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PATIMAS COMPUTERS BERHAD Condensed Consolidated Income Statements (Unaudited) For The Period Ended 31 December 2005 INDIVIDUAL PERIOD CURRENT PRECEDING YEAR YEAR CORRESPONDING QUARTER QUARTER 31-Dec-05 31-Dec-04 RM ' 000 RM ' 000 Revenue 81,584 129,047 Operating expenses (91,454) (125,102) Other operating income 387 142 Profit from operations (9,483) 4,087 Finance costs (1,077) (1,111) Investing results (0) - Share of results of associate* - - Profit before tax (10,560) 2,976 Income tax 1,193 (376) Profit after tax (9,367) 2,600 Minority interest 724 (370) Net profit for the period (8,643) 2,230 Earnings / (Loss) per share (sen) - Basic (15.13) 2.33 - Diluted - - * As at 31 December 2005, Sigma AIT Sdn Bhd has not commenced its operations. Accordingly, the associate has post-acquisition results to be equity accounted for the 12 months ended 31 December 2005. (The Condensed Consolidated Income Statements should be read in conjunction with the Annual Audited Statements for the year ended 31 December 2004) CUMULATIVE PERIOD CURRENT PRECEDING YEAR YEAR CORRESPONDING TO DATE PERIOD 31-Dec-05 31-Dec-04 RM ' 000 RM ' 000 324,282 493,795 (334,635) (476,245) 845 598 (9,508) 18,148 (4,122) (3,585) (3,042) - - - (16,672) 14,563 (867) (2,974) (17,539) 11,589 2,371 (1,727) (15,168) 9,862 (29.36) 10.83 - - s operations. Accordingly, the associate has no material d 31 December 2005. d in conjunction with the Annual Audited Financial PATIMAS COMPUTERS BERHAD Condensed Consolidated Balance Sheets (Unaudited) As At 31 December 2005 UNAUDITED AUDITED AS AT AS AT END OF PRECEDING CURRENT FINANCIAL QUARTER YEAR ENDED 31 Dec 05 31 Dec 04 RM '000 RM '000 Property, plant and equipment 82,748 92,678 Investment in an associate 490 490 Other investments 2,442 2,442 Intangible assets 53,273 57,279 138,953 152,889 Current Assets Inventories 10,609 29,203 Trade receivables 91,970 145,140 Other receivables 27,806 10,837 Amount owing by associated company 23 - Deposits with licensed banks - 11,889 Cash and bank balances 11,566 6,137 141,974 203,206 Current Liabilities Trade payables 32,126 70,582 Other payables 3,842 6,156 Short term borrowings 91,045 95,135 Provision for taxation 914 1,176 127,927 173,049 Net Current Assets 14,047 30,157 153,000 183,046 Share capital 62,371 62,085 Reserves 19,920 43,666 ICULS 50,991 52,079 Shareholders' Funds 133,282 157,830 Minority interests 13,779 17,315 Long term borrowings 3,263 4,803 Deferred taxation 2,676 3,098 153,000 183,046 Net assets per share (RM) Basic: Based on 62,370,805 (2004: 62,084,505) ordinary shares 2.36 2.82 Fully Diluted: Based on 75,789,578 (2004: 75,789,578) ordinary shares upon full conversion of ICULS @ RM 3.80 1.94 2.31 (The Condensed Consolidated Balance Sheets should be read in conjunction with the Annual Audited Financial Statements for the year ended 31 December 2004) PATIMAS COMPUTERS BERHAD Condensed Consolidated Statements of Changes in Equity (Unaudited) For The Period Ended 31 December 2005 -------------------------------- Non Distributable ------------------------------ Share ICULS Share Reserve on Revaluation Group Capital premium Consolidation reserve RM'000 RM'000 RM'000 RM'000 RM'000 At 1 January 2004 61,198 55,447 3,542 7,589 700 Issue of share capital arising from conversion of ICULS 887 (3,368) 2,481 Disposal of a subsidiary Net profit for the period ICULS interest Dividends paid for financial year 2003 -Final At 31 December 2004 62,085 52,079 6,023 7,589 700 At 1 January 2005 62,085 52,079 6,023 7,589 700 Issue of share capital arising from conversion of ICULS 286 (1,088) 802 Disposal of subsidiaries (946) Increase in investment in a subsidiary 9 Net profit for the period ICULS interest Dividends paid for financial year 2004 -Final Dividends paid for financial year 2005 -Interim Transfer of reserves (700) At 31 December 2005 62,371 50,991 6,825 6,652 - (The Condensed Consolidated Statement of Changes in Equity should be read