Company Overview - Kinergy Corporation reported a focus on low-volume, high-mix manufacturing for semiconductor processing equipment, indicating a labor-intensive assembly process[10]. - The company operates two main divisions: Electronic Manufacturing Services and Original Design Manufacturing, catering primarily to the semiconductor industry[9]. - Kinergy has achieved ISO 9001:2015 certification for its quality management system, ensuring compliance with product performance and safety standards[15]. - The company has manufacturing facilities in Singapore, China, and the Philippines, with marketing offices in Japan and Malaysia, highlighting its regional market expansion[15]. - Kinergy has been recognized as a winner of the Enterprise 50 award three times, showcasing its competitive standing in the industry[15]. - The Original Design Manufacturing division designs and manufactures automation equipment and precision tool components, primarily for the semiconductor sector[8]. - The Electronic Manufacturing Services division produces subsystems, complete machines, and components, with a focus on customer-specific designs and improvements[10]. - Kinergy emphasizes cost-effective and timely delivery of high-quality products, supported by continuous improvement initiatives[15]. - The company’s engineering capabilities span various fields, including precision dynamics and electronic control, enhancing its competitive edge[15]. - Kinergy's product offerings include automation equipment, precision tools, and components, tailored to meet the specific needs of its clients in the semiconductor industry[12]. Financial Performance - For the fiscal year ending December 31, 2019, the company's revenue decreased by 44.9% to approximately SGD 67.6 million[31]. - The company's EBITDA for the same period was approximately SGD 0.8 million despite the revenue decline[31]. - As of December 31, 2019, the total assets amounted to SGD 107.954 million, with total liabilities of SGD 18.287 million[19]. - The net asset value of the company was SGD 89.7 million, with cash and cash equivalents of SGD 36.1 million[31]. - The electronic manufacturing services segment generated revenue of SGD 60.2 million, down 45.6% from SGD 110.8 million in the previous year[43]. - The original design manufacturing segment's revenue fell by 38.6% to SGD 7.4 million from SGD 12.0 million in 2018[43]. - Gross profit decreased to approximately SGD 8.5 million, down SGD 12.9 million from SGD 21.4 million in 2018, resulting in a gross margin of 12.5%, down from 17.4%[46]. - The company recorded a pre-tax loss of approximately SGD 1.9 million for the year, compared to a pre-tax profit of SGD 11.3 million in 2018[53]. - Other income decreased to approximately SGD 1.4 million from SGD 4.9 million in 2018, primarily due to foreign exchange losses[48]. - The net cash generated from operating activities for the year ended December 31, 2019, was approximately SGD 9.7 million, reflecting a decrease from SGD 10.5 million in 2018[58]. - The net cash used in investing activities for the year was approximately SGD 13.9 million, primarily for the purchase of investment securities amounting to SGD 11.0 million[60]. - The net cash used in financing activities was approximately SGD 2.9 million, mainly for lease liabilities and dividend payments[62]. - The company's current assets decreased from approximately SGD 74.5 million as of December 31, 2018, to SGD 57.0 million as of December 31, 2019, a reduction of about SGD 17.5 million[63]. - Capital expenditures related to the purchase of property, plant, and equipment amounted to approximately SGD 3.2 million for the year ended December 31, 2019[64]. - As of December 31, 2019, the company had unrecognized capital commitments of SGD 14.3 million, including SGD 112,000 for property, plant, and equipment[66]. - The leverage ratio as of December 31, 2019, was 0.03, indicating low debt levels relative to equity[72]. Market Challenges and Opportunities - The company anticipates ongoing challenges in the business environment due to the US-China trade tensions and the COVID-19 pandemic[33]. - Revenue from the semiconductor industry is expected to be impacted by uncertainties leading to delayed deliveries and reduced customer orders[31]. - The company aims to explore opportunities through joint ventures, strategic partnerships, and acquisitions to expand its business and acquire new markets[33]. - The company anticipates recovery in the semiconductor market as trade tensions ease and inventory levels normalize[41]. - The company has developed a business continuity plan to address potential disruptions caused by the COVID-19 pandemic[40]. Corporate Governance - The company has adhered to all provisions of the Corporate Governance Code for the year ending December 31, 2019[133]. - The board consists of nine members, including four executive directors and three independent non-executive directors, ensuring a diverse and effective governance structure[138]. - The board is responsible for strategic policy formulation and oversight of operations, including the approval of significant transactions and financial performance[142]. - All directors confirmed compliance with the Standard Code for securities trading during the year[135]. - The company emphasizes continuous professional development for directors, with all directors participating in relevant training during the fiscal year[149]. - The chairman and CEO roles are held by separate individuals, ensuring a clear division of responsibilities[148]. - The board has reviewed various governance-related documents, including the Corporate