Unaudited Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income This statement presents the group's financial performance, showing a significant increase in revenue but also a substantial rise in losses for the three months ended September 30, 2021 Summary of Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (For the three months ended September 30) | Indicator | 2021 (SGD) | 2020 (SGD) | Change (SGD) | Change Rate | | :------------- | :---------------- | :---------------- | :-------------- | :----- | | Revenue | 4,779,288 | 1,049,173 | 3,730,115 | 355.5% | | Cost of Sales/Services | (3,427,417) | (548,805) | (2,878,612) | 524.5% | | Gross Profit | 1,351,871 | 500,368 | 851,503 | 170.2% | | Other Income | 37,608 | 118,856 | (81,248) | -68.4% | | Administrative Expenses | (1,704,645) | (593,718) | (1,110,927) | 187.1% | | Other Gains and Losses | (184,947) | (172,298) | (12,649) | 7.3% | | Finance Costs | (32,633) | (6,662) | (25,971) | 389.8% | | Loss Before Tax | (532,746) | (153,454) | (379,292) | 247.2% | | Income Tax (Expense) Recovery | (43,931) | 57,901 | (101,832) | -175.9% | | Loss for the Period | (576,677) | (95,553) | (481,124) | 503.5% | | Basic and Diluted Loss Per Share (SGD cents) | (0.06) | (0.01) | (0.05) | 500.0% | Unaudited Condensed Consolidated Statement of Changes in Equity This statement details changes in the group's equity components, including share capital, reserves, and accumulated profits, for the three months ended September 30, 2021 Summary of Condensed Consolidated Statement of Changes in Equity (For the three months ended September 30, 2021) | Item | Share Capital (SGD) | Share Premium (SGD) | Merger Reserve (SGD) | Exchange Reserve (SGD) | Accumulated Profits (SGD) | Total Attributable to Owners of the Company (SGD) | Non-controlling Interests (SGD) | Total (SGD) | | :--------------- | :-------------- | :------------------ | :------------------ | :------------------ | :------------------ | :------------------------------ | :-------------------- | :-------------- | | Balance as at July 1, 2021 | 1,372,630 | 8,593,078 | 524,983 | (2,215) | 3,969,296 | 14,457,772 | 108,948 | 14,566,720 | | Loss for the Period | - | - | - | - | (494,333) | (494,333) | (82,344) | (576,677) | | Other Comprehensive Income for the Period | - | - | - | 25,572 | - | 25,572 | 592 | 26,164 | | Issue of New Shares | 140,752 | 9,079,208 | - | - | - | 9,219,960 | - | 9,219,960 | | Non-controlling Interests | - | - | - | - | - | - | 84,144 | 84,144 | | Balance as at September 30, 2021 | 1,513,382 | 17,672,286 | 524,983 | 23,357 | 3,474,963 | 23,208,971 | 111,340 | 23,320,311 | Notes to the Unaudited Condensed Consolidated Financial Statements This section provides detailed explanations and disclosures supporting the unaudited condensed consolidated financial statements 1. General Information ISP Global Limited, listed on GEM, operates in Singapore (audio/communication systems, alarm services) and China (e-commerce for consumer goods), with financial statements presented in SGD - ISP Global Limited was incorporated in the Cayman Islands on July 21, 2017, and listed on GEM of the Hong Kong Stock Exchange on January 16, 201883 - The Company is an investment holding company, with operating subsidiaries primarily engaged in sales and related services of audio and communication systems, integrated audio and communication system services, alarm system services in Singapore, and e-commerce services and operations for selling consumer goods to external customers in China83 - The unaudited condensed consolidated financial statements are presented in Singapore Dollars (the Company's functional currency) and were approved by the Board of Directors on October 25, 202185 2. Basis of Preparation and Application of International Financial Reporting Standards ("IFRS") The group consistently applied IFRS effective for the fiscal year beginning July 1, 2021, with no significant impact expected from new standards yet to be adopted - The Group has consistently applied IFRS effective for the financial year commencing July 1, 2021, throughout the reporting period86 - Management expects that the future adoption of new and revised IFRS, which have been issued but are not yet effective, will not have a significant impact on the Group's financial statements in the period of initial application110 3. Revenue and Segment Information The group's revenue primarily stems from audio and communication systems and consumer goods sales, with total revenue reaching SGD 4.78 million, driven by significant growth in China's consumer goods segment - The Group's revenue is derived from