Last checked at 15 May 2009 07:00
SINOSOFT TECHNOLOGY PLC ("SINOSOFT" OR THE "COMPANY")
PRELIMINARY RESULTS FOR THE YEAR ENDING 31 DECEMBER 2008
Sinosoft, the China based developer and provider of e-Government software and services, announces its preliminary results for the year ended 31 December 2008.
Financial Highlights
Turnover up 13.8% to US$12.1M (2007: US$10.6M)
Gross profit up 18.7% to US$8.6M (2007: US$7.2M)
Research & Development expenditure up 26.9% to US$2.0M (2007: US$1.6M)
Operating profit decreased to US$3.3M (2007: US$4.8M which included a profit on investments of US$1.35M)
Dividend to be maintained at FY2007 payout of 0.31 pence per share
Operating Highlights
Completed installation and live testing of the State Administration of Tax ("SAT") project in two districts in the city of Chongqing. However, SAT roll out outside of Jiangsu continues to experience delay
Sale of add-on services contributing strongly to tax software revenue growth
Strong growth in Information Integration division
Seven new products developed in the areas of export tax and e-government, expected to generate revenue in FY2009
Commenting on the results, Mao Ning, Chairman of Sinosoft said: "Despite the tough economic backdrop, I am pleased to announce that the Group's (the Group being Sinosoft and its subsidiaries) revenue and gross profit have continued to grow. Although net profit has declined somewhat as a result of higher operating costs, this is primarily a result of additional investment in research and development ("R&D") which management believes is essential to support the future growth of the business.
"Overall, our financial position in FY2008 was satisfactory considering the impact caused by the current economic slowdown. We are fortunate to be a broadly based software business, not dependent on any one income stream. Our results show that the management's strategy of diversifying away from the SAT project is yielding positive results. Our cash position remains strong and I am pleased that we are in a position to propose a dividend to shareholders."
-ends-
For further information please contact:
| Sinosoft Technology plc | Mr. Yifa Yu | yuyifa@sinosoft-technology.com |
| Hanson Westhouse Limited | Tim Metcalfe/Richard Baty | 020 7601 6100 |
| Tavistock Communications | Simon Compton | 020 7920 3150 |
Chairman's Statement
Results
FY2008 started well with the continuation of growth from previous years but this momentum deteriorated during the last quarter as a result of the slowing global economy. Despite the challenging operating environment, the Group was able to register growth in turnover and gross profit. However, operating profit was lower than FY2007 as a result of increased spending in areas of R&D, selling and distribution and administration which was necessary in order to support the future success of the business. Unlike FY2007 the Company's operating profit was not enhanced by a large gain on investments.
The global economic slow down and more specifically the dramatic fall off in Chinese exports has exacerbated the delays already suffered in the roll-out of the Company's SAT product outside of Jiangsu. Despite the delays suffered with the wider rollout, within Jiangsu the Group witnessed strong turnover growth from its tax software division. Part of this can be attributed to newly setup export enterprises in Jiangsu purchasing our export tax rebate software while the main factor behind this growth is the sale of value added products to our existing customers.
The Information Integration division grew by 20.2% during 2008 due partly to the new products developed in FY2007. We now expect some short term slowdown as large international corporate clients reduce their IT expenditure as a result of the current financial climate.
e-Government was the only division to record a decline in growth. Despite the popularity of the new products launched in the first half of FY2008, there has been some delay in the e-Government software projects in the fourth quarter as a result of a number of local and provincial governments in the PRC suspending discretionary activity until 2009. In respect of its outsourcing service, the Group completed a contract with United Wise Development Limited in Q1 FY2008. In addition, work has now commenced with international logistics group DB Schenker; although progress is slower than expected due to the economic climate. It is our intention to continue to actively pursue outsourcing opportunities.
In FY2008, System Integration has seen marginal growth with its overall contribution to Group turnover decreasing from 33.3% to 31.2%. Whilst a traditionally low gross profit margin division, the Group believes that System Integration continues to play a vital role in increasing our customer base and helping to bring in sales in other divisions.
Gross profit margin has increased slightly to 71% (2007: 68%) as a result of a change in the Group's sale mix with a smaller proportion of revenues being generated from lower margin Systems Integration business.
