Full Year Financial Statement Announcement for the Financial Year

Document Sample
Full Year Financial Statement Announcement for the Financial Year Powered By Docstoc
					                                             Company No. 198200473E

Full Year Financial Statement Announcement for the Financial Year Ended 31/12/2010 of Friven & Co
Ltd. (“Friven” or the “Company”) and its subsidiaries (collectively known as the “Group”)

This document has been prepared by the Company and its contents have been reviewed by the Company’s sponsor,
PrimePartners Corporate Finance Pte. Ltd. (the “Sponsor”) for compliance with the relevant rules of the Singapore
Exchange Securities Trading Limited (the “SGX-ST”). The Sponsor has not independently verified the contents of this
document.

This document has not been examined or approved by the SGX-ST and the SGX-ST assumes no responsibility for the
contents of this document, including the correctness of any of the statements or opinions made or reports contained in
this document.

The contact person for the Sponsor is Mr Mark Liew, Managing Director, Corporate Finance, at 20 Cecil Street, #21-02
Equity Plaza, Singapore 049705, telephone (65) 6229 8088.

PART I - INFORMATION REQUIRED FOR ANNOUNCEMENTS OF QUARTERLY (Q1, Q2 & Q3), HALF-
         YEAR AND FULL YEAR RESULTS


The Company had on 3 August 2010 completed its acquisition of China Children Fashion Holdings Pte. Ltd.
(“CCFH”) (“Acquisition”) and its subsidiaries via a reverse takeover exercise (“RTO”).

The Acquisition has been accounted for as a RTO and the legal subsidiary, CCFH, is regarded as an
acquirer for accounting purposes. As such, the consolidated financial statements have been prepared and
presented as a continuation of CCFH.

Such accounting treatment is only applied to the consolidated financial statements of the Group. At the
Company level, the investment in CCFH is accounted for as an investment, less any impairment losses in
the Company’s statement of financial position.




                                                          1
a)(i)    An income statement (for the group) together with a comparative statement for the
         corresponding period of the immediately preceding financial year.

        CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE TWELVE MONTHS
        ENDED 31 DECEMBER 2010

                                                             12 months ended
                                                       31/12/2010      31/12/2009      Change
                                                         S$'000          S$'000          %
          Revenue                                            59,402          50,150        18%
          Cost of Sales                                     (40,560)        (34,267)       18%
          Gross Profit                                       18,842          15,883        19%

          Other Income                                        1,394             366       281%
          Selling and Distribution Expenses                  (6,096)         (2,323)      162%
          General and Adminstrative Expenses                 (7,520)         (2,218)      239%
          Finance Costs                                        (695)           (293)      137%

          Profit before income tax                            5,925          11,415       -48%
          Income Tax Expense                                 (1,274)         (1,661)      -23%

          Profit for the financial year                      4,651            9,754       -52%
          Other comprehensive income
          for the financial year,
          net of tax
            Exchange loss on translating foreign
            operations                                       (1,009)         (1,258)       20%
          Total comprehensive income for the
         financial year                                      3,642            8,496       -57%

          Profit attributable to:
           Owners of the parent                              4,543            9,754
           Non-controlling interests                           108              -
                                                             4,651            9,754

          Total comprehensive income
         attributable to:
            Owners of the parent                             3,534            8,496
            Non-controlling interests                          108              -
                                                             3,642            8,496




                                                   2
1(a)(i)   An income statement (for the group) together with a comparative statement for the
          corresponding period of the immediately preceding financial year (continued).

          Profit for the financial year is arrived at after crediting/(charging) the following:-




                                                                                       Group
                                                                                 12 months Ended
                                                                               31/12/2010 31/12/2009         Change
                                                                                 S$'000      S$'000            %

          Interest income                                                                51          128        -60%
          Rental income                                                                 711          -            NM
          Gain on disposal of
                                                                                         33           -          NM
             plant and equipment
          Depreciation and amortisation                                              (2,412)       (1,814)       33%
          Foreign exchange loss, net                                                   (846)          131      -746%
          Operating lease expense                                                    (1,671)         (268)      524%
          Salaries, bonuses and allowances                                           (4,439)       (7,356)      -40%
          Contributions to defined contribution plans                                (1,646)         (251)      556%
          Share-based payments expense                                                 (439)          -           NM
          Inventory written off                                                         (12)          -           NM
          Bad debt written off                                                         (461)          -           NM
          Write back of allowance for inventory obsolescence                             43           -           NM
          Allowance for doubtful third parties trade receivables                        (26)          -           NM
          Plant and equipment written off                                               (15)          -           NM
          Interest expense                                                             (695)         (293)      137%




          NM = Not Meaningful




                                                         3
1(b)(i)    A balance sheet (for the issuer and group), together with a comparative statement as at the
           end of the immediately preceding financial year.


