11
Cordlife Group Limited
Annual Report 2016
fees incurred for the take-over offer of Stemlife and the
legal proceeding brought against Cryoviva Singapore Pte
Ltd over intellectual property infringement respectively.
In FY2016, the Group also provided for non-recurring
service tax relating to customer contracts in prior years
of S$626,000 for Cordlife India. The Group also incurred
additional directors’ fees of S$0.25 million for the
accumulation of time spent by Non-Executive Directors
in relation to Board and management changes in the year.
Depreciation of property, plant and equipment increased
by S$207,000 as the Group purchased additional
laboratory equipment in India due to higher sales volume
as well as depreciation expenses incurred by Stemlife.
The Group also recognised intangible assets arising
from the acquisition of Stemlife, which led to an increase
in amortisation expenses by S$335,000 in FY2016.
To achieve best-in-class quality assurance as we continue
to grow our customer base and expand our regional
operations, the Group invested more in training and
development to augment the long-term effectiveness
and ef ciency of our employees, as well as an increased
support base. This attributed to higher staff-related
costs of approximately S$1.3 million. The Group holds
a strong belief in developing our people’s technical
and leadership skills so as to achieve excellence and
improved productivity. In FY2016, the Group also incurred
additional one-off expenses of S$164,000 in consultancy
fees relating to hiring costs and board effectiveness
review. Stemlife also accounted for S$1.5 million of the
increase in administrative expenses.
As a result, pro t before income tax fromoperationswas S$2.9
million in FY2016, as compared to S$6.1 million in FY2015.
During the year, the Group also completed the sale of
shares and a convertible note (the “Disposal”) issued
by CCBC of which the Group agreed to sell to Golden
Meditech Holdings Limited (“Meditech”) 7,314,015
ordinary shares of par value US$0.0001 per share (“Sale
Shares”) in CCBC and a 7% senior unsecured convertible
note (“Convertible Note”) due October 3, 2017 issued
by CCBC to the Company in the principal amount of
US$25,000,000.
The Group recorded a fair value gain on its investment
in CCBC designated at fair value through pro t or loss
of S$4.5 million and a fair value gain on derivative of
approximately S$2.5 million for FY2016. Upon completion
of the Disposal, the Group also recognised a gain on the
sale of the Sale Shares and Convertible Note of S$151,000
and S$5.0 million respectively. The Group incurred other
expenses of S$2.4 million, which comprised one-time
employee bonuses in relation to the realised gains of the
Sale Shares and the Convertible Note, as well as additonal
directors’ fees for extra work put in and time spent by Non-
Executive Directors in relation to the Disposal.
Overall, the Group recorded net pro t of S$12.6 million
for FY2016. Net asset value per share as at June 30, 2016
was 51.19 cents compared to 62.46 cents as at June
30, 2015. The Group’s balance sheet was strengthened
signi cantly by the proceeds from the Disposal of
S$152.9 million, the repayment of the Magnum Loan of
S$62.6 million and interest received on Magnum Loan and
the Convertible Note of S$5.2 million. This was offset by
a total dividend payout of approximately S$36.3 million,
in the form of a special interim dividend of 13.0 cents
per share to all shareholders on December 3, 2015,
the Group’s repurchase of Notes of S$52.9 million to
deleverage the nancial position of the Company and its
acquisition of shares in Stemlife.
On February 1, 2016, the Group also announced that
it acquired a convertible bond and equity interest in
CellResearchCorporationPte. Ltd. (“CRC”) of S$8.4million.
CRC entered into a Services and Research Collaboration
Agreement with the University of Colorado School of
Medicine and ClinImmune Labs in June 2015 with the
aim to reach a point where they can embark on US FDA
approved trials for the treatment of diabetic wounds using
cord lining stem cells. This will signi cantly enhance the
value proposition of Cordlife’s cord lining banking service
in its existing markets. CRC also has a cosmeceutical line
called CALECIM, which is now distributed in 9 countries,
including USA, Korea and Taiwan.
As at June 30, 2016, the Group has cash and cash
equivalents, xed deposits and short term investments of
S$138.1 million. With a strong nancial standing, the Group
is poised to drive growth in core businesses and explore
potential mergers and acquisitions to expand its scope of
services and offerings in the coming nancial year.