in conjunction with the Ann Statements for the year ended 31 December 2004) butable ------------------------------ Distributable Foreign Retained exchange profits Total reserve RM'000 RM'000 RM'000 (136) 24,880 153,220 - 136 136 9,862 9,862 (3,154) (3,154) (2,234) (2,234) - 29,354 157,830 - 29,354 157,830 - (946) 9 (15,168) (15,168) (3,095) (3,095) (2,238) (2,238) (3,110) (3,110) 700 - - 6,443 133,282 in conjunction with the Annual Audited Financial PATIMAS COMPUTERS BERHAD Condensed Consolidated Cash Flow Statement (Unaudited) For The Period Ended 31 December 2005 12 months ended 31 December 05 RM’000 CASH FLOWS FROM OPERATING ACTIVITIES (Loss)/Profit before tax (16,672) Adjustments for non-cash flow:- Non-cash items 20,219 Non-operating items - financing 4,122 Non-operating items - investing (496) Operating profit before working capital changes 7,173 Changes in working capital Net changes in current assets 14,198 Net changes in current liabilities (11,687) Cash generated from/(used in) operations 9,684 Tax paid net refunds (1,116) Net cash generated from/(used in) operating activities 8,568 INVESTING ACTIVITIES Increase of investment in subsidiary company (100) Disposal of subsidiary companies 960 Other investments (2,891) Net cash used in investing activities (2,031) FINANCING ACTIVITIES Borrowings 12,948 ICULS interest (3,111) Interest paid (4,125) Dividends paid (5,626) Net cash generated from financing activities 86 Net change in cash and cash equivalents 6,623 Cash and cash equivalents at 1 January (716) Foreign exchange differences on opening balances - Cash and cash equivalents at 31 December 5,907 Cash and cash equivalents comprise the following: Cash and bank balances 11,566 Deposits with licensed banks - Less: Deposits pledged with licensed banks - - Bank overdrafts (5,659) Cash and cash equivalents 5,907 The net assets of the disposed subsidiaries are as follows: Property, plant and equipment 704 Inventories 4,026 Trade and other receivables 34,740 Cash and bank balances 3,135 Trade and other payables (29,064) Borrowings (6,934) Deferred tax (4) Net assets/(liabilities) disposed 6,603 Minority interest (1,425) Transfer from foreign exchange reserve - Reserve on consolidation (946) Attributable unamortised goodwill 2,260 6,492 Loss on disposal to the Group (2,397) Disposal proceeds 4,095 Cash and cash equivalents of subsidiary disposed (3,135) Net cash inflow/(outflow) of the Group 960 (The Condensed Consolidated Cash Flow Statement should be read in conjunction with the Annual Audited Financial Statements for the year ended 31 December 2004) 12 months ended 31 December 04 RM’000 14,563 17,262 3,585 (129) 35,281 (36,133) (1,893) (2,745) (6,232) (8,977) (1,810) (57) (6,120) (7,987) 28,045 (3,236) (4,961) (2,234) 17,614 650 (1,366) - (716) 6,137 11,889 (739) 11,150 (18,003) (716) 1 - 30 68 (129) - - (30) (47) 136 - 20 79 (68) 11 (68) (57) unction with the Annual PATIMAS COMPUTERS BERHAD EXPLANATORY NOTES TO THE INTERIM FINANCIAL REPORT - MASB 26 A1. ACCOUNTING POLICIES The interim financial statements are unaudited and have been prepared in compliance with the requirements of MA 'Interim Financial Reporting' and paragraph 9.22 of the Listing Requirements of the Bursa Malaysia Securities Berhad. The interim financial statements should be read in conjunction with the audited financial statements of the Group for th ended 31 December 2004. The accounting policies and methods of computation adopted in the interim financial state are consistent with those adopted in the audited financial statements of the Group for the financial year ended 31 Dec 2004. A2. AUDIT REPORT OF PRECEDING ANNUAL FINANCIAL STATEMENTS There were no qualifications on the audit report of the preceding annual financial statements. A3. SEASONALITY OR CYCLICALITY INTERIM OPERATIONS The Group's interim operations are not affected by seasonal or cyclical factors. A4. UNUSUAL ITEMS During the interim period under review, there were no items or events that