          CONSOLIDATED STATEMENTS OF FINANCIAL POSITION AS AT 31 DECEMBER 2010 AND
          31 DECEMBER 2009




                                                                      Group                        Company
                                                                       As at                          As at
                                                            31/12/2010       31/12/2009    31/12/2010       31/12/2009
                                                              S$'000           S$'000        S$'000           S$'000
          Capital and Reserves
          Share Capital                                          30,098           2,282        103,003           65,075
          Accumulated profits/(losses)                           14,128          10,155        (56,245)         (52,768)
          Reserves                                                9,432           8,862            -                -
          Translation reserve                                    (2,378)         (1,369)             61               61
          Equity Attributable to Owners of the Parent            51,280          19,930         46,819           12,368
          Non-Controlling Interests                                 108               -               -                -
                                                                 51,388          19,930         46,819           12,368

          Non-Current Assets
          Property, Plant and Equipment                           4,480           2,356              57              78
          Investments in Subsidiaries                               -               -           53,263          18,012
          Intangible Assets                                      10,707           7,185              28            111
          Goodwill                                               18,344           1,381            -               -
                                                                 33,531          10,922         53,348          18,201
          Current Assets
          Inventories                                            11,356           9,102            592              955
          Trade and Other Receivables                            25,049          12,473          2,578            2,425
          Income tax recoverable                                    549             -              -                -
          Cash and Cash Equivalents                               7,891           4,786            381            1,605
                                                                 44,845          26,361          3,551            4,985

          Current Liabilities
          Trade and Other Payables                               10,402           7,225          8,031            7,913
          Bank Borrowings                                        12,699           7,535            547            1,349
          Current Income Tax Payable                                -             1,249            -                -
          Finance Lease Payables                                    139               -            139              130
                                                                 23,240          16,009          8,717            9,392

          Net Current Assets/(Liabilities)                       21,605          10,352          (5,166)         (4,407)

          Non-Current Liabilities
          Finance Lease Payables                                    144             -              144             283
          Provision for Other Liabilities                            30             -              -               -
          Convertible Loan                                        1,177             -            1,177           1,101
          Deferred Tax Liabilities                                2,397           1,344              42              42
                                                                  3,748           1,344          1,363           1,426
          Net Assets                                             51,388          19,930         46,819          12,368




                                                        4
1(b)(ii)   Aggregate amount of group’s borrowings and debt securities.

           Amount repayable in one year or less, or on demand

           As at 31/12/2010                                       As at 31/12/2009



                    Secured                 Unsecured                      Secured           Unsecured
                              12,123                        576                      7,535                  -




           Amount repayable after one year

           As at 31/12/2010                                       As at 31/12/2009



                    Secured                 Unsecured                     Secured            Unsecured
                                   -                    1,177                           -                    -




           Details of any collateral

           Secured borrowings consist of trust receipts, bills payable and bank loans. The bank borrowings
           of a Malaysian subsidiary are secured by first legal charge over a leasehold land and building
           owned by the Malaysian subsidiary. The bank borrowings of a Hong Kong subsidiary are secured
           by a corporate guarantee given by the holding company to the banks of the subsidiary. The bank
           borrowings of a subsidiary in China are secured by a corporate guarantee and a pledge of certain
           property, plant and equipment provided by a related company and certain Directors of the
           subsidiary.

           One of its subsidiary in Hong Kong, Friven Eagleton was in breach of a bank covenant with one of
           its banks as at 31 December 2010 as it did not meet the required net worth stipulated in the
           banking facility letter. Due to this breach of the covenant clause, the bank is contractually entitled
           to withdraw these facilities. Verbal representation has been obtained from the bank to continue
           providing the banking facilities. As of the date of this announcement, the bank has not withdrawn
           the banking facilities granted to the subsidiary.




                                                        5
1(c)   A cash flow statement (for the group), together with a comparative statement for the
       corresponding period of the immediately preceding financial year.

       CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE TWELVE MONTHS
       ENDED 31 DECEMBER 2010

                                                                                              12 Months Ended
                                                                                       31/12/2010   31/12/2009
                                                                                          S$'000        S$'000
       Operating activities                                            Note
       Profit before income tax                                                              5,925           11,415
       Adjustments for:
       Depreciation of property,
                                                                                               638               304
       plant and equipment ("PPE")
       Gain on disposal of PPE                                                                 (33)               6
       Plant and equipment written-off                                                          15              -
       Amortisation of intangible asset                                                      1,774            1,510
       Share-based payments expense                                                            439              -
       Allowance for doubtful third parties trade receivables                                   26              -
       Write back of allowance for inventory obsolescence                                      (43)             -
       Interest expense                                                                        695              293
       Interest income                                                                         (51)            (128)
       Operating cash flows before working capital changes                                   9,385           13,400
       Changes in working capital
       Inventories                                                                           1,130           (5,060)
       Trade and other receivables                                                          (5,883)           5,116
       Trade and other payables                                                             (2,382)           3,908
       Cash generated from/(used in) operations                                              2,250           17,364

       Interest received                                                                        51              -
       Income tax paid                                                                      (3,584)          (1,681)
       Net cash used in operating activities                                                (1,283)          15,683
       Investing activities
       Acquisition of subsidiary, net of cash acquired                     a                 1,399               -
       Proceeds from disposal of PPE                                                             33               51
       Purchase of PPE                                                                        (219)             (159)
       Interest Received                                                                       -                 128
       Repayments of Shareholders                                                              -              (1,651)
       Repayments of Related Companies/Parties                                                 -              (5,972)
       Net cash generated from/(used in) investing activities                                1,213            (7,603)
       Financing activities
       Procceds from issuance of shares                                                     1,999              2,318
       Proceeds from bank borrowings                                                       11,637              3,621
       Repayment of bank borrowings                                                       (10,062)            (1,491)
       Repayment of finance lease payables                                                    (55)                 -
       Interest paid                                                                         (695)              (292)
       Dividends Paid                                                                         -               (5,599)
       Repayments of Shareholders                                                             -                 (144)
       Repayment of Related Parties                                                           -               (4,044)
       Net cash generated from/(used in) financing activities                               2,824             (5,631)

       Net change in cash and cash equivalents                                               2,754            2,449
       Cash and cash equivalents at beginning of financial year                              4,786            2,342
       Effect of foreign exchange rate changes, net                                            -                 (5)
       Cash and cash equivalents at end of financial year                  b                 7,540            4,786
       Notes to consolidated statement of cash flows
       a) Acquisition of subsidiary, net of cash acquired
       Purchase consideration :
       Fair value of issued equity of the Company                                                             25,138
       Less:                                                                         Fair Value as at acquisition date
                                                                                              S$'000
        Non-current Assets                                                                   3,376
        Current Assets                                                                      12,787
        Curent Liabilities                                                                 (10,101)
        Non-current Liabilities                                                             (2,864)
                                                                                             3,198
        Intangible Assets on acquisition                                                     4,923
        Total purchase consideration                                                         8,121
        Less: Cash and cash equivalents acquired                                            (1,399)
        Net Assets acquired                                                                                    6,722
        Goodwill on consolidation                                                                             17,017
        Cashflow on acquisition of subsidiary                                                                  1,399
       b) Cash and cash equivalents included in the consolidated statement of cash
          flows comprise the following :
                                                                                        31/12/2010        31/12/2009
                                                                                            S$'000            S$'000
            Cash and bank balances                                                           7,874             4,786
            Fixed deposits pledged                                                              17               -
            Bank overdrafts                                                                   (351)              -
                                                                                             7,540            4,786




                                                                                          6
1(d)(i)      A statement (for the issuer and group) showing either (i) all changes in equity or (ii) changes in equity other than those arising
             from capitalisation issues and distributions to shareholders, together with a comparative statement for the corresponding
             period of the immediately preceding financial year.

 GROUP                                                                      Equity attributable to owners of the parents
                                                         Share       Translation          Statutory          Capital   Accumulated               Non-Controlling    Total
                                                         Capital        Reserve            Reserve          Reserve         Profits     Total         Interests    Equity
                                                         S$'000          S$'000             S$'000           S$'000         S$'000     S$'000           S$'000     S$'000

 Balance at 1 January 2009                                   -             (111)               536           (5,981)         6,890      1,334               -       1,334
 Issuance of shares for working capital                    2,282            -                  -                -              -        2,282               -       2,282
 Deemed contribution by owners of parent                     -              -                  -             13,508            -       13,508               -      13,508
 Total comprehensive income
 for the financial year                                      -           (1,258)               -                -            9,754      8,496               -       8,496
 Profit Appropriation for Statutory Reserve                  -              -                  799              -             (799)       -                 -         -
 Dividends                                                   -              -                  -                -           (5,690)    (5,690)              -      (5,690)
 Balance at 31 December 2009                               2,282         (1,369)             1,335            7,527         10,155     19,930               -      19,930


