Financial Information

Income Statement

The Group recorded S$4.8 million in revenue for FY2011 as compared with S$4.5 million for FY2010. The revenue is by and large contributed by our facility management business, which is operated through its wholly owned subsidiary, Raintree Cove Pte Ltd. Additional income was generated from rental of a commercial property at Ang Mo Kio Central which was acquired in the ordinary course of business by a fully owned subsidiary, Top Global Properties Pte Ltd in July this year. Both companies expect to continue delivering profits and positive cash flows to the Group in 2012. However, the current lease for Raintree Cove Pte Ltd shall expire in August 2012. Application for renewal has been made for period September 2012 to August 2015.

The Group recorded a gross profit of S$3.2 million for the full year in FY2011 against a gross loss of S$1.0 million for FY2010. This is contributed by our facility management and rental businesses while no additional provisions are required to cover doubtful debts and warranties related to the legacy businesses which ceased operations. In FY 2010, the Group has recorded provision of doubtful debts and warranties of S$1.7 million and S$1.8 million respectively.

The net profit attributable to the Group's equity holders came to S$16.4 million for the full year in FY2011. In 2010, the Group posted a net loss attributable to equity holders of S$7.5 million. Attributions to the profit include S$20 million profit from fair valuation of land on Capitol site development in accordance with FRS 40, Investment Property. This is mainly offset by S$1.8 million of valuation of staff share option and S$1.5 million of staff costs included in the administrative expense against prior year.

Balance Sheet

As at 31 December 2011, the Group had a healthy balance sheet with total shareholders' equity of S$117.1 million with no borrowings. Cash and cash equivalents had reduced to S$43.5 million from S$72.6 million in prior year. The difference is due to an acquisition of income generating asset, investment made in Capitol site development and other enbloc activities, partly funded by divestment of commercial bonds.

Trade and other receivables increased from S$26.6 million as at 31 December 2010 to $29.8 million as at 31 December 2011, largely attributable to the Group's $29.2 million prepayment for its share of equity contribution towards the Capitol site development.

Development properties for sale and investment property are related to the purchase of Braddell Park Project and Ang Mo Kio Central respectively.

Cash Flow

The Group's cash flow position decreased from S$72.6 million as at 31 December 2010 to S$43.6 million, mainly due to further contribution towards the Capitol site development of S$13.8 million and the purchase of Braddell Park Project of S$13.2 million.

Commentary

Over the past one year, we continue to witness tremendous changes and turmoil around us while the world economy is still tackling the aftermath of global downturn. Although economic indicators in the US pointed to moderate growth over the past year, and larger economies in the region such as Indonesia and China had shown resilience, Eurozone crisis continues to hover and cast shadow over the year ahead.

In the midst of a global economic outlook plagued by uncertainties, Singapore's economic growth in 2012 is expected to be slow with a GDP growth of between 1% to 3%. Immediate challenges in the vicinity for property market sector include the recent Additional Buyer Stamp Duty ("ABSD") on purchase of residential properties imposed on and after 8 December 2011. Many developers may face difficult times ahead despite of divided views drawn in the face of ABSD. Riding in an increasingly grim economic weather and heightened volatility, it warrants deeper excogitation on the direction we have set in all respects.

During the past two years, apart from efforts to streamline operations and shed non-core businesses, the Group attempted several strategic positioning initiatives both in Singapore and in the region. The Group endeavours in Real estate developments have seen better results so far with the award of the historic Capitol site project worth of S$750 million with expected completion in 2014, whereby its residential component is targeting to be launched in first half of this year. The Group's next development is at the Braddell site which is targeted to be launched in 2012.

As for its facility management business, the Group has included in its stream of rental revenue, income generated by a newly acquired commercial property at Ang Mo Kio Central. Meanwhile, the Master lease of Raintree Cove with SLA is expiring in August 2012 and application for renewal has been made for period September 2012 to August 2015.

Going forward, the Group will continue to seek international opportunities in the real estate sector and beyond with the core focus in China and Indonesia.