Serial Multivision Pte Ltd (continued)
Grand Park Orchard which is scheduled to open in July 2010, is the flagship hotel of Park Hotel Group, a fast growing hospitality chain in the Asia Pacific region.
The Group, through this mutually beneficial relationship, looks forward to establishing a long-term business relationship with Park Hotel Group.
Share Capital
On 5 June 2009, pursuant to a renounceable non-underwritten rights issue approved by shareholders of the Company in an extraordinary general meeting on 22 April 2009, 120,685,480 ordinary shares were issued for cash at an issue price of $0.055 per rights share on the basis of one new ordinary share for every five existing ordinary shares held as at the books closure date on 8 May 2009. The net proceeds of about $6.3 million from the rights issue was mainly utilised to repay bank borrowings of the Group.
During the year, 10,580 Warrant W090206 were exercised into 10,580 new ordinary shares. The remaining unexercised 85,523,745 Warrant W090206 lapsed on the expiry date on 6 February 2009.
As at the end of FY2009, the total number of issued and fully paid ordinary shares was 724,112,883.
Subsequent to FY2009, 2,500 Warrant W101220 were exercised into 2,500 ordinary shares. 100,564,337 Warrant W101220 remain outstanding after this exercise.
Internal Audit
For an even more comprehensive assessment of the overall effectiveness of the Group’s control system, the Audit Committee holds the view that the internal audit function should continue to be outsourced. In FY2009, Lee Seng Chan & Co was engaged to do an internal audit review of the controls on revenue, receivables and collections cycle, procurement, expenditure and payments cycle and cash management of Serial Microelectronics Inc., a 82.5% owned Taiwan subsidiary of the Group.
Geographical Balance
North Asia continues to be the single most important region. For the year under review, about 78% of the Group’s assets are in North Asia and turnover from this region accounted for about 89% of the Group’s total turnover.
Dividend
A one-tier tax-exempt final dividend of 0.25 cent per ordinary share were paid on 22 May 2009 in respect of the FY2008.
On 7 September 2009, the Company paid a one-tier tax-exempt interim dividend of 0.13 cent per ordinary share for FY2009.
The Board recommends a one-tier tax-exempt final dividend of 0.38 cent per ordinary share in respect of FY2009. The final dividend, if approved will be paid on 18 May 2010.
Outlook
The Group has performed well in FY2009 amidst the financial and economic crisis. There are encouraging indicators that the worst of the recession is over and the global economy has turned around with major economies showing early signs of recovery.
While the Group is more confident of the business outlook in FY2010 than FY2009, it expects the markets it operates to remain challenging. Negative impacts of a continued fragile consumer demand in the United States of America and Europe, outcome of the Euro debt crisis and early withdrawal of stimulus packages and tightening of monetary policies by governments of major economies of the world will weigh on the performance of the Group’s semiconductors/components distribution business.
The Group will continue to work closely with its suppliers and customers to expand into the North Asian market, especially emerging economies like China and India. Efforts will be focused on efficient and effective management of costs, inventories, customers’ credit risk and cash flows in response to a volatile operating environment.
Resignation of Executive Director
Mr Chin Yeow Hon, our Executive Director and Acting Chief Operating Officer resigned on 31 March 2009 to pursue other career opportunities.
Mr Chin joined the Company as an Applications Engineer in July 1992. He was appointed an Executive Director on 20 October 1999 and Group Senior Vice President in July 2000. In February 2001, Mr Chin took on the role of Acting Chief Operating Officer of the Company.
On behalf of the Group, I would like to record our appreciation to Mr Chin for his past services and contribution.
Appointment of Non-Executive Director
Mr Peter Ho I Chin joined the Company as a Non-Executive Director on 17 August 2009. With his extensive experience in the semiconductor and technology field, having held senior level position in various multinational corporations, I am confident he will be able to bring value to the long-term growth and profitability of the Group.
Appreciation
I would like to express my sincere thanks to my fellow Directors for their invaluable guidance and support and to team members at all levels of the Group for their dedication, drive, and support.
I would also like to extend my appreciation to customers, bankers, suppliers, business partners, and shareholders for their faith and continued support.
With your continued support, we look forward to another rewarding year.
Dr Derek Goh Bak Heng
March 2010
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