 Balance at 1 January 2010                                 2,282         (1,369)             1,335            7,527         10,155     19,930               -      19,930
 Total comprehensive income
 for the financial year                                      -           (1,009)               -                -            4,543      3,534               108     3,642
 Profit Appropriation for Statutory Reserve                  -              -                  570              -             (570)       -                 -         -
 Issuance of shares pursuant to
 the RTO completed on 3 Aug 2010 (note 1)                 25,138            -                  -                -              -       25,138               -      25,138
 Professional fees paid in shares (note 2)                   439            -                  -                -              -          439               -         439
 Capitalisation of amounts owing to Directors (note 3)       240            -                  -                -              -          240               -         240
 Issue of shares via Private Placement (note 5)            1,999            -                  -                -              -        1,999               -       1,999
 Balance at 31 December 2010                              30,098         (2,378)             1,905            7,527         14,128     51,280               108    51,388

 COMPANY
                                                         Share     Accumulated         Share Option      Convertible
                                                         Capital        Losses             Reserve     Loan Reserve          Total
                                                         S$'000         S$'000               S$'000          S$'000         S$'000

 Balance at 1 January 2009                                62,980        (52,818)                89              -           10,251
 Total comprehensive income
 for the financial year                                      -               50                 -               -               50
 Issuance of Shares                                        2,095                                                             2,095
 Share-based payments                                        -              -                   (46)             18            (28)
 Balance at 31 December 2009                              65,075        (52,768)                 43              18         12,368

 Balance at 1 January 2010                                65,075        (52,768)                43               18         12,368
 Total comprehensive income
 for 12 months                                               -           (3,477)                -               -            (3,477)
 Issuance of shares                                        1,500            -                   -               -             1,500
 Issuance of shares pursuant to
 the RTO completed on 3 Aug 2010 (note 4)                 34,429            -                   -               -           34,429
 Issue of shares via Private Placement (note 5)            1,999            -                   -               -            1,999



 Balance at 31 December 2010                             103,003        (56,245)                43               18         46,819




                                                                                   7
           Notes:

           1) Refers to the deemed cost of acquisition incurred by CCFH, in the form of equity issued to the
              owners of the legal parent, i.e. the Company and the share capital of shares issued for
              professional fees and the management incentives in relation to the RTO. The deemed cost of
              acquisition of S$25,138,000 is determined using the fair value of the Company’s share capital
              at the date of the RTO.

           2) Refers to the market value of the professional fee shares issued to the financial advisor on 3
              August 2010. Please refer to the circular to shareholders dated 30 June 2010 for more
              information.

           3) Refers to the value of the capitalisation shares issued in settlement of amounts owing to 2
              directors and an associate of a director. Please refer to the circular to shareholders dated 30
              June 2010 for more information.

           4) On 3 August 2010, the Company issued 250,000,000 consideration shares, 2,250,000
              professional fee shares, 1,000,000 management incentive shares and 1,200,305 amounts
              owing capitalisation shares pursuant to the RTO.

           5) On 29 October 2010, the Company issued 15,384,615 consideration shares pursuant to a
              private placement which raised gross proceeds of S$1.99 million (“Placement”).


1(d)(ii)   Details of any changes in the company's share capital arising from rights issue, bonus
           issue, share buy-backs, exercise of share options or warrants, conversion of other issues
           of equity securities, issue of shares for cash or as consideration for acquisition or for any
           other purpose since the end of the previous period reported on. State also the number of
           shares that may be issued on conversion of all the outstanding convertibles, as well as the
           number of shares held as treasury shares, if any, against the total number of issued shares
           excluding treasury shares of the issuer as at the end of the current financial period
           reported on and as at the end of the corresponding period of the immediately preceding
           financial year.

                                                                             Company
                                                                  Number of shares   Share capital
                                                                                          S$’000
           As at 30 September 2010                                    440,657,330        101,004
           Placement                                                   15,384,615           1,999
           As at 31 December 2010                                     456,041,945        103,003

           9,666,667 ordinary shares may be issued on the conversion of the entire remaining convertible
           loan of S$1.16 million as at 31 December 2010 (31 December 2009: Nil).

           As at 31 December 2010, there were 1,850,000 (31 December 2009: 6,100,000 adjusted for the
           share consolidation on 3 August 2010 for comparative purposes) outstanding share options in
           respect of the unissued ordinary shares under the Friven & Co. Employee Share Options
           Scheme.

           There were no treasury shares as at 31 December 2010 and 31 December 2009.




                                                      8
1(d)(iii)   To show the total number of issued shares excluding treasury shares as at the end of the
            current financial period and as at the end of the immediately preceding year.

            As at 31 December 2010 and 31 December 2009, the total number of issued shares was
            456,041,945 and 714,828,122 (178,707,030 shares if adjusted for the share consolidation)
            respectively.


1(d)(iv)    A statement showing all sales, transfers, disposal, cancellation and/or use of treasury
            shares as at the end of the current financial period reported thereon.

            Not applicable. The Company did not have treasury shares during and as at the financial year
            ended 31 December 2010.