sales and related services of audio and communication systems, integrated audio and communication system services, alarm system services, and e-commerce services and operations for selling consumer goods112 - The Group has two operating segments: sales and services of audio and communication systems, and sales of consumer goods114 Segment Revenue and Results (For the three months ended September 30, 2021) | Segment | Revenue (SGD) | Results (SGD) | | :----------------- | :-------------- | :-------------- | | Audio and Communication System Sales and Services | 1,846,468 | 352,466 | | Consumer Product Sales | 2,932,820 | (114,399) | | Total | 4,779,288 | 238,067 | Revenue by Geographical Location (For the three months ended September 30) | Region | 2021 Revenue (SGD) | 2020 Revenue (SGD) | | :----- | :-------------------- | :-------------------- | | Singapore | 1,845,474 | 1,049,173 | | China | 2,932,820 | – | | Other | 994 | – | | Total | 4,779,288 | 1,049,173 | 4. Other Income and Losses The group recorded a net other loss of SGD 0.18 million for the three months ended September 30, 2021, primarily due to net exchange losses and impairment losses on trade receivables Details of Other Income and Losses (For the three months ended September 30) | Item | 2021 (SGD) | 2020 (SGD) | | :------------------------- | :---------------- | :---------------- | | Net Exchange Losses | (104,485) | (99,897) | | Impairment Loss on Trade Receivables | (78,823) | (72,401) | | Impairment Loss on Write-off of Property, Plant and Equipment | (1,639) | – | | Total | (184,947) | (172,298) | 5. Finance Costs Finance costs significantly increased to SGD 32,633 for the three months ended September 30, 2021, primarily driven by higher interest on lease liabilities Details of Finance Costs (For the three months ended September 30) | Item | 2021 (SGD) | 2020 (SGD) | | :----------- | :---------------- | :---------------- | | Bank Loan Interest | 5,175 | 6,662 | | Lease Liabilities Interest | 27,458 | – | | Total | 32,633 | 6,662 | 6. Loss Before Tax Loss before tax expanded to SGD 0.53 million for the three months ended September 30, 2021, mainly due to increased staff costs, material costs, and depreciation expenses Components of Loss Before Tax (For the three months ended September 30) | Item | 2021 (SGD) | 2020 (SGD) | | :------------------------- | :---------------- | :---------------- | | Total Staff Costs (including Directors' Emoluments) | 1,378,740 | 623,189 | | Material Costs | 2,937,362 | 128,868 | | Subcontractor Costs | 115,027 | 44,360 | | Depreciation of Property, Plant and Equipment | 211,643 | 132,669 | - Staff costs included in cost of sales/services amounted to SGD 375,028 (2020: SGD 276,503)145 7. Income Tax Expense (Recovery) The group recorded an income tax expense of SGD 43,931 for the three months ended September 30, 2021, a shift from a recovery in the prior year, primarily due to increased Singapore corporate income tax and new China corporate income tax Details of Income Tax Expense (Recovery) (For the three months ended September 30) | Item | 2021 (SGD) | 2020 (SGD) | | :------------------- | :---------------- | :---------------- | | Singapore Corporate Income Tax Expense (Recovery) | 42,583 | (43,880) | | China Corporate Income Tax | 966 | – | | Deferred Tax Provision (Utilisation) | 382 | (14,021) | | Total | 43,931 | (57,901) | - Singapore corporate income tax is provided at 17%146 8. Loss Per Share Basic and diluted loss per share attributable to owners expanded to SGD 0.06 cents for the three months ended September 30, 2021, with no dilutive securities Loss Per Share (For the three months ended September 30) | Indicator | 2021 (SGD) | 2020 (SGD) | | :------------------- | :---------------- | :---------------- | | Loss Attributable to Owners of the Company | (574,577) | (95,553) | | Weighted Average Number of Ordinary Shares | 863,478,261 | 800,000,000 | | Basic and Diluted Loss Per Share (SGD cents) | (0.06) | (0.01) | - Basic earnings per share is calculated based on the loss for the period attributable to owners of the Company and the weighted average number of ordinary shares outstanding154 - Diluted earnings per share is equal to basic earnings per share as the Group had no dilutive potential ordinary shares during the period and for the three months ended September 30, 2020154 9. Dividends No dividends were proposed or paid by the company or its subsidiaries for the three months ended September 30, 2021 - No dividends were proposed or paid by the Company or any of its subsidiaries during the period (for the three months ended September 30, 2020: