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Non-current assets

Non-current assets amounted to approximately S$42.5 million or 76.7% of total assets and S$44.5 million or 76.5% of total assets as at 30 June 2011 and 30 September 2011 respectively. Non-current assets comprise investment in associate, property, plant and equipment, intangible assets, non-current trade receivables and deposits.

Investment in associate

Investment in associate amounted to approximately S$15.1 million or 27.3% of total assets and S$16.1 million or 27.7% of total assets as at 30 June 2011 and 30 September 2011 respectively. Investment in associate relates to our Company’s 10% equity stake in China Stem Cells (South) Company Limited

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

RESULTS OF OPERATIONS AND FINANCIAL CONDITION

which was acquired in 30 October 2009. The increase in investment in associate from 30 June 2011 was due to the increase in profits recorded by China Stem Cells (South) Company Limited during 1Q2012.

Property, plant and equipment

Property, plant and equipment amounted to approximately S$4.3 million or 7.8% of total assets and S$4.6 million or 7.9% of total assets as at 30 June 2011 and 30 September 2011 respectively. Property, plant and equipment comprise mainly furniture and fittings, laboratory equipment, office equipment, motor vehicles, leasehold improvements and construction-in-progress. The increase in property, plant and equipment was mainly attributable to construction-in-progress of approximately S$0.4 million relating to the properties at A’Posh Bizhub.

Intangible assets

Intangible assets comprise computer software which amounted to S$11,000 and S$23,000 as at 30 June 2011 and 30 September 2011 respectively.

Non-current trade receivables

Non-current trade receivables amounted to approximately S$22.9 million or 41.3% of total assets and S$23.5 million or 40.4% of total assets as at 30 June 2011 and 30 September 2011 respectively. Non-current trade receivables represents Cord Blood Banking Services revenue receivable under annual, five year and ten year plans that have yet to be billed to the customer. Upon billing, the billed amount will be receivable under the same terms as current trade receivables. The increase in our non-current trade receivables of approximately S$0.6 million from 30 June 2011 was mainly due to the cumulative effect of the number of client deliveries in 1Q2012. For more details on the termination rights of our customers, please refer to the section titled “Risk Factors — Our financial condition and results of operations may be materially adversely affected if a significant number of our customers who choose our long-term payment plans default on their payment or choose to terminate their contracts” of this Prospectus. For the avoidance of doubt, both current and non-current trade receivables (if applicable) will be written-down in the event of default or early termination by our customer due to retrieval of the cord blood unit for use or transfer of our storage facility. Please refer to the section titled “Credit Policy” of this Prospectus for the amount of write-downs during the Periods Under Review.

Deposits

Rental deposits with our landlords amounted to approximately S$0.2 million or 0.4% of total assets as at 30 June 2011 and 30 September 2011.

Current assets

Current assets amounted to approximately S$12.9 million or 23.3% of total assets and S$13.7 million or 23.5% of our total assets as at 30 June 2011 and 30 September 2011 respectively. Current assets comprise cash and cash equivalents, other financial assets, trade receivables, other receivables, prepayments and inventories.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

RESULTS OF OPERATIONS AND FINANCIAL CONDITION

Cash and cash equivalents

Cash and cash equivalents amounted to approximately S$4.0 million or 7.2% of total assets and S$4.7 million or 8.2% of total assets as at 30 June 2011 and 30 September 2011 respectively. The increase in cash and cash equivalents of approximately S$0.7 million was due mainly to generation of cash from operations.

Other financial assets

Other financial assets amounted to approximately S$1.3 million or 2.3% of total assets and S$1.3 million or 2.2% of total assets as at 30 June 2011 and 30 September 2011 respectively. Other financial assets comprise mainly term deposits placed with a bank with a maturity period of more than 3 months.

Trade receivables

Trade receivables amounted to approximately S$6.8 million or 12.3% of total assets and S$6.1 million or 10.5% of total assets as at 30 June 2011 and 30 September 2011 respectively.

Other receivables

Other receivables amounted to approximately S$0.3 million or 0.5% of total assets and S$0.8 million or 1.3% of total assets as at 30 June 2011 and 30 September 2011 respectively. Other receivables comprise mainly deposits, tax recoverable and amount due from the CBB Group. The increase was mainly due to an increase in the amount due from the CBB Group of approximately S$0.4 million. The CBB Group collects customer payments on our behalf pursuant to the arrangements under the Co-operation Agreement. As at the Latest Practicable Date, the S$0.4 million owing from the CBB Group has been settled.

Prepayments

Prepayments amounted to approximately S$0.3 million or 0.5% of total assets and S$0.4 million or 0.8% of total assets as at 30 June 2011 and 30 September 2011 respectively. The increase was mainly attributable to prepaid professional fees in connection with the Invitation in 1Q2012.