arose, which affected assets, liabilities, equ income or cash flows, that are unusual by reason of their nature, size or incidence. A5. CHANGES IN ACCOUNTING ESTIMATES During the period under review, there were no material changes in estimates of amounts reported in prior financial year A6. ISSUANCE OR REPAYMENTS OF DEBTS AND EQUITY SECURITIES There were no issuance, cancellation, repurchase, resale and repayment of debts and equity securities for the current financial report under review save for the following: Issued and paid-up ordinary shares of RM1.00 each :- Share Capital As at 1 January 2005 New shares issued pursuant to the conversion of ICULS As at 31 December 2005 ICULS As at 1 January 2005 Amount converted into new ordinary shares As at 31 December 2005 A7. DIVIDEND PAID A final dividend of 5 sen per share less 28% income tax in respect of the financial year ended 31 December 2004 an exempt interim dividend of 5 sen in respect of the financial year ending 31 December 2005 was paid on 7 July 2005 September 2005 respectively. A8. SEGMENTAL REPORTING The Group is principally engaged in the development and sale of computer related products and provision of computer related services that is predominantly carried out in Malaysia. Accordingly, information by business and geographical segments on the Group's operations is not presented. A9. VALUATION OF PROPERTY, PLANT AND EQUIPMENT The valuations of property, plant and equipment have been brought forward, without amendment from the audited fin statements for the year ended 31 December 2004. A10. SUBSEQUENT MATERIAL EVENTS As at the date of this report there were no material events which arose subsequent to the end of the period under revie A11. CHANGES IN THE COMPOSITION OF THE GROUP Save as set out below, there were no changes in the composition of the Group during the financial period under review The disposal of 2,610,000 ordinary shares of RM1.00 each in Tsun Macro Sdn Bhd by GMH Services (MSC) Sdn wholly-owned subsidiary of the Company which was completed on 3 June 2005. Tsun Macro Sdn Bhd has therefore c to be a subsidiary of the Company. The disposal of 430,000 ordinary shares of RM1.00 each in Total Communications Sdn Bhd by Cordoda Corporatio Bhd, a subsidiary of the Company which was completed on 4 August 2005. Total Communications Sdn Bhd has the ceased to be a subsidiary of the Company. The acquisition of the remaining 100,000 ordinary shares of RM1.00 each in SSD Technology Sdn Bhd not held by P was completed on 16 August 2005. SSD Technology Sdn Bhd has therefore become a wholly-owned subsidiary Company. The internal restructuring involving the transfer of the entire shareholding in HPD Systems Sdn Bhd and DGN System Bhd from GMH Services (MSC) Sdn Bhd (a wholly-owned subsidiary of Patimas) to Patimas was completed on 1 Sep 2005 whilst the transfer of the entire shareholding in EIX Solutions Sdn Bhd from m-BX Systems Sdn Bhd (a wholly- subsidiary of Patimas) to Patimas was completed on 26 September 2005. Following the completion of the in restructuring, HPD Systems Sdn Bhd, DGN Systems Sdn Bhd and EIX Solutions Sdn Bhd are direct wholly-o subsidiaries of the Company. A12. CHANGES IN CONTINGENT LIABILITIES AND CONTINGENT ASSETS The contingent liabilities arising from unsecured corporate guarantees given to licensed banks for bank credit fa granted to subsidiaries decreased from RM89.9 million as at 31 December 2004 to RM89.4 million as at 31 December B BURSA MALAYSIA LISTING REQUIREMENTS B1. REVIEW OF THE GROUP'S PERFORMANCE Revenue was RM81.6 million for the fourth quarter and RM324 million for the financial year. The revenue decreased b and 34% compared to the preceding year mainly due to the disposal of two subsidiaries during the year. The Loss from operations for financial year 2005 was RM9.5 million after deducting depreciation and amortization c RM15.7 million. Loss Before Tax was RM10.6 million for the fourth quarter and RM16.7 million for the financial