Although cash generated from operations increased by US$1.2M during the year to US$4.0M, overall the Group experienced a net cash outflow taking our cash position down to US$12.9M. A significant reason for this net cash outflow was a loan of US$4.4M made by Sinosoft to the developer of a software park that the Company intends to relocate to in FY2010. Under the arrangement, Sinosoft deposited RMB30 million (approximately US$4.4 million) into a bank account with Shanghai Pudong Development Bank (the "Bank"). The Bank has advanced these monies to the developer and will supervise use of the funds. In return, Sinosoft receives annual interest of 10% payable on a quarterly basis, together with naming rights to the new development and the right to rent the developed properties at 60% of the market rate. The developer has provided its land use rights as security for the loan, which is fully repayable within two years.
By relocating to new premises, we will have the necessary space to continue our strategy of investing in R&D. As a result of pursuing this R&D strategy, our intangible assets of development cost and patents have increased to US$5.1M in FY2008; we expect this to generate revenues in FY2009 and beyond. During the year, we have increased the number of R&D personnel employed to 230 who are engaged on various projects; an increase from 170 R&D personnel in FY2007. Trade receivables also increased significantly due partly to contracts that were completed near the end of the year. We will continue to adhere to stringent collection policy.
Dividend
At an operating level the Group has continued to be cash generative and a resolution proposing a dividend of 0.31 pence per ordinary share (2007: 0.31pence per share) will be proposed at the forthcoming AGM.
Board
In April 2009, the Board welcomed Mr Yifa Yu as the Chief Finance Officer. Yifa's appointment is a significant milestone for the Group as he not only has excellent professional qualifications - being an Australian Certified Practising Accountant - and experience, but, importantly, he was also able to relocate to Nanjing to work full time for the Company. Yifa is a fluent English and Mandarin speaker.
Outlook
The delays to the SAT roll-out and the drop in e-Government revenues have created a challenging outlook for the short term. However, this has not affected the long-term objective for Sinosoft, which is the continued expansion of the four core business areas. The Group is also continuously looking to identify new sources of revenue as well as merger and acquisition opportunities. Depending on the speed of recovery of the world economy and the extent of the impact from the government stimulus packages, we are cautiously optimistic.
I would like to take this opportunity to thank all the employees of Sinosoft for their dedication and continued efforts to grow and develop the business.
Mao Ning
Chairman
14 May 2009
Chief Executive Officer's Report
It has been a turbulent year for the world economy. Exports in the PRC declined sharply in the last quarter of FY2008 with the PRC government suspending discretionary spending and corporations reducing their IT expenditures. Despite the tough economic conditions, Sinosoft was able to register a 13.8% increase in full year revenue to US$12.1M (2007: US$10.6M) and 18.7% growth in gross profit to US$8.6M (2007: US$7.2M). This lends support to the Group's continued strategy of investing in R&D, expanding our customer base through the provision of lower margin System Integration products and the continued expansion of the four core business areas. As a result of these strategies, operating expenses have increased during the year. Together with a global environment where investment opportunities are reduced, we were not able to attain the same level of investment gains as FY2007 (FY2007: US$1.7M, FY2008: US$0.6M). The result is a 31.2% decrease in operating profit to US$3.3M (2007: US$4.8M). Basic and diluted earnings per share were US$0.0207 (2007: US$0.0291).
For FY2008, Systems Integration contributed 31.2% of the total turnover, Tax Software contributed 25.8%, e-Government contributed 22.4% while Information Integration contributed 20.6% towards total turnover.
Tax software
As previously reported the roll out of the Group's SAT product outside of Jiangsu has suffered from a number of delays and complications. The downturn in the economy and specifically its impact on the volume and value of exports from the PRC has been a cause of further delay as local and national government agencies are reluctant to add further administrative and cost burdens on exporting enterprises whilst they are suffering from a fall-off in activity levels.
The Company is in dialogue with representatives from the PRC Tax Bureau for Goods and Services together with the PRC Tax Bureau Department of Information, Communication and Technology and with its partners for the SAT project - China National Software Technology Service Corporation and Taihe Digital. In recent discussions the tax authorities have intimated that in the current financial climate, the government feels that this may add more financial burden to such export enterprises already facing falling demand for their products. In addition, with exports declining in China, the volume of export tax rebate applications submitted to tax bureaus has also reduced significantly. With enough manpower to cope with the current volume of submissions, there is less incentive for the SAT to push for a rollout at this point in time.