zero Singapore Dollars)155 Management Discussion and Analysis This section provides an overview of the group's business development, financial performance, and future outlook, highlighting key operational and financial changes Business Development and Prospects The group's net loss expanded due to increased administrative and capital costs in the China e-commerce segment, with future plans to consolidate Singapore operations and pursue high growth in China's e-commerce and network system integration - The Group is primarily engaged in the sales, installation, and maintenance of audio and communication system solutions and alarm systems in Singapore, and e-commerce services and operations for selling consumer goods in China158 - During the period, the Group recorded a net loss of approximately SGD 576,700, compared to a net loss of approximately SGD 95,600 in the corresponding period of 2020, mainly due to increased staff administrative costs and capital-related expenses for business opportunities in the China e-commerce segment158 Outlook The group plans to strengthen its Singapore business in public healthcare and housing, while pursuing high growth in China's e-commerce and network system integration sectors - Singapore operations will focus on public tenders and maintaining new contracts, targeting the public healthcare and housing sectors, with sales and installation deliveries for existing contract projects expected to gradually resume as COVID-19 is treated as an endemic disease159161 - China's e-commerce business will seek high growth, expanding partnerships with Nordic and Western European brands based on principles of 'health, value, quality, and sustainability,' opening stores on mainstream e-commerce platforms like JD, Tmall, Pinduoduo, and Douyin, and focusing on building private domain e-commerce operations162165 - China's network system integration and core IT service system will provide solutions to government departments, financial institutions, and state-owned enterprises like railway and aviation, with plans to strengthen team building, expand service systems, develop industry clients, and enhance cooperation with industry resources, ultimately forming a comprehensive system integration service provider centered on IT services169172 Financial Review This section reviews key financial indicators, including significant revenue growth driven by China's e-commerce and Singapore's construction, alongside increased costs and expanded losses Revenue Revenue increased 3.6 times to approximately SGD 4.8 million, driven by new e-commerce services in China and increased audio and communication system projects in Singapore - Revenue increased 3.6 times from approximately SGD 1.0 million to approximately SGD 4.8 million176 - The primary growth drivers were new revenue streams from China's e-commerce services and an increase in audio and communication system sales and related service projects due to the resumption of construction works in Singapore176 Cost of Sales/Services Cost of sales/services increased 5.2 times to approximately SGD 3.4 million, primarily due to higher material deliveries for consumer product sales in China - Cost of sales/services increased 5.2 times from approximately SGD 0.5 million to approximately SGD 3.4 million177 - The increase in costs was mainly attributable to higher material deliveries for the consumer product sales segment to customers in China177 Gross Profit and Gross Margin Gross profit increased to approximately SGD 1.4 million, but gross margin decreased from 47.7% to 28.3%, primarily due to lower profitability in the consumer product sales segment - Gross profit increased from approximately SGD 0.5 million to approximately SGD 1.4 million178 - Gross margin decreased from 47.7% to 28.3%178 - The decrease in gross margin was mainly due to lower profitability in the consumer product sales segment178 Other Income, Gains and Losses Other income, gains, and losses increased from a loss of approximately SGD 53,400 to a loss of approximately SGD 147,300, mainly due to reduced government subsidies and increased exchange losses - Other income, gains, and losses increased from a loss of approximately SGD 53,400 to a loss of approximately SGD 147,300181 - The increase was mainly due to a decrease in Singapore government subsidy income and an increase in exchange losses recognized from transactions settled in USD and HKD181 Administrative Expenses Administrative expenses increased 1.9 times to approximately SGD 1.7 million, primarily due to higher staff costs from an increased headcount in the consumer product sales