2.          Whether the figures have been audited or reviewed and in accordance with which auditing
            standard or practice.

            The figures have not been audited or reviewed by the Company’s auditors.


3.          Where the figures have been audited or reviewed, the auditors’ report (including any
            qualifications or emphasis of a matter).

            Not applicable. The figures have not been audited or reviewed by the Company’s auditors.


4.          Whether the same accounting policies and methods of computation as in the issuer’s most
            recently audited annual financial statements have been applied.

            The Group has applied the same accounting policies and methods of computation in the
            preparation of the financial statements for the current reporting period with the audited financial
            statements for the financial period from 1 April 2009 to 31 December 2009.

            With effect from 1 January 2010, the Group adopted the new/revised Financial Reporting
            Standards (“FRS”) and interpretations of FRS that are mandatory for application on that date.

            The following are the new /revised FRS that are relevant to the Group:-

            (i)    FRS 27 Consolidated and Separate Financial Statements
            (ii)   FRS 103 Business Combinations

            FRS 27 (2009) Consolidated and Separate Financial Statements

            FRS 27 (2009) requires the effects of all transactions with non-controlling interests to be recorded
            in equity if there is no change in control and these transactions will no longer result in goodwill or
            gains and losses. In the event when control is lost, any remaining interest in the entity is re-
            measured to fair value, and a gain or loss is recognised in profit or loss. The Group will apply FRS
            27 (2009) prospectively to transaction with non-controlling interests for the financial year ended 31
            December 2010.




                                                        9
     FRS 103 (2009) Business Combinations
     FRS 103 (2009) applies the acquisition method with certain significant changes from the purchase
     method referred to in FRS 103 (2006). For example, all considerations given to purchase a
     business are to be recorded at fair value at the acquisition date, with contingent considerations
     classified as debt subsequently re-measured through profit or loss if the fair value changes were
     to take place after the measurement period. There is a choice on an acquisition-by-acquisition
     basis to measure the non-controlling interest in the acquiree either at fair value or at the non-
     controlling interest’s proportionate share of the fair value of the acquiree’s net assets. All
     acquisition-related costs should be expensed. The Group will apply FRS 103 (2009) prospectively
     for the financial year ended 31 December 2010.


5.   If there are any changes in the accounting policies and methods of computation, including
     any required by an accounting standard, what has changed, as well as the reasons for, and
     the effect of, the change.

     Not applicable.


6.   Earnings per ordinary share of the group for the current financial period reported on and
     the corresponding period of the immediately preceding financial year, after deducting any
     provision for preference dividends.


                                                                    12 months ended
                                                                 31/12/2010      31/12/2009

     Net profit for the period (S$'000)                               4,651          7,389

     Earnings per share
     Based on weighted average number of
                                                                       1.40           2.96
     ordinary shares in issue (cents)

     Weigted average number of ordinary shares in issue         332,004,657    250,000,000

     Adjusted net profit for the period (S$'000)                      4,618          7,389

     On fully diluted basis (cents)                                    1.35           2.96

     Adjusted weighted average number of ordinary shares
     in issue                                                   341,671,324    250,000,000

     The net profit used to compute diluted earnings per share is adjusted to add back the interest
     expenses (S$33,000) arising from the convertible loan.

     The weighted average number of shares in issue for the comparative period (financial year ended
     31 December 2009) is determined to be the number of ordinary shares the Company issued to the
     vendors in the RTO.




                                                           10
7.     Net asset value (for the issuer and group) per ordinary share based on issued share capital
       of the issuer at the end of the:-

       (a) current financial period reported on; and

       (b) immediately preceding financial year.


                                                                                                         Group
                                                                                           31/12/2010               31/12/2009
      Net Asset Value Per Ordinary Share

      - Based on Issued Share Capital at the End of Financial Year                      11.25 cents               7.97   cents

      - Number of Existing Issued Shares at the End of Financial Year                    456,041,945              250,000,000


                                                                                                        Company
                                                                                           31/12/2010               31/12/2009
      Net Asset Value Per Ordinary Share

      - Based on Issued Share Capital at the End of Financial Year / Period             10.27 cents               6.92   cents

      - Number of Existing Issued Shares at the End of Financial Year / Period           456,041,945              178,707,030


       The number of issued shares at the end of 31 December 2009 for the Group is determined to be
       the number of shares issued to the vendors in the RTO. As for the Company, the number of
       issued shares is adjusted to reflect the share consolidation (714,828,122 divided by 4).


