O TTO M ARINE L IMITED - Microsoft Internet Explorer - SGX

Liquidity and Capital Resources
Our historical sources of funds have primarily been cash generated by operating activities (including
downpayments from customers), borrowings from financial institutions and capital contributions from our
Controlling Shareholder. Our historical uses of funds have principally been to the financing of working capital
requirements, acquisition of property, plant and equipment and the repayment of borrowings.
The following table sets forth a summary of our statement of cash flows for the periods indicated.
Financial Years Ended 31 December Five Months Ended 31 May
2005 2006 2007 2007 2007 2008
S$ S$ S$ US$ S$ S$
(Unaudited)
(In thousands)
(Unaudited) (Unaudited)
Net cash (used in) from operating
activities .................... (12,460) 43,067 71,865 52,842 89,361 (43,281)
Net cash used in investing activities . . (8,320) (7,938) (76,862) (56,517) (10,136) (16,782)
Net cash from financing activities . . .
Net increase (decrease) in cash and
21,848 21,902 165,457 121,660 12,100 14,671
cash equivalents. ..............
Cash and cash equivalents at
1,068 57,031 160,460 117,985 91,325 (45,392)
beginning of period ............
Effects of exchange rate changes on
the balance of cash held in foreign
(4,643) (3,575) 53,456 39,306 53,456 213,904
currencies ...................
Cash and cash equivalents at end of
— — (12) (9) 1 (7,247)
period. ..................... (3,575) 53,456 213,904 157,282 144,782 161,265
Net Cash (Used in) from Operating Activities
Our net cash provided by and used in our operating activities includes funds generated from our operating
activities and net cash inflows or outflows from changes in our operating assets and liabilities which comprise
our working capital.
In FY2005, our net cash used in operating activities amounted to S$12.5 million consisting of operating
cashflow before working capital changes of S$4.4 million and net outflows from working capital changes of
S$16.9 million.
Cash outflows from changes in working capital of S$16.9 million were primarily due to increases in trade
receivables of S$15.7 million, other receivables of S$5.2 million and inventories of S$7.7 million. The
increases in trade receivables and inventories were attributable to an increase in revenues and the number of
vessels constructed over the year. The increase in other receivables was due to an increase in prepayments and
deposits made to suppliers attributable to the increase in the number of vessels constructed. These amounts
were partially offset by a decrease in construction work-in-progress of S$1.3 million, an increase in trade
payables of S$7.8 million and an increase in other payables of S$2.5 million. The decrease in construction
work-in-progress was due to the higher progress billings received in excess of revenue recognised while the
increase in trade payables and other payables are in line with the increases in the number of vessels
constructed.
In FY2006, our net cash from operating activities amounted to S$43.1 million consisting of operating
cashflow before working capital changes of S$17.3 million and net inflows from working capital changes of
S$25.6 million, income tax paid of S$57,000 and interest received of S$0.2 million.
Cash inflows from changes in working capital of S$25.6 million were primarily due to decreases in trade
receivables of S$16.2 million and construction work-in-progress of S$6.6 million, and increases in trade
payables of S$19.0 million and other payables of S$2.4 million. These were offset by increases in other
receivables of S$14.1 million and inventories of S$4.4 million. The decrease in trade receivables was due to
the receipt of balance payments due to us upon the delivery of vessels. The decrease in construction
work-in-progress was due to the higher progress billings received in excess of revenue recognised. The
increase in trade payables was in line with the increase in the number of vessels constructed. The increase in
other receivables was due to an increase in prepayments and deposits made to suppliers attributable to the
increase in the number of vessels constructed. The increase in inventories was attributable to an increase in the
number of vessels constructed over the year.
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