year compared to Before Tax of RM2.9 million and RM14.6 million in the preceding year. The Loss Before Tax for the quarter under revie the financial year was mainly due to lower margins, higher finance cost and disposal of subsidiaries. B2. COMPARISON WITH PRECEDING QUARTER'S RESULTS For the Fourth Quarter of 2005, the Group 's revenue was RM81.6 million compared to RM59.9 million in the 3rd Q 2005, representing an increase of 36%, as a result of adopting more aggresive sales and marketing strategies to reta expand its customer base. The Loss Before Tax for the fourth quarter was RM10.6 million compared to a Loss Before RM6.9 million in the preceding quarter mainly due to lower margins arising from the sales and marketing strategie competitive market conditions. B3. PROSPECTS The Group is optimistic of the prospects in the year ahead and anticipates better financial results in 2006. The currently has a healthy revenue backlog and strong sales pipeline. The upcoming 9th Malaysia Plan will provide the do ICT market with increased business opportunities. The Group also expects its earlier investment of resources in regional ICT marketplace to begin yielding results in 2006. The Group has participated in a number of tenders optimistic of its chances. In addition, the Group has put in place strategies to increase its margins in the upcoming fi year. The Group is currently exploring the possibility of unlocking the value of its assets through the disposal of its unencum property located at Technology Park Malaysia which it had acquired in 1998. This is envisaged to realise a significant gain to the Group. When the disposal of the property materializes, it would also provide surplus funds for the G business expansion and result in further enhancement of shareholders' value. Barring unforeseen circumstances, the anticipates positive financial performance in 2006. B4. PROFIT FORECAST AND GUARANTEE Not applicable. B5. TAXATION Current year quarter RM' 000 Current taxation comprises : - - Malaysia 350 - Overprovision in respect of previous years (1,211) (861) Transfer to deferred taxation (332) (1,193) The effective tax rate is higher than the statutory tax rate of 28% principally due to the losses of certain subsidiaries wh cannot be set off against taxable profits made by other subsidiaries and certain expenses which are not deductible for t purposes. B6. SALE OF UNQUOTED INVESTMENTS AND PROPERTIES Current year quarter RM' 000 Loss on disposal of land and building 0 B7. PURCHASE OR DISPOSAL OF QUOTED SECURITIES There were no quoted securities disposed or held by the Group at the end of the period under review. B8. STATUS OF CORPORATE PROPOSALS There are no corporate proposals announced but not completed as at 24 February 2006, the latest practicable date wh not earlier than 7 days from the date of issue of this quarterly report. The Company, on 14 December 2005 announced that it was proposing to seek from the shareholders the autho purchase up to 10% of the Company's issued and paid up share capital ("Proposed Share Buy-Back"). The approva shareholders on the Proposed Share Buy-Back was obtained at an Extraordinary General Meeting held on 17 Ja 2006.The said authorisation will, in accordance with Chapter 12 of the Listing Requirements of Bursa Malaysia Sec Berhad lapse at the conclusion of the forthcoming Annual General Meeting unless it is renewed. B9. GROUP BORROWINGS AND DEBT SECURITIES Short term borrowings: Secured Long term borrowings: Secured All the above are denominated in Ringgit Malaysia. B10. OFF BALANCE SHEET FINANCIAL INSTRUMENTS As at 24 February 2006, there were no off balance sheet financial instruments held by the Group. B11. MATERIAL LITIGATION The Group was not engaged in any material litigation that will materially affect the Group. B12. DIVIDEND The Directors have recommended a final tax exempt dividend payment of 3 sen per share for the financial year end December 2005. (Financial year 2004: 5 sen per share