exempt). This would bringtotal gross dividends for the year to 35% or7 cents per share compared with 25% or5 cents per share paid for the previous year.Rights IssueIn November 2004, we announced a rightsissue, on the basis of 1 rights share for every2 shares. As directors were confident thatthe Group would continue to achieve a goodreturn on the enlarged capital, it wasattractively priced at 36 cents per shareto reward shareholders. In view of theirconfidence in the performance of thecompany, directors also gave an undertakingto subscribe for any shortfall. While therewas a small shortfall of 500,000 rights shares,total application for excess shares amountedto 27.5 million. As a result, no additionalshares other than their rights entitlement wereallocated to any director. The net proceedsof the rights issue of $13.6 Million werereceived on 28 January 2005.Management and BoardPlans announced in our 2003 annual reportfor management succession took placesmoothly with support from all levels. On1 January 2005, Mr. Lim Yee Min succeededMr. Yap Lem as Chief Executive Officer ofthe Company. Mr. Lim Yee Min has served the06 inter-roller engineering limited annual report2004