8.     A review of the performance of the group, to the extent necessary for a reasonable
       understanding of the group’s business. It must include a discussion of the following:-

(a)    any significant factors that affected the turnover, costs, and earnings of the group for the
       current financial period reported on, including (where applicable) seasonal or cyclical
       factors; and

       Turnover

       Divisions                                             12 months ended          12 months ended             Variance %
                                                          31/12/10 (“FY2010”)      31/12/09 (“FY2009”)
                                                                       S$’000                   S$’000
       Retail (note 1)                                                  6,838                    3,968                   72.3%
       Sourcing & Procurement (note 2)                                  1,705                        -                      nm
       Original    Design  Manufacturing                               50,488                   46,182                    9.3%
       (“ODM”)
       Others                                                                371                     -                      nm
       Total                                                              59,402                50,150                   18.4%

       Notes:
      1)    Retail Division for FY2010 consisted of 12 months of the financial results of the CCFH children wear retail
            business under the JJL Kids brand and 5 months of the financial results of Friven’s bedlinen retail
            business. FY2009 only consisted of 12 months of the financial results of the CCFH retail children wear
            business under the JJL brands.

      2)    Sourcing & Procurement Division for FY2010 consisted of 5 months of the financial results of Friven’s
            sourcing business.



                                                                 11
Turnover for FY2010 increased by S$9.3 million to S$59.4 million as compared to S$50.2 million for
FY2009. The increase was primarily due to:-

  -   increase in sales from the ODM Division amounting to S$4.3 million mainly from current
      customers,
  -   increase in sales from the Retail Division amounting to S$2.9 million with CCFH retail
      business accounting for S$0.2 million of the increase arising from the expansion in the
      number of sales outlets, and the balance of the increase amounting to S$2.7 million was from
      5 months of sales in the bedlinen retail business,
  -   inclusion of 5 months of contribution (August to December 2010) from the Sourcing &
      Procurement Division, consequent to the completion of the RTO. This amounted to S$1.7
      million, and
  -   inclusion of 5 months of contribution (August to December 2010) from the Others Division,
      consequent to the completion of the RTO. This amounted to S$0.4 million.

  Gross Profit

  Gross profit increased by 19% or S$2.9 million from S$15.9 million for FY2009 to S$18.8 million
  for FY2010, in line with the increase in sales. Gross profit margin had remained relatively stable at
  31.72% for both FY2010 and FY2009.

  Other Income

  Other income for FY2010 was 281% or S$1.0 million higher than FY2009, mainly due to the
  inclusion of rental income from the Company’s flagship store at Tanglin.

  Expenses

  Selling and distribution expenses increased by 162%, or S$3.8 million for FY2010 as compared to
  FY2009. With the completion of the RTO, the selling and distribution expenses of the Friven’s
  bedlinen retail and sourcing and procurement businesses for 5 months were consolidated. These
  mainly related to rental of retail stores (S$1.1 million), manpower costs (S$0.6 million) and
  maintenance costs (S$0.4 million). With the increase in the ODM business, amortisation expenses
  increased by S$1.0 million and packaging expenses increased by S$0.6 million.

  General and administrative expenses increased by S$5.3 million to S$7.5 million for FY2010 as
  compared to S$2.2 million for FY2009. The increase was mainly due to:-

  -   RTO expenses amounting to S$1.3 million comprising S$0.6 million in cash and the balance
      in shares,
  -   operating leases amounting to S$1.1 million,
  -   agency service fees amounting to S$0.2 million,
  -   contributions to defined contribution plans amounting to S$1.4 million,
  -   depreciation and amortisation of S$0.6 million, and
  -   exchange loss of S$0.7 million arising from the weakening of the US dollar against the
      Singapore dollar.

  Finance costs increased by S$0.4 million for FY2010 as compared to FY2009, mainly due to
  interest expense arising from the increase in borrowings to finance the increased business
  activities.

  Income tax expense was lower by S$0.4 million for FY2010 as compared to FY2009, mainly due
  to lower net profit for the financial year.

  Profit after income tax was lower by S$5.1 million for FY2010 as compared to FY2009, due to the
  above reasons.



                                             12
(b)   any material factors that affected the cash flow, working capital, assets or liabilities of the
      group during the current financial period reported on.

      Non-current assets increased by S$23.0 million as at 31 December 2010 as compared to 31
      December 2009. This was mainly due to the completion of the RTO where the excess of purchase
      consideration over the net assets was allocated to intangible assets and goodwill.

      Intangible assets comprised brand equity (S$4.1 million), customer relationships (S$6.6 million)
      and goodwill (S$18.3 million). Property, plant and equipment had also increased by S$2.1 million
      with the consolidation of the assets.

      Inventories increased by S$2.3 million as at 31 December 2010 pursant to the completion of the
      RTO. The inventories as at 31 December 2010 also reflected the combined inventories of the
      enlarged Friven group of companies.