segment - Administrative expenses increased 1.9 times from approximately SGD 0.6 million to approximately SGD 1.7 million182 - The increase was mainly due to higher staff costs resulting from an increased headcount in the consumer product sales segment182 Finance Costs Finance costs increased 3.9 times to approximately SGD 32,600, primarily due to lease liabilities associated with the repayment of leased office space - Finance costs increased 3.9 times from approximately SGD 6,700 to approximately SGD 32,600183 - The increase was mainly due to lease liabilities related to the repayment of right-of-use assets for leased office space183 Income Tax Expense (Recovery) Income tax shifted from a recovery of approximately SGD 57,900 in 2020 to an expense of approximately SGD 43,900, an increase of approximately SGD 101,800, due to a reversal of over-provision and higher tax expenses from increased profit before tax - Income tax shifted from a recovery of approximately SGD 57,900 in the corresponding period of 2020 to an expense of approximately SGD 43,900 in the reporting period, an increase of approximately SGD 101,800187 - The change was mainly due to the reversal of over-provision for income tax expense of a Singapore subsidiary in 2020 and an increase in tax expense resulting from higher profit before tax in the reporting period187 Loss for the Period Loss for the period expanded from approximately SGD 95,600 to approximately SGD 576,700, primarily due to increased administrative and capital costs in the new China e-commerce segment, partially offset by improved performance in audio and communication systems - Loss for the period expanded from approximately SGD 95,600 to approximately SGD 576,700188 - The increase in loss was mainly due to increased staff administrative costs and capital expenses for business opportunities in the new China e-commerce segment188 - Partially offset by improved performance in the audio and communication system sales and related services segment188 Dividends The Board of Directors did not recommend the payment of any dividends for the reporting period - The Board of Directors did not recommend the payment of any dividends during the period (for the three months ended September 30, 2020: zero Singapore Dollars)189 Comparison of Use of Proceeds from Listing Shares and Business Objectives with Actual Business Progress Of the HKD 44.0 million net proceeds from listing shares, HKD 23.4 million has been utilized, with delays in certain initiatives like marketing and new office setup due to COVID-19, and remaining funds expected to be used by June 30, 2023 - Net proceeds from listing shares were approximately HKD 44.0 million; as of September 30, 2021, HKD 23.4 million had been utilized, with HKD 20.6 million unutilized, representing a utilization rate of 53.2%193 Use of Listing Proceeds and Progress (As of September 30, 2021) | Description | Designated Amount (HKD million) | Actual Use (HKD million) | Unutilized Amount (HKD million) | Utilization Rate | Expected Date of Full Utilization | | :------------------------------------------------ | :-------------------------- | :------------------ | :-------------------- | :--------- | :--------------- | | Strengthening Marketing Efforts in Singapore's Audio and Communication Industry | 1.4 | 0.5 | 0.9 | 35.7% | December 31, 2022 | | Expanding and Training Sales & Marketing, Technical, and Support Personnel | 11.6 | 8.2 | 3.4 | 70.7% | June 30, 2023 | | Purchasing Vehicles | 3.0 | 0.5 | 2.5 | 16.7% | June 30, 2023 | | Establishing New Sales Offices in Singapore | 10.0 | – | 10.0 | 0.0% | June 30, 2022 | | Repaying Part of Bank Loans | 10.0 | 10.0 | Zero | 100.0% | Not Applicable | | Providing Resources for Performance Guarantees | 2.0 | 0.7 | 1.3 | 35.0% | June 30, 2023 | | Obtaining Higher Grades for Mechanical and Electrical Works | 2.5 | – | 2.5 | 0.0% | June 30, 2023 | | General Working Capital and General Corporate Purposes | 3.5 | 3.5 | Zero | 100.0% | Not Applicable | | Total | 44.0 | 23.4 | 20.6 | 53.2% | | - The delay in using the proceeds and business expansion has not had any significant adverse impact on the Group's operations, but the Board will continue to closely monitor the impact of the COVID-19 pandemic on the timetable for using the unutilized proceeds256 Comparison of Use of Proceeds from Placing Shares and Business Objectives with Actual Business Progress Of the HKD 52.35 million net proceeds from placing shares, HKD 31.16 million has been utilized, primarily for inventory and equipment for China's e-commerce business, with remaining funds expected to be fully used by