Everyday our dreams get bigger

The adoption of FRS 102 on 1 January 2005 resulted in a positive fair value adjustment of S$0.8
million and the adoption of FRS 39, also on 1 January 2005 resulted in a negative fair value
adjustment of S$16.7 million.
Non-current assets shrank by S$10.8 million due mainly to the completion of divestment of a
50% equity stake in SingSpring and the sale of Hyflux Building. This was partially offset by
increases in investment in associate by S$11.6 million and intangible assets by S$6.5 million.
Working Capital increased by S$58.0 million from S$108.6 million to S$166.6 million. This was
due mainly to a S$35.1 million increase in cash and cash equivalents.
As a result of adopting FRS 39, fair value receivables was S$6.6 million. This was mainly derived
from unrealised gains of financial derivatives which was partially offset by fair value provision of
S$5.5 million.
Other changes in working capital were in line with the higher revenue and the larger sized projects
undertaken by the Group. Amounts due from related companies were primarily related to trade
receivables and amounts recoverable from associate companies and joint ventures. Deferred
income of S$1.6 million represented unrealised profits on sales to associates in the Group
accounts. These unrealised profits will be realised and credited to the profit and loss account
of the Group over the estimated economic useful lives of the underlying assets or when the
Group divests its equity stake in the associates.
Long-term loans decreased by S$33.9 million in FY2005, due mainly to the divestment of
SingSpring. Together with the higher cash and cash equivalents balances, the net debt to equity
ratio for the Group decreased to 0.05 in December 2005, as compared to 0.71 in December
2004. Excluding the project finance loan, the Group was in a net cash position.
(f) Cash Flows And Liquidity
The Group’s cash position strengthened to S$96.4 million, higher by S$35.1 million as compared
to a year ago.
Net cash generated from operations increased by 158% to S$18.0 million as compared to S$7.0
million last year.
Cash used for investment activities decreased by 58% to S$47.7 million. This was due mainly
to proceeds received from the sale of Hyflux Building and the sale of a 50% equity stake in
SingSpring that totalled around S$44.6 million. The overall cash used for investment activities
was partially offset by investments in associates of S$11.6 million. The S$92 million reduction
in construction in progress was due mainly to the completion of the construction of SingSpring
plant, which is now classified as property, plant and equipment.
Cash generated from financing activities totalled S$64.7 million, representing a 53% decrease
from last year. S$38.7 million was generated from the proceeds from the issuance of new shares
and S$35.1 million was generated from the drawdown of project finance loan. The overall cash
generated from financing activities was partially offset by dividend payment and repayment of
short term loans.
(g) Shareholder Returns
Return on Equity and Dividends Per Share
Return on equity maintained at about 24%, the same as FY2004, not withstanding the enlarged
share capital due to the issuance of new shares and bonus issues during the year.
For FY2005, the company is proposing a final dividend of 1.35 cents per ordinary share as
compared to 1.27 cents in FY2004.
Note: Figures for FY2004 have been restated to reflect the adoption of new and revised accounting standards.
09