The SAT authorities have however, communicated their continued support for automation of the export tax filings and have stated that that once exports in China start to recover and the economic environment is more stable, it will resume the rollout and impose compulsory electronic submission; just like it did in Jiangsu. In response Sinosoft has reassigned one third of the original SAT project development staff to developing new value added software that targets existing users of SAT software in Jiangsu, one third to other divisions and the remaining one third to continue working on updating the SAT project with new changes to the PRC tax legislation for the future rollout.
The Company has been adopting a strategy of diversifying away from the SAT project. This is being done through the development of value added software that provides users of our SAT software in Jiangsu with new functions such as information collection and information scanning programs. The improvements increase the accuracy of the export tax rebate application process by reducing the amount of manual data input. In addition, the new product enables the integration of scanned documents into the tax refund application software, speeds up the data gathering process and provides the user with data reporting and analysis tools.
This growth in value added software has enabled the export tax division to witness 56.5% growth in revenue, the strongest revenue growth within the Group.
During the year, we developed a new piece of software called "Sinosoft Information Collection Software V1.0". This software allows export enterprises to enter export data on screen and print it onto invoices regardless of the difference in invoice format. As information on invoices is stored digitally, any tax refund application can be automatically generated, cutting down on error from data entry and at the same time speeding up the tax refund application process. This new product has helped to generate sales in FY2008 and we anticipate additional sales of this product in FY2009.
e-Government
Even though this division has experienced a negative growth of 10.3%, it is still a key division within the Group contributing 22.4% of turnover. The decline in turnover is a result of a number of local and provincial governments suspending discretionary spending until FY2009 due to the current financial crisis. However, with the Government stimulus package announced in early FY2009, we expect Government spending on e-Government software to pickup again in FY2009. We have launched the following six new products during the year with Sinosoft webpage setup and maintenance software registering revenue in FY2008. The remaining five products are expected to start generating sales in FY2009.
(1) Sinosoft Skytech reports software V1.0
(2) Sinosoft marriage registration and management system software V1.0
(3) Sinosoft webpage setup and maintenance software V1.0
(4) Sinosoft QuanLi YangGuang system V1.0
(5) Sinosoft integrated work platform software V1.0
(6) Sinosoft case management software V1.0
Sinosoft Skytech report is a middleware product that allows users to combine complex and distinct sources of data (e.g. XML, CSV, HTML, WMI) to generate reports in various applications (e.g. word, PFF, XML, HTML) that meets users' defined parameters.
Sinosoft marriage registration and management system software is a product for the registry of marriage department. The software's primary use is to help the department consolidate and store details of married couples in one central database so that future applications for marriage can be quickly and accurately cross checked to ensure applicants fulfil all the requirements imposed by the State. It also serves as a feedback bulletin board and communication platform within the department.
Sinosoft webpage setup and maintenance software allows users to easily setup up a webpage. It also provides the tools for users to maintain the contents of the webpage.
Sinosoft QuanLi YangGuang system is a system that is used by the enforcement bureau to uniformly process any complaints against government employees in a transparent and impartial manner. It provides the platform to register a case file, ensure protocols are followed, provide a proper process and approval flow, knowledge management and record the outcome of each case.
Sinosoft integrated work platform software combines 17 sub-systems such as internal gateway, bulletin, communication systems, database etc into one integrated work platform.
Sinosoft case management software is used by the security department to manage the details of any case file. It stores data from the date a case file is first opened to the point in time where a case is closed. Information collected on the database can be used to quickly cross reference other cases. It can also be used to store and manage clues, analyse results and provide a library to store and extract legislation details.
Information Integration
Information Integration has seen turnover grow by 20.2% and now contributes 20.6% of the Group's total turnover. However with the impact of the financial crisis being felt across many industries and countries, we are expecting some delays in projects in this area as corporate clients start reducing their IT spending.
Outsourcing
The Group completed the United Wise Development Limited outsourcing project in Q1 FY2008. In addition, we have started work on another outsourcing project with international logistics company DB Schenker. This area has suffered a slow down, which we expect will continue until economic conditions improve.