Inventories

Inventories amounted to approximately S$0.2 million or 0.4% of total assets and S$0.3 million or 0.5% of total assets as at 30 June 2011 and 30 September 2011 respectively. Inventories comprise mainly Sepax®separation kits, triple bags and overwrap bags used in processing and storage of stem cells.

Current liabilities

Current liabilities amounted to approximately S$8.0 million or 54.1% of total liabilities and S$7.5 million or 49.2% of total liabilities as at 30 June 2011 and 30 September 2011 respectively. Current liabilities comprise trade and other payables, deferred revenue, tax payable, finance lease liabilities and interest-bearing borrowings.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

RESULTS OF OPERATIONS AND FINANCIAL CONDITION

Trade and other payables

Trade and other payables amounted to approximately S$2.3 million or 15.5% of total liabilities and S$2.3 million or 15.4% of total liabilities as at 30 June 2011 and 30 September 2011 respectively. Trade and other payables are non-interest bearing and are normally settled on 30-day terms.

Deferred revenue

Deferred revenue amounted to approximately S$3.7 million or 25.0% of total liabilities and S$3.0 million or 20.1% of total liabilities as at 30 June 2011 and 30 September 2011 respectively. Deferred revenue represents revenue received in advance for services to be rendered under cord blood banking and umbilical cord tissue banking contracts. The decrease in deferred revenue was mainly attributable to a decrease in the number of customers who have signed up but not yet delivered as at 30 September 2011 as compared to 30 June 2011.

Tax payable

Tax payable amounted to approximately S$2.0 million or 13.5% of total liabilities and S$2.0 million or 13.2% of total liabilities as at 30 June 2011 and 30 September 2011 respectively.

Finance lease liabilities

Finance lease liabilities amounted to S$15,000 as at 30 June 2011 and 30 September 2011.

Interest-bearing borrowings

Interest-bearing borrowings amounted to approximately S$47,000 or 0.3% of total liabilities and S$61,000 or 0.4% of total liabilities as at 30 June 2011 and 30 September 2011 respectively. The interest-bearing borrowings relate to the bank loan secured to acquire the properties at A’Posh Bizhub for our own business use and they are currently under construction. The increase is due to the current portion of additional loan drawn down during 1Q2012.

Non-current liabilities

Non-current liabilities amounted to approximately S$6.8 million or 45.9% of total liabilities and S$7.7 million or 50.8% of total liabilities as at 30 June 2011 and 30 September 2011 respectively. Non-current liabilities comprise non-current deferred revenue, non-current finance lease liabilities, deferred tax liabilities and non-current interest-bearing borrowings.

Non-current deferred revenue

Non-current deferred revenue amounted to approximately S$5.9 million or 39.9% of total liabilities and S$6.4 million or 42.3% of total liabilities as at 30 June 2011 and 30 September 2011 respectively. Non-current deferred revenue represents the non-current portion of the revenue received in advance for services to be rendered under cord blood banking and umbilical cord tissue banking contracts. Non-current deferred revenue increased mainly due to the cumulative effect of the number of client deliveries in 1Q2012.

Non-current finance liabilities

Non-current finance liabilities amounted to S$6,000 and S$3,000 as at 30 June 2011 and 30 September

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

RESULTS OF OPERATIONS AND FINANCIAL CONDITION

Deferred tax liabilities

Deferred tax liabilities amounted to approximately S$0.1 million or 0.7% of total liabilities and S$0.1 million or 0.9% of total liabilities as at 30 June 2011 and 30 September 2011 respectively.

Non-current interest-bearing borrowings

Non-current interest-bearing borrowings amounted to approximately S$0.8 million or 5.4% of total liabilities and S$1.2 million or 7.6% of total liabilities as at 30 June 2011 and 30 September 2011 respectively. Non-current interest-bearing borrowings relate to the non-current portion of the bank loan secured to acquire the properties at A’Posh Bizhub for our own business use and properties are currently under construction. The increase in non-current interest-bearing borrowings of approximately S$0.4 million was mainly due to the drawdown of additional loans during 1Q2012.

Capital and reserves

Capital and reserves amounted to approximately S$40.6 million and S$43.0 million as at 30 June 2011 and 30 September 2011 respectively. Capital and reserves comprises share capital, accumulated profit and reserves. Reserves consist of capital reserve, merger reserve, acquisition reserve and foreign currency translation reserve. The increase in capital and reserves of approximately S$2.4 million was mainly due to an increase in our accumulated profit of approximately S$1.8 million and an increase of foreign currency translation reserve of approximately S$0.6 million.

LIQUIDITY AND CAPITAL RESOURCES