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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
Company for 23 years. Directors are confidentthat the team led by Yee Min will take theGroup to new heights.The Group has benefited from Mr. Yap’sleadership and foresight. He remains in theteam as Executive Director assisting inbusiness strategies. Mr. Yap was alsoappointed Deputy Chairman of the Board witheffect from 1 March 2005.The Group continuously searches for talentedindividuals to further strengthen the team.Mr. John Lim Hwee Chiang, joined our Boardof Directors as an Independent Directoron 9 November 2004. Mr. Lim has over 20years of experience in engineering and realestate with extensive international businessexperience. Ms Amy Lew joined us as GeneralManager and takes charge of Finance andCorporate matters.We were saddened by the loss of one of ourfounding members, Mr. Chan Chin Wah whopassed away on 27 April 2004. Mr. Chan wasa Non-Executive and Independent Director onthe Board since 1980. He also served as amember of the Audit Committee and theNomination and Remuneration Committee. Hehad contributed significantly in formulating andsetting the strategies, policies and values ofInter-Roller.Looking ForwardThe medium term demand for Airport LogisticsSystems is expected to remain strong. This isdue to the need to continuously upgrade andexpand airport facilities and the need for newairports. The growth of the budget airlinebusiness is expected to contribute to thisincrease in overall air passenger traffic.For the longer term I think the future dependson our culture and our people. Our peoplework well as a team and many share a senseof ownership. Our team is challenged by theexcitement of doing business in new marketsand our engineers go the extra mile to developsolutions for the complex and exacting needsof our customers. These experiences helpthem address “memes” that influence ourminds and help them “reboot”, and think out ofthe box. In other words our people arecontinuously learning, adapting to changesand applying their knowledge for the benefit ofour customers.The pool of shareholders who regard themselvesas owner-shareholders continue togrow and this should help us build a companywith a long term future. They have contributedto the success of our rights issue.The good performance of the Group in 2003and 2004 was achieved while maintaininga low debt equity ratio. The enlarged capitalhas further strengthened our balance sheet.Working closely with our bankers, the lowgearing will allow us to seize opportunitiesfor growth in the future.On behalf of the Board of Directors, I wouldlike to thank you for being our shareholder.Do attend our AGM if you can and give us yourfeedback, advice and comments.Lim Yong WahChairman8 March 2005We have a good track record, strongengineering capability and international projectmanagement experience. Barring unforeseencircumstances, Directors believe that thecompany will achieve higher turnover andprofit after tax in 2005.inter-roller engineering limited annual report2004 07
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