Systems Integration
Turnover of Systems Integration has increased marginally during the year. However, in terms of contribution to the Group's total turnover, the contribution from Systems Integration has reduced from 33% in FY2007 to 31.2% in FY2008. The change in the sales mix has helped to improve our overall gross profit margin because this service has the lowest gross profit margin. Although margin is lower, we will continue to pursue Systems Integration projects as management is of the view that securing such jobs can reduce software and hardware compatibility issues, thus making it easier to sell our software to these customers in the future.
Other
Other income from investment opportunities has reduced when compared to FY2007 as the company has participated in less speculative equity investments in volatile markets. This resulted in a decrease in investment gains of US$1.2M. A loan has been given to the developer of a software park, to which Sinosoft intends to relocate, which is earning interest of 10% per annum. In addition, the Group also made a loan of US$1.46M (RMB 10M) to Jiangsu Shiji Jinniu Industrial and Trading Co. Ltd through SPD Bank on 25 December 2008 for a period of six months at an interest rate of 9% per annum and guaranteed by Nanjing Sampler Technology Co Ltd (a Hong Kong listed company). We expect this to be collectable on the due date. These three events have significantly contributed to a net cash outflow for the year.
During the year, we have signed an agreement with Fujitsu to use its PalmSecureTM palm vein biometric authentication system to increase secure access to Sinosoft's IT systems. We will continue to incorporate this system into our products so that we can provide value-added feature and remain competitive.
As part of our strategy for continued growth, we have continued to invest heavily in R&D in FY2008. Total R&D costs in the period were US$5.16M compared to US$4.19M in FY2007. The number of R&D personnel has also increased from 170 at December 2007 to 230.
Outlook
Despite increasingly difficult economic conditions we are very optimistic about the Company's future. Whilst the delays to the SAT contract have been frustrating and have stymied the Company's growth outside of Jiangsu, the Group has managed to grow and develop other aspects of the business and has become less reliant upon its core tax software products.
The Group is well funded and we have maintained profitable growth in what have been unprecedented economic conditions. We have invested heavily in broadening our product and customer base through a significant investment in R&D, marketing and in improvements to our distribution channels.
Xin Yingmei
Chief Executive Officer
14 May 2009
GROUP INCOME STATEMENT
| 2008 | 2007 | |
| US$ | US$ | |
| Revenue | 12,078,124 | 10,615,673 |
| Cost of sales | (3,494,992) | (3,385,934) |
|
| ||
| Gross profit | 8,583,132 | 7,229,739 |
| Other income | 620,974 | 1,744,653 |
| Research and development cost | (1,986,680) | (1,565,550) |
| Selling and distribution expenses | (1,357,692) | (889,937) |
| Administrative expenses | (2,422,484) | (1,712,729) |
| Other operating expenses | (144,387) | (23,331) |
|
| ||
| Profit from operations | 3,292,863 | 4,782,845 |
| Finance cost | (2,303) | - |
| Finance income | 515,632 | 439,185 |
| Exchange gain or loss | (18,488) | (27,845) |
| Profit before tax | 3,787,704 | 5,194,185 |
| Taxation | (358,014) | (377,195) |
|
| ||
| Profit for the year | 3,429,690 | 4,816,990 |
| Earnings per ordinary share | ||
| Basic | 0.0207 | 0.0291 |
| Diluted | 0.0207 | 0.0291 |
GROUP BALANCE SHEET
| 2008 | 2007 | |
| US$ | US$ | |
| ASSETS | ||
| Non-current assets | ||
| Property, plant and equipment | 979,087 | 682,150 |
| Intangible assets | 5,109,922 | 3,680,683 |
| Investments | 4,402,842 | |
| Total non-current assets | 10,491,851 | 4,362,833 |
| Current assets | ||