June 2022 - Net proceeds from placing shares amounted to approximately HKD 52,347,000; as of September 30, 2021, HKD 31,157,510 had been utilized, representing 59.5% of the total260261265 Use of Placing Proceeds and Progress (As of September 30, 2021) | Description | Designated Amount (HKD) | Utilized Amount (HKD) | Utilization Rate | Expected Date of Full Utilization | | :------------------------------------------------ | :-------------- | :---------------- | :--------- | :--------------- | | Establishing New Teams/Hiring Additional Technicians/Sales Personnel/Operations Personnel to Expand Existing Teams | 18,330,000 | 7,007,384 | 38.2% | June 30, 2022 | | Purchasing Inventory | 10,474,000 | 10,054,507 | 96.0% | November 30, 2021 | | Purchasing Machinery and Equipment | 15,711,000 | 9,788,947 | 62.3% | June 30, 2022 | | General Working Capital and General Corporate Purposes | 7,855,000 | 4,306,672 | 54.8% | January 31, 2022 | | Total | 52,370,000 | 31,157,510 | 59.5% | | Post-Reporting Period Events A joint venture agreement was entered into on October 22, 2021, to provide e-commerce operation services to Chinese brand clients, with no other significant events occurring post-reporting period - On October 22, 2021, Guodu Industrial Limited, a direct wholly-owned subsidiary of the Company, entered into a joint venture agreement with a joint venture partner to establish a joint venture company to engage in the business of providing e-commerce operation services to Chinese brand clients268 - Save as disclosed above, no other significant events occurred from the end of the reporting period up to the date of this report268 Disclosure of Interests and Other Information This section details the interests and short positions of directors, chief executives, and substantial shareholders in the company's securities, along with other corporate governance information Interests and/or Short Positions of Directors and Chief Executives in the Shares, Underlying Shares, and Debentures of the Company or any Associated Corporation As of September 30, 2021, Mr. Mong King Yiu and Ms. Chong Siew Lan (via Express Ventures) jointly held 13.64% of the company's shares, while Mr. Cao Chunmeng beneficially owned 9.11% Long Positions of Directors and Chief Executives in the Ordinary Shares of the Company (As of September 30, 2021) | Name | Capacity/Nature | Number of Shares | Approximate Percentage | | :--------- | :--------------------- | :---------- | :--------- | | Mr. Mong King Yiu | Interest in controlled corporation; Jointly held interest | 120,000,000 | 13.64% | | Ms. Chong Siew Lan | Interest in controlled corporation; Jointly held interest | 120,000,000 | 13.64% | | Mr. Cao Chunmeng | Beneficial owner | 80,200,000 | 9.11% | Long Positions of Directors and Chief Executives in the Ordinary Shares of Associated Corporation Express Ventures (As of September 30, 2021) | Name | Name of Associated Corporation | Capacity/Nature | Number of Shares Held | Approximate Percentage of Equity | | :--------- | :--------------- | :--------- | :----------------- | :------------- | | Mr. Mong King Yiu | Express Ventures | Beneficial owner | 510 | 97.14% | | Ms. Chong Siew Lan | Express Ventures | Beneficial owner | 15 | 2.86% | Interests and Short Positions of Substantial Shareholders and Other Persons in the Shares, Underlying Shares, and Debentures of the Company As of September 30, 2021, substantial shareholders included Express Ventures (13.64%), Li Chao (10.65%), and Lux Aeterna Global Fund SPC (7.42%) Long Positions of Substantial Shareholders and Other Persons in the Ordinary Shares of the Company (As of September 30, 2021) | Name/Company Name | Capacity/Nature | Number of Shares | Approximate Percentage of Equity | | :------------------------- | :--------- | :---------- | :------------- | | Express Ventures | Beneficial owner | 120,000,000 | 13.64% | | Li Chao | Beneficial owner | 93,750,000 | 10.65% | | Lux Aeterna Global Fund SPC | Beneficial owner | 65,300,000 | 7.42% | Code of Conduct for Securities Transactions by Directors The company adopted the GEM Listing Rules' required standard of dealings for directors' securities transactions, with all directors confirming compliance during the reporting period - The Company has adopted the required standard of dealings set out in Rules 5.48 to 5.67 of the GEM Listing Rules as the code of conduct for directors' securities transactions in shares284 - Following specific enquiry with all Directors, all Directors have confirmed that they have complied with the required standard of dealings and the code of conduct for directors' securities