Message from The Chairman


Lim Ee Ann
Non-Executive Chairman
 

FY2009: THE YEAR IN REVIEW


The financial year ended in June 2009 was a challenging year as the global market was still reeling from the impact of the U.S. housing market bubble burst and the banking crisis that ensued. The unprecedented financial and economic turmoil dampened consumers’ demand and business spending for a good part of the financial year.  
The Group had a setback on 20 August 2008 when its  diversification plan into a new growth area in the “minerals and resource” sector was aborted by the Company as the Proposed Transaction was deemed to constitute a Very Substantial Acquisition or Reverse Takeover that falls under Rule 1015(1) of the SGX-ST Listing Manual.

On a brighter note, the resolution of a long standing lawsuit taken against General Electric by CP Solutions Pte Ltd, a 75% subsidiary of the Company, had resulted in a significant and positive impact to the Group’s financial in the financial year ended 30 June 2009 (“FY2009”); putting the Group in a good position, in the midst of a tight credit market, to leverage on its positive cash position to consider strategic diversification into new growth areas to maximise value to all its shareholders.   

REVENUE

The Group recorded sales revenue of S$12.0 Million with a Net Profit after Tax of S$ 5.6 Million.  The total sales revenue of the Group for FY2009 was significantly reduced by 46% to S$12.0 Million as compared to S$22.5 Million in FY2008 attributable to a major scaling down of semiconductor distribution business coupled with a significant reduction in business in its wholly owned subsidiary, Ranoda Electronics Pte Ltd (“Ranoda”), due to lower demand of connectors from a major customer.

PROFITABILITY

The other operating income increased to S$21 Million in FY2009 from S$3 Million in FY2008 due to (a) gain of S$2.6 Million on disposal of its associated company Altum Precision Pte Ltd (“Altum”); (b) reversal of provision of S$9.5 Million for doubtful debts; and (c) gain of S$5.3 Million towards excess of settlement amount received over the receivables.

The overall operating expenses for FY2009 – although there is a reduction in the normal operating expenses by approximately 11% in FY2009 compared to FY2008 due to scaling down of distribution business segment - increased to S$ 12.8 Million from S$ 10 Million in FY2008 due to (a) provision for doubtful debts of S$2.3 Million; and (b) provision for stock obsolescence S$1.4 Million.

FINANCIAL POSITION

The NTA of the Group improved significantly by 70% to S$ 12.8 Million compared to S$7.5 Million in FY2008.  The net current assets improved to a positive position to S$7.8 Million compared to the negative position of S$2.8 Million in FY2008 attributable to the various significant factors including write-back of provision for trade receivables, gain on sale of Altum, inflow of funds from the settlement of CPS-GE legal case etc.

Distribution Activities
The Group’s components distribution business has become increasingly difficult and challenging due to the changing business landscape as the Group’s manufacturing customers base has shifted away mainly from Singapore to  the lower-input cost countries in the People’s Republic of China and the emerging economies in Thailand, India and Vietnam. 
On 13 February 2009, the Board announced that the Company had disposed the business and inventories relating to the Group’s distribution business. The Company is in the process of disposing off the balance inventories of the distribution business in its usual course of business to free up the working capital and resources which would otherwise be committed to finance the distribution business, to support the strategic new businesses that will give rise to better returns in the long run to maximise Shareholders’ value.

Manufacturing Activities

The Group’s current manufacturing activities are supported through Ranoda and the Group’s associated company, Plasmotech Pte Ltd (“Plasmotech”).
Despite recent setbacks and losses suffered by Ranoda in the past few financial years due in large part to the recession brought about by the global financial and economic crises, and the loss of a major account following an acquisition by its competitor; the Group remains cautiously optimistic of the prospects of Ranoda barring any unforeseen circumstances.  Ranoda has filed an application to the High Court of Singapore to place itself under judicial management as announced on 14 September 2009.

On 20 January 2009, the Board announced that the Company had disposed the entire 25% interest owned in Altum as the poor macro economic conditions caused by the global financial and economic crises had limited the Company’s funding options. The disposal of the Company’s investment in Altum was intended to raise the necessary capital to fund the Company’s working capital needs and also enabled the Company to fulfil certain financial obligations

 

PROSPECTS

The Company is proposing to diversify its business to include the business relating to the sourcing, supply, trading and distribution of commodities, mineral and resource related products.  The Singapore Exchange Securities Trading Limited (the “SGX-ST”) has on 23 September 2009 granted its clearance for the Shareholders’ Circular regarding the aforesaid matters. The Company will be convening an extraordinary general meeting to obtain the Shareholders’ approval for the aforesaid matters in due course.

 

APPRECIATION
On behalf of the Board of Directors, I thank our management and staff for their dedication and perseverance in a challenging and difficult year.  In addition, I would like to thank all of our customers, shareholders, bankers, business associates, partners and suppliers for their continuing support.   

 

Lim Ee Ann
Non-Executive Chairman

 
 

Ultro Technologies Limited
1 Changi Business Park Avenue 1
#05-01 Ultro Building,  Singapore 486058
Tel: 65-6545 7811, Fax: 65-6785 9373
Email: info @ ultro.com.sg
webmaster @ ultro.com.sg
 
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