| Inventories | 643,877 | 1,548,498 |
| Trade receivables | 6,283,869 | 3,490,923 |
| Other receivables | 3,707,876 | 3,798,672 |
| Investments | 1,463,143 | |
| Cash deposits | 460,276 | 283,094 |
| Cash and cash equivalents | 12,452,387 | 18,119,152 |
| Total current assets | 25,011,428 | 27,240,339 |
| Total assets | 35,503,279 | 31,603,172 |
| LIABILITIES & EQUITY | ||
| Current liabilities | ||
| Short term loans | 1,170,515 | - |
| Trade payables | 973,835 | 1,248,594 |
| Other payables | 1,790,061 | 337,073 |
| Deferred income | - | 126,369 |
| Total current liabilities | 3,934,411 | 1,712,036 |
| Non-current liabilities | ||
| Deferred tax | 647,126 | 289,287 |
| Total non-current liabilities | 647,126 | 289,287 |
| Total liabilities | 4,581,537 | 2,001,323 |
| Capital and reserves | ||
| Share capital | 424,023 | 424,023 |
| Share premium | 11,283,551 | 11,283,551 |
| Merger reserve | (1,118,051) | (1,118,051) |
| Other reserves | 7,785,172 | 8,336,500 |
| Retained earnings | 12,547,047 | 10,675,826 |
| Total shareholders' equity | 30,921,742 | 29,601,849 |
|
| ||
| Total liabilities & equity | 35,503,279 | 31,603,172 |
COMPANY BALANCE SHEET
| 2008 | 2007 | |
| US$ | US$ | |
| ASSETS | ||
| Non-current assets | ||
| Investments | 258,755 | 357,302 |
| Total non-current assets | 258,755 | 357,302 |
| Current assets | ||
| Other receivables | 6,747,506 | 9,400,460 |
| Cash and cash equivalents | 8,126,015 | 4,030,382 |
| Total current assets | 14,873,521 | 13,430,842 |
| Total assets | 15,132,276 | 13,788,144 |
| LIABILITIES & EQUITY | ||
| Current liabilities | ||
| Other payables | 114,625 | 27,889 |
| Total current liabilities | 114,625 | 27,889 |
| Total liabilities | 114,625 | 27,889 |
| Capital and reserves | ||
| Share capital | 424,023 | 424,023 |
| Share premium | 11,283,551 | 11,283,551 |
| Other reserves | (2,300,985) | 2,868,889 |
| Retained earnings | 5,611,062 | (816,208) |
| Total shareholders' equity | 15,017,651 | 13,760,255 |
|
| ||
| Total liabilities & equity | 15,132,276 | 13,788,144 |
GROUP CASHFLOW STATEMENT
| 2008 | 2007 | |
| US$ | US$ | |
| Operating activities | ||
| Income before taxation from continuing operations | 3,787,704 | 5,194,185 |
| Adjustments for: | ||
| Interest income | (671,089) | (439,185) |
| Interest expense | 2,303 | - |
| Exchange difference | 18,488 | 27,845 |
| Investments | - | (35,509) |
| Gain on disposal of quoted securities | (158,166) | (1,353,211) |
| Impairment loss in receivables | 90,597 | 69,157 |
| Depreciation of property, plant and equipment | 165,870 | 75,085 |
| Amortisation for intangible assets | 1,592,818 | 967,522 |
| Operating cash generated before working capital changes | 4,828,525 | 4,505,889 |
| Decrease (increase) in inventories | 904,621 | (1,319,614) |
| Increase in trade and other receivables | (2,702,150) | (892,711) |
| Increase in trade and other payables | 1,178,229 | 476,418 |
| (Decrease) in deferred income | (126,369) | - |
| Cash generated by operations | 4,082,856 | 2,769,982 |
| Income taxes paid | (128,065) | (16,125) |
| Interest paid | (2,303) | - |
| NET CASH GENERATED FROM OPERATING ACTIVITIES | 3,952,488 | 2,753,857 |
| Investing activities | ||
| Interest received | 671,089 | 439,185 |
| Proceeds on disposal of trading investment | 463,730 | 3,169,208 |
| Purchase of property, plant and equipment | (418,824) | (335,097) |
| Purchase of intangible assets | (2,797,073) | (2,440,609) |
| Entrust loans made | (5,865,985) | - |
| Purchase of investments for trading | (305,564) | (1,484,429) |
| Increase in pledged bank deposits | (177,182) | (111,742) |
| NET CASH USED IN INVESTING ACTIVITIES | (8,429,809) | (763,484) |
| Financing activities | ||
| Proceeds from short-term bank loans | 1,170,515 | - |
| Dividend paid | (1,027,075) | - |
| NET CASH GENERATED FROM FINANCING ACTIVITIES | 143,440 | - |
| NET (DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS | (4,333,881) | 1,990,373 |