Governance Report and risk management reports, to ensure compliance and transparency[147]. - The company is committed to improving its corporate governance practices to enhance shareholder value[142]. - The independent non-executive directors possess the necessary independence and qualifications as per listing rules[140]. - The company has established a robust internal control and compliance framework to uphold governance standards[146]. - The board of directors attended all meetings, with executive directors achieving 100% attendance in board meetings[27]. - The audit committee held two meetings during the year, focusing on financial reporting and risk management[158]. - The nomination committee met twice to review board structure and diversity, ensuring a balanced skill set among directors[159]. - The company adopted a director nomination policy to ensure a diverse and skilled board[162]. - The company’s governance practices comply with the corporate governance code and listing rules[157]. - The independent non-executive directors participated actively in committee meetings, with full attendance reported[27]. - The company emphasizes the importance of independent judgment and conflict of interest management among directors[162]. - The board is committed to regular reviews of its succession planning and director appointments[162]. - The company’s audit committee includes members with appropriate financial management expertise[158]. - The board's composition is designed to enhance decision-making and accountability within the company[162]. - The board has adopted a diversity policy to enhance competitive advantage, considering various factors such as professional experience, cultural background, and gender in board member selection[165]. Employee and Management - The company reported a total employee benefit expenditure of approximately SGD 15.9 million for the year ending December 31, 2019, with 504 employees on staff[81]. - The company employs a total of 452 full-time employees across its operations in Singapore and Nantong as of December 31, 2019[200]. - The management team has a diverse educational background, with degrees from institutions such as the University of Peradeniya and Fudan University, contributing to their expertise in the field[106][107]. - The company has a strong leadership team with extensive backgrounds in semiconductor and electronics industries, including Henry Lee Wong as COO and Ken Ong as VP of Global Supply Chain Management[109][112]. - The company is focused on strategic development and operational performance, with a commitment to enhancing customer relationships and business growth[111][115]. - The management has a history of involvement in significant projects, including a $1.5 billion defense project during Wong's tenure at General Motors[110]. - The company is committed to maintaining high standards in supplier quality and logistics management as part of its operational strategy[114]. - The leadership team emphasizes the importance of supply chain management and operational efficiency, with a focus on end-to-end supply chain activities[114]. - The company is focused on new product development and innovation, leveraging the extensive experience of its engineering team[118]. - The engineering director has over 34 years of experience in the electronics and semiconductor engineering industry, which enhances the company's innovation capabilities[118]. - The manufacturing director has over 22 years of experience in the semiconductor industry, focusing on contract manufacturing operations in Singapore and Nantong[121]. - The quality control director has over 35 years of experience in electronics, semiconductors, and automation, ensuring high standards in product quality management[124]. - The finance manager has over 22 years of accounting experience, which supports the company's financial integrity and operational efficiency[129]. Quality Assurance and Compliance - The company has implemented a quality assurance system in its production processes, ensuring compliance with ISO 9001:2015 standards[192]. - The company provides a one-year warranty for craftsmanship defects on its products, reflecting its dedication to customer satisfaction[195]. - The company has established a robust internal audit and management review process to maintain quality standards[192]. - The company’s production facilities in Singapore and Nantong have passed ISO 9001:2015 certification, ensuring high-quality manufacturing practices[192]. - The company has a structured approach to addressing quality issues, involving engineering, production, and quality assurance teams[195]. - The company has established a quality engineering team responsible for supplier qualification assessments and audits, ensuring compliance with company standards[196]. - The company conducts annual reviews of its approved supplier list to maintain quality and compliance with its procurement policies[196]. - The company implements a conflict minerals procurement policy to ensure that materials used do not originate from conflict-affected regions, in compliance with the Dodd-Frank Act[196]. - The company has set up information restricted areas for sensitive data and maintains a record of all system activities to protect customer intellectual property[197]. Corporate Social Responsibility - The company emphasizes its commitment to corporate social responsibility, focusing on sustainable economic, social, and environmental development[182]. - The company has been actively involved in community-beneficial activities, supporting various initiatives[182].
精技集团(03302) - 2019 - 年度财报