      Trade and other receivables increased by S$12.6 million as at 31 December 2010. Most of the
      sales from the Group’s ODM Division were captured in the last few months of FY2010 and were
      not due for payment from customers as at 31 December 2010.

      Trade and other payables increased by S$3.2 million as at 31 December 2010. This was mainly
      due to advances from external parties and delayed repayment to creditors.

      Bank borrowings increased by S$5.2 million due to the utilisation of short-term bank loan for the
      Group’s ODM Division’s orders.

      Non-current liabilities increased by S$1.5 million mainly due to the consolidation pursuant to the
      RTO’s completion. These comprised of mainly the convertible loan of S$1.2 million, finance lease
      payable of S$0.1 million and deferred tax liabilities of S$0.2 million.

      The Group’s cash inflow was mainly due to investing activities amounting to S$1.2 million mainly
      attributable to the net acquisition consideration received from the RTO and financing activities of
      S$2.8 million as a result of proceeds from the Placement and bank borrowings. Cash outflow from
      operating activities of S$1.3 million arose mainly from an increase in trade receivables for the
      ODM Division and decrease in trade and other payables of the Group. There was a net cash
      inflow of S$2.7 million for FY2010.

      Net cash and equivalents of the Group was S$7.5 million as at 31 December 2010 as compared
      with S$4.8 million as at 31 December 2009.

      The Group had a positive working capital of S$20.8 million as at 31 December 2010.


9.    Where a forecast, or a prospect statement, has been previously disclosed to shareholders,
      any variance between it and the actual results.

      Not applicable. No forecast or prospect statement for the current financial year had been
      previously disclosed to shareholders.


10.   A commentary at the date of the announcement of the significant trends and competitive
      conditions of the industry in which the group operates and any known factors or events
      that may affect the group in the next reporting period and the next 12 months.


                                                13
      The Company’s strategic intent is to become a leading specialty retailer of home and children’s
      lifestyle products in Asia, catering to the complete lifestyle needs of women and young families in
      Southeast Asia and China. With CCFH in Friven’s stable of companies, the Company will be able
      to offer children’s apparel and merchandise through CCFH’s “JJL Kids” brand to form a complete
      children’s product range in apparel, bedlinen and accessories. It will also enhance its sales
      channels via CCFH’s network of 105 stores in China comprising self-operated retail stores and
      franchise outlets in China.

      In October 2010, the Company appointed Kinderdijk Sdn Bhd (“Kinderdijk”) as its sole distributor
      for its bedding and bedlinen products in Singapore and Malaysia. This allows the Company to
      focus on developing its own brand management platform that leverages on its core competencies
      of Content & Production, Sales & Procurement, Apparel & Bedding Manufacturing and Sales &
      Distribution.

      The Company’s brand management platform will be used to further develop and expand the
      market presence of the Company’s portfolio of proprietary (e.g. Allegoria, DS, Friven, Perrin de
      Rossi and Relax at Home) and licensed brands (e.g. Hi-5) by developing new merchandise and
      product offerings. For example, the Company announced on 11 October 2010 that it was working
      with Wee Care (Singapore) Pte Ltd to co-develop a Hi-5 pre-school concept and curriculum. The
      Company has also developed a global merchandise catalogue that it is marketing to worldwide Hi-
      5 licensees for their merchandise sourcing needs. In addition, the Company has also launched a
      new range of Hi-5 merchandise for Southeast Asia at the end of 2010.

      The Company is also utilising its brand management platform to reach out to the owners of other
      brands in order to help extend their brand’s presence, especially in Asia. In 2010, the Company
      brought the PIXAR: 20 Years of Animation exhibition to Singapore.


11.   Dividend

(a)   Current Financial Period Reported On

      Any dividend declared for the current financial period reported on?

      No.

(b)   Corresponding Period of the Immediately Preceding Financial Year

      Any dividend declared for the corresponding period of the immediately preceding financial year?

      No.

(c)   Date payable

      Not applicable.

(d)   Books closure date

      Not applicable.


12.   If no dividend has been declared/recommended, a statement to that effect.



                                                14
      No dividend has been declared for the financial year ended 31 December 2010.


13.   Disclosure on the uses of Placement proceeds

      The Company completed the Placement in October 2010 which raised gross proceeds of S$1.99
      million. As at 31 December 2010, the uses of the Placement proceeds are disclosed and utilised
      as follows:-

            Purpose                                                Earmarked               Actual use
                                                                      Amount
      1)    Repayment of borrowings                               S$1,680,000           S$1,680,000
      2)    General working capital                                S$319,999             S$319,999

            Total                                                 S$1,999,999           S$1,999,999


14.   Interested person transactions

      The table below shows the interested person transactions for the period from the date of
      completion of acquisition (3 August 2010) to 31 December 2010:-

      Name of Interested Person    Aggregate value of all interested   Description of the transaction
                                   person transactions conducted       entered     into    with    the
                                   under shareholders’ mandate         interested person during the
                                   pursuant to Rule 920 of the Rules   financial period under review
                                   of Catalist

                                   RMB / S$
      Zhangzhou Dazhongxing         RMB 5,086,206 / S$1,025,444        Payments in relation to the
      Textile Industry Co., Ltd                                        purchases of raw materials, a
      (“DZX”)                                                          portion of which was refunded
                                                                       as DZX was unable to
                                                                       purchase the raw materials.




