Annual Report 2005 - Leeden Limited

5ACE DYNAMICS LIMITEDFinance cost was higher due to higher bankborrowings to fi nance its robust industrialdivision. An impairment of $1.6 million forgoodwill was incurred following adoptionof FRS 103. Share of profi t in associatedcompanies amounted to $1.1 million.The higher provision for taxation is mainlycaused by impairment loss on goodwill whichis not tax deductible.INDUSTRIAL DIVISIONWelding SolutionsThe Group has been distributing weldingproducts to its customers for more than30 years. Since 2004, the Group has beenstrengthening and expanding its industrialdivision to provide welding applicationsolutions (including supply of welding andsafety products and industrial gases) andrelated services to its customers. Its widecustomers base include major oil and gas,construction and manufacturing companies,shipbuilding and ship repair yards, steel andindustrial pipeline fabricators, renownedmedical and educational institutions fromacross the Asean region. The provision ofvalue added services in a professional mannerhas earned the Group a high reputation in themarket place. Introduction of new productsand expansion of markets have the effect ofincreasing the Group’s market share.The Group has been the authorized agents forseveral international well-known brands such asMiller and OTC for welding equipments; Hobartfor filler metals; Flexovit for abrasives; etc.During the year, the Group successfullyintroduced fi ller metal for high strength steel;fi ller metal for submerged arc and exoticfi ller metals to its customers in Singapore,Malaysia and Batam. The sales of fi ller metalproducts contributed signifi cantly to theincrease in sales of the industrial division.Sales of abrasives including grinding wheelsand mounted point have doubled. In orderto further improve market share and toincrease its range of products, the Groupalso markets its own brands such as BluePower. In this connection, it is also investingin a manufacturing plant in Jiangyan, Chinato manufacture some of its products so asto ensure a constant source of supply atcompetitive prices.The welding products are handled byAmerican Dynamics Pte Ltd, Blue PowerCorporation Pte Ltd and Dynamic ADIndustries Sdn Bhd. They provide integratedservices to the oil & gas, shipbuilding &repair yards, and other major manufacturingindustries. Its performance has beenencouraging, contributing an estimated totalof $31.0 million in sales compared to $23.8million last year, an increase of 30%.ANNUAL REPORT 2005