Market Conditions - The construction market in Singapore contracted by 3.4% in 2018, with a significant decline in public sector construction activities contributing to this downturn [10]. - The company anticipates continued volatility in the Singapore construction market, influenced by global economic conditions [11]. - The Singapore construction industry faced challenges due to government housing price control measures and the suspension of the Kuala Lumpur-Singapore High-Speed Rail project [10]. Financial Performance - The company's revenue decreased by 49.5% from approximately SGD 37.6 million in the previous fiscal year to about SGD 19.0 million for the year ended December 31, 2018 [16]. - Gross profit fell by 57.6% from approximately SGD 14.4 million to about SGD 6.1 million, with a gross margin decline of 6.2% from 38.3% to 32.1% [16][22]. - The net profit margin dropped by 87.0%, with net profit declining from approximately SGD 5.4 million to SGD 0.7 million [16]. - The company recorded a significant decline in earnings per share, falling by 89.3% from SGD 0.84 to SGD 0.09 [16]. - Revenue from private sector projects decreased from approximately SGD 26.8 million to about SGD 11.0 million, contributing 57.9% of total revenue in 2018 [18]. - Revenue from public sector projects slightly decreased from approximately SGD 10.8 million to about SGD 8.0 million, contributing 42.1% of total revenue in 2018 [19]. - The distributable reserves available to shareholders as of December 31, 2018, were approximately SGD 22,838,000, compared to SGD 23,137,000 in 2017 [81]. - The group made charitable donations totaling SGD 33,905 during the year, a decrease from SGD 104,407 in 2017 [86]. Project Management and Operations - The company has submitted six bids totaling approximately SGD 133.5 million, with ongoing bids amounting to about SGD 382.5 million [11]. - The number of ongoing projects as of December 31, 2018, was eight, with a total contract value of approximately SGD 76.8 million, of which about SGD 51.6 million has been recognized as revenue [13]. - The company is focused on developing its major customer and supplier partnerships and expanding new business opportunities [47]. - The company has adopted a cautious approach to manage operating costs and improve business efficiency in a competitive environment [6]. - The company aims to maintain competitiveness by actively participating in local construction projects and engaging directly with general contractors [11]. Cost Management - Management is focusing on cost control and operational efficiency improvements until the construction market recovers [11]. - Service costs decreased by 44.2% from approximately SGD 23.1 million to about SGD 12.9 million due to a reduction in the number of projects undertaken [21]. - Administrative expenses increased by 2.2% from approximately SGD 4.5 million to about SGD 4.6 million, primarily due to additional costs associated with being a listed company [23]. Shareholder and Governance - The group did not recommend the distribution of a final dividend for the year ended December 31, 2018 [28]. - The company has established a remuneration committee to formulate its remuneration policy based on operational performance and market practices [112]. - Directors' remuneration requires shareholder approval at the annual general meeting, with other remuneration determined by the board based on recommendations from the remuneration committee [113]. - The company has maintained indemnity provisions for directors and senior management, ensuring protection against liabilities incurred in the course of their duties [115]. - The board consists of six directors, including three executive directors and three independent non-executive directors [141]. Risk Management - The company faces significant risks due to the non-recurring nature of its projects, which may impact its financial performance if new projects are not secured [101]. - The company faces risks related to delayed payments or non-payment of receivables, which could significantly impact cash flow and working capital [102]. - The company has implemented policies to assess credit risk and determine credit limits for new customers to mitigate credit risk [102]. Human Resources - The majority of the company's workforce consists of foreign employees, and any shortage or increased costs related to foreign labor could adversely affect operations and financial performance [106]. - The company regularly evaluates its human resources to ensure sufficient labor is available to meet project needs [106]. Corporate Governance - The company has adopted a code of conduct for directors' securities transactions, ensuring compliance with the listing rules [139]. - The board is responsible for leading and controlling the company, overseeing business strategy and performance [151]. - The company emphasizes the importance of diverse backgrounds and experiences among board members to enhance decision-making processes [182]. - The Nomination Committee evaluates potential board candidates based on various criteria, including qualifications, skills, experience, and diversity factors such as gender and age [176]. Audit and Compliance - The financial statements for the year were audited by Deloitte & Touche LLP [135]. - The audit committee engaged Baker Tilly Consultancy to review the internal control system's adequacy and effectiveness for the period from January 1, 2018, to December 31, 2018, and found no significant deficiencies [192]. - The company has outsourced its internal audit function and appointed an independent internal control consultant to assess overall internal controls [195].
守益控股(02227) - 2018 - 年度财报