                                              15
PART II - ADDITIONAL INFORMATION REQUIRED FOR FULL YEAR ANNOUNCEMENT

16.    Segmented revenue and results for business or geographical segments (of the group) in
       the form presented in the issuer’s most recently audited annual financial statements, with
       comparative information for the immediately preceding year.



                                                 Retail and                      Original Design
                                                Furnishing       Sourcing        Manufacturing     Others     Sub-total    Eliminations   Group

                                                       $'000           $'000              $'000       $'000        $'000         $'000       $'000
        Year ended 31 Dec 10
        Turnover
        External Sales                                 6,838           1,705             50,488         371      59,402            -        59,402
        Inter-segment sales                              506              36             46,038           2      46,582        (46,582)        -

        Segment results                                  (1,086)         (670)            9,458         252        7,954        (1,334)      6,620
        Unallocated expenses                                                                                                                   -
        Operating profit                                                                                                                     6,620
        Interest expense                                                                                                                      (695)
        Income tax expense                                                                                                                  (1,175)
        Profit for the financial year                                                                                                        4,750
        Non - Controlling interests                                                                                                           (108)
        Net profit for the financial year attributable to owners of the parent                                                               4,642

        Segment assets                                60,959           3,515             65,269         382     130,125        (70,407)     59,718
        Unallocated assets                                                                                                                  18,658
        Consolidated total assets                                                                                                           78,376

        Segment liabilities                           10,384             484             28,470         212      39,550        (12,562)     26,988
        Unallocated Liabilities                                                                                                                -
        Consolidated total liabilities                                                                                                      26,988

        Capital expenditure                            3,295           1,740                107         -          5,142           -         5,142
        Depreciation and amortisation                    359             160              1,796          97        2,412           -         2,412




                                                                 16
                                                Retail and                   Original Design
                                                               Sourcing                         Others    Sub-total    Eliminations    Group
                                               Furnishing                    Manufacturing

         Year ended 31 Dec 09
         Turnover
         External Sales                              3,968             -             46,182          -       50,150            -         50,150
         Inter-segment sales                           -               -                669          -          669           (669)         -

         Segment results                             1,564             -             10,016          -       11,580             -        11,580
         Unallocated expenses                                                                                                               128
         Operating profit                                                                                                                11,708
         Interest expense                                                                                                                  (293)
         Income tax expense                                                                                                              (1,661)
         Profit for financial year                                                                                                        9,754
         Non-controlling interests                                                                                                          -
         Net profit for the financial year attributable to owners of the parent                                                           9,754

         Segment assets                                689             -             37,168          -       37,857          (1,955)     35,902
         Unallocated assets                                                                                                               1,381
         Consolidated total assets                                                                                                       37,283

         Segment liabilities                              5            -             13,151          -       13,156          (1,955)     11,201
         Unallocated Liabilities                                                                                                          6,152
         Consolidated total liabilities                                                                                                  17,353

         Capital expenditure                           -               -                159          -           159            -           159
         Depreciation and amortisation                 144             -              1,670          -         1,814            -         1,814




17.    In the review of performance, the factors leading to any material changes in contributions
       to turnover and earnings by the business or geographical segments.

       As had been discussed in section 8.


18.    A breakdown of sales.


                                                                                    Latest
                                                                                  financial       Previous             Percentage
                                                                                    period     financial year           increase
                                                                                         $'000          $'000                    %

      (a) Sales reported for the first half year                                      26,822             24,532                9.33%


      (b) Operating Profit after tax before deducting
      minority interests reported for the first half year                              5,837              5,893               -0.95%

      (c) Sales reported for the second half year                                     32,580             25,618              27.18%

       (d) Operating Profit after tax before deducting
      minority interests reported for the second half
      year                                                                            (1,087)             3,861            -128.15%




                                                                  17
19.     A breakdown of the total annual dividend (in dollar value) for the issuer’s latest full year
        and its previous full year.

        Not applicable.




BY ORDER OF THE BOARD

Gary Loh Hock Chuan
Chairman

1 March 2011




                                               18

				
DOCUMENT INFO