| Effect of exchange rate changes | (1,332,884) | 1,098,296 |
| CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR | 18,119,152 | 15,030,483 |
| CASH AND CASH EQUIVALENTS AT THE END OF YEAR | 12,452,387 | 18,119,152 |
GROUP STATEMENT OF SHAREHOLDERS'FUNDS AND STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
| Share capital | Share premium | Merger reserve | Other reserves | Retained earnings | Total | |
| US$ | US$ | US$ | US$ | US$ | US$ | |
| Balance at 31 December 2006 | 424,023 | 11,283,551 | (1,118,051) | 3,956,096 | 8,826,929 | 23,372,548 |
| Profit for the year | - | - | - | - | 4,816,990 | 4,816,990 |
| Transfer to statutory reserve | - | - | - | 404,109 | (404,109) | - |
| Effect of exchange rates | - | - | - | 1,412,311 | - | 1,412,311 |
| Transfer to capital reserve | - | - | - | 2,563,984 | (2,563,984) | - |
|
|
|
|
|
|
| |
| Balance at 31 December 2007 | 424,023 | 11,283,551 | (1,118,051) | 8,336,500 | 10,675,826 | 29,601,849 |
| Profit for the year | - | - | - | - | 3,429,690 | 3,429,690 |
| Transfer to statutory reserve | - | - | - | 531,394 | (531,394) | - |
| Effect of exchange rates | - | - | - | (1,082,722) | - | (1,082,722) |
| Dividend payable on common stock | - | - | - | - | (1,027,075) | (1,027,075) |
| Balance at 31 December 2008 | 424,023 | 11,283,551 | (1,118,051) | 7,785,172 | 12,547,047 | 30,921,742 |
NOTES TO THE FINANCIAL STATEMENTS
1. FINANCIAL INFORMATION
The financial information set out in this announcement does not constitute the Company's statutory accounts for the years ended 31 December 2008. The statutory accounts for the year ended 31 December 2008 will be finalised on the basis of the financial information presented by the directors in this preliminary announcement and will be delivered to the Registrar of Companies.
2. REVENUE AND SEGMENTAL ANALYSIS
The Group's operations are organised into one operating division namely software development which includes sales of software products and system integration.
| Group | ||
| 2008 | 2007 | |
| US$ | US$ | |
| Software | 7,862,890 | 6,540,438 |
| System integration | 3,767,250 | 3,540,268 |
| VAT rebate | 447,984 | 534,967 |
| 12,078,124 | 10,615,673 |
The Group's revenue and profit before taxation were all derived from its principal activity. All revenue originates in the People's Republic of China.
3. OTHER INCOME
| Group | ||
| 2008 | 2007 | |
| US$ | US$ | |
| Gain on disposal of quoted securities | 158,166 | 1,353,211 |
| Investment income | - | 35,509 |
| Government grants and rebates | 306,195 | 353,960 |
| Interest on entrusted loans | 155,457 | - |
| Other income | 1,156 | 1,973 |
| 620,974 | 1,744,653 |
4. EARNINGS PER SHARE
| 2008 | 2007 | |
| Profit for the year | US$ 3,429,690 | US$ 4,816,990 |
| Number of shares - weighted average - basic | 165,582,189 | 165,582,189 |
| Basic earnings per share | US$ 0.0207 | US$ 0.0291 |
| Number of shares - weighted average - diluted | 165,582,189 | 165,582,189 |
| Diluted earnings per share | US$ 0.0207 | US$ 0.0291 |
5. DIVIDEND
Subject to approval at the forthcoming AGM, the Company will declare a dividend of 0.31p per ordinary share. The dividend will be paid to shareholders on the register on 5 June 2009. The Company's shares will trade 'Ex-dividend' on 3 June 2009 and the proposed payment date is 6 July 2009.
6. TIMETABLE AND DISTRIBUTION OF ACCOUNTS
The report and financial statements together with the Notice of AGM and Proxy form will be despatched to shareholders in June. The annual general meeting will be held at 10 am on 30 June 2009 at the offices of the Tavistock Communications, 131 Finsbury Pavement, London, EC2A 1NT.
Additional copies of the Annual Report and Accounts, Notice of AGM and Proxy Form may be requested directly from the Company and will be available following distribution to shareholders on the Company's website www.sinosoft-technology.com.