less 28% income tax). The date of the entitlement and paym dividend have not yet been determined as at the date of this interim financial report. B13. EARNINGS PER SHARE The basic earnings per share was calculated by dividing the net profit attributable to members of the Company a weighted average number of ordinary shares in issue during the period under review:- Basic Current year quarter RM' 000 Net loss for the year (8,643) ICULS interest (768) Net loss attributable to ordinary shareholders (9,411) Weighted average number of ordinary shares in issue ('000) 62,202 Basic loss per ordinary share (sen) (15.13) There is no dilution in the Company's earnings per share as the market values of the securities were lower than the e prices. B14. OTHER RECEIVABLES Included in other receivables are tax recoverable amounting to RM5.73 million and an amount of RM17.08 million ow Tsun Macro Sdn Bhd consisting of advances granted prior to its disposal by the Company and payments on beh guarantor. Of the total tax recoverable, RM3.82 million relates to tax credits and tax instalments paid in excess provision for Year of Assessment 2005 as at 31 December 2005. The amount owed by Tsun Macro Sdn Bhd is secu personal guarantee from 2 shareholders of Tsun Macro Sdn Bhd and would be repaid over a period of five years bea interest of 6% p.a. B15. OPERATING EXPENSES Included in Operating expenses are :- Current year quarter RM' 000 a) Depreciation expenses 3,125 b) Amortisation of software development expenditure 373 c) Amortisation of intangible assets 19 with the requirements of MASB 26, Malaysia Securities Berhad. tatements of the Group for the year d in the interim financial statements financial year ended 31 December ffected assets, liabilities, equity, net eported in prior financial years. uity securities for the current interim RM'000 62,085 286 62,371 52,079 (1,088) 50,991 nded 31 December 2004 and a tax 05 was paid on 7 July 2005 and 12 ts and provision of computer business and geographical endment from the audited financial end of the period under review. financial period under review: GMH Services (MSC) Sdn Bhd, a acro Sdn Bhd has therefore ceased Bhd by Cordoda Corporation Sdn munications Sdn Bhd has therefore ology Sdn Bhd not held by Patimas a wholly-owned subsidiary of the s Sdn Bhd and DGN Systems Sdn mas was completed on 1 September Systems Sdn Bhd (a wholly-owned ng the completion of the internal Sdn Bhd are direct wholly-owned ed banks for bank credit facilities 4 million as at 31 December 2005. ar. The revenue decreased by 37% uring the year. reciation and amortization costs of financial year compared to Profit ax for the quarter under review and bsidiaries. RM59.9 million in the 3rd Quarter d marketing strategies to retain and n compared to a Loss Before Tax of ales and marketing strategies and ancial results in 2006. The Group aysia Plan will provide the domestic investment of resources into the ed in a number of tenders and is s margins in the upcoming financial h the disposal of its unencumbered saged to realise a significant capital ide surplus funds for the Group's foreseen circumstances, the Group Current year to date RM' 000 2,625 (1,340) 1,285 (418) 867 es of certain subsidiaries which which are not deductible for tax Current year to date RM' 000 111 he latest practicable date which is the shareholders the authority to re Buy-Back"). The approval of the neral Meeting held on 17 January ments of Bursa Malaysia Securities newed. As At 31-Dec-05 RM'000 91,045 3,263 94,308 Group. are for the financial year ended 31 of the entitlement and payment of members of the Company and the Current year to date RM' 000 (15,168) (3,095) (18,263) 62,202 (29.36) urities were lower than the exercise mount of RM17.08 million owed by mpany and payments on behalf as instalments paid in excess of tax Tsun Macro Sdn Bhd is secured by er a period of five years bearing an Current year to date RM' 000 13,957 1,672 75
"KLSEQuarter4_2005 revised -1"