Page 21 - ar2012

Effective tax rate decreased from 17.0% to 15.6%, mainly
due to an overprovision of S$176,000 in respect of prior
year. Income tax expense decreased from S$3.99 million in
FY2011 to S$3.81 million in FY2012.
As a result, profit after taxation rose from S$19.47 million
in FY2011 to S$20.66 million in FY2012, an increase of
S$1.19 million.
BALANCE SHEET
Plant and equipment decreased by S$1.49 million from
S$10.41 million as at 31 December 2011 to S$8.92 million
as at 31 December 2012, mainly due to lower capital
expenditure incurred for school renovation and computers in
FY2012 compared to FY2011.
In addition, trade receivables increased by S$0.52 million
mainly due to an increase in registration fees and tuition
fees charged, while prepayments increased by S$0.71
million which was mainly due to an increase in prepaid IPO
expenses of S$0.57 million.
There was a decrease in other payables of S$0.79 million
mainly due to lower unclaimed excess payments as at 31
December 2012 in other creditors as the Group continued
with its efforts to make refunds during the year.
Fees received in advance increased from S$35.24 million as
at 31 December 2011 to S$37.84 million as at 31 December
2012, an increase of S$2.60 million which was mainly
attributable to the upward revision of tuition fees by between
8% to 15% across the School.
As at 31 December 2012, the Group’s shareholders’ equity
amounted to S$67.43 million, compared to S$54.78 million
as at 31 December 2011.
CASH FLOW
In FY2012, net cash generated from operating activities
was S$25.57 million, which consisted of cashflows from
operating activities before working capital changes of
S$28.71 million, net working capital inflow of S$0.84 million,
interest received of S$0.22 million and income tax paid of
S$4.20 million.
The net working inflow of S$0.84 million arose mainly from
the increase in fees received in advance of S$2.60 million
from the revision in the tuition fees across the School
for the semester that commenced in August 2012. This
was partially offset by the increase in trade receivables of
S$0.52 million and increase in other receivables, deposits
and prepayment of S$0.67 million which was mainly due
to the increase in prepayment of IPO expenses of S$0.57
million and decrease in other payables of S$0.79 million as
disclosed in the explanation for balance sheet movement as
per above.
In FY2012, net cash outflow for investing activities of S$2.74
million was mainly due to the acquisition of plant and
equipment of S$2.39 million from capital expenditure for
school renovation and initial professional fees expenditure
for the new school site of S$0.54 million, computers of
S$0.82 million, motor vehicles of S$0.56 million and other
capital expenditures relating to school furnishings, school
equipment, library books and media in aggregate of S$0.47
million, as part of the School’s regular annual renewal and
replacement process.
The net cash outflow from financing activities of S$8.00
million was due to the payment of an interim dividend in
respect of FY2012.
As at 31 December 2012, the Group’s cash and cash
equivalents stood at S$94.46 million, up from S$79.63
million a year ago.
SIGNIFICANT TRENDS AHEAD
Looking ahead, the results of the School operations may be
affected by any changes in demand for student placements
in, and the supply and capacity of, foreign system schools in
Singapore. Inflationary pressures in Singapore could translate
into higher personnel expenses, which are the largest
component of the Group’s operating expenses. The ability to
pass on any of such increase to the Clients, otherwise known
as the parents and guardians of the School’s students, may
also affect the Group’s operational results.
In addition, the Group’s ability to increase the School’s tuition
fee rate will also affect the Group’s results. For the academic
year that commenced in August 2012, the tuition fees were
increased by between 8% and 15% across the School.
1 Overseas Education Limited AR 2012
Investing In Education
W130220-OEL AR p1-22.indd 19 26/3/13