transactions during the period and up to the date of this report284 No Change in Directors' Information There have been no changes in the directors' information required to be disclosed under Rule 17.50A(1) of the GEM Listing Rules - There have been no changes in the directors' information required to be disclosed under Rule 17.50A(1) of the GEM Listing Rules285 Sufficient Public Float The directors confirm that the company maintained a sufficient public float for its shares as stipulated by the GEM Listing Rules throughout the reporting period - The Directors confirm that the Company has maintained a sufficient public float for its shares as stipulated by the GEM Listing Rules throughout the relevant period286 Competition and Conflicts of Interest No directors, controlling shareholders, or their close associates engaged in competing businesses or had disclosable conflicts of interest with the group during the reporting period - During the relevant period, none of the Directors, controlling shareholders, or substantial shareholders of the Company or any of their respective close associates engaged in any business that competes or is likely to compete, directly or indirectly, with the Group's business or had any other conflicts of interest with the Group requiring disclosure under Rule 11.04 of the GEM Listing Rules287 Purchase, Sale or Redemption of the Company's Listed Securities The Board confirms that neither the company nor its subsidiaries purchased, sold, or redeemed any of the company's listed securities during the reporting period - The Board confirms that neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities during the relevant period290 Share Option Scheme The company adopted a share option scheme on December 14, 2017, but no share options have been granted under the scheme since its adoption - The Company adopted a share option scheme on December 14, 2017, and no share options have been granted under the scheme since its adoption291 Share Award Scheme The company adopted a share award scheme on February 18, 2021, to recognize contributions and retain talent, with the maximum number of awarded shares not exceeding 1% of total issued share capital, and no shares purchased or issued under the scheme this year - The Company adopted a share award scheme on February 18, 2021, to recognize contributions, provide incentives to retain talent, and attract suitable individuals292 - The maximum number of awarded shares shall not exceed 1% of the Company's total issued share capital from time to time292 - No awarded shares were purchased or issued under the share award scheme during the current year292 Compliance with Corporate Governance Code The company has substantially complied with the Corporate Governance Code provisions of Appendix 15 to the GEM Listing Rules since its listing on January 16, 2018 - The Company has adopted the code provisions of the Corporate Governance Code set out in Appendix 15 to the GEM Listing Rules since its listing on January 16, 2018295 - The Company has substantially complied with the Corporate Governance Code throughout the relevant period, where applicable295 Audit Committee The Audit Committee, established on December 14, 2017, comprises three independent non-executive directors and has reviewed the unaudited quarterly results, fulfilling its duties including advising on auditor appointments and reviewing financial statements - The Company established an Audit Committee on December 14, 2017, with terms of reference in compliance with Rules 5.28 to 5.33 of the GEM Listing Rules296 - The primary duties of the Audit Committee include advising on the appointment of external auditors, reviewing the Group's financial statements, annual reports and accounts, half-yearly reports, and quarterly reports, as well as reviewing the Group's financial controls, internal controls, and risk management systems296 - The Audit Committee comprises three independent non-executive directors: Mr. Tang Chi Wai (Chairman), Mr. Yan Xiaotian, and Dr. Choi Wing Sum296 - The Company's unaudited first quarterly results for the relevant period were reviewed by the members of the Audit Committee, who provided their opinions and recommendations thereon296 Other Information This report uses an illustrative exchange rate of SGD 1 to HKD 5.85, was issued by Chairman and Executive Director Mr. Mong King Yiu on October 25, 2021, and is available on the GEM and company websites - Singapore Dollars are converted to Hong Kong Dollars at an exchange rate of SGD 1 to HKD 5.85 for illustrative purposes only299 - This report was issued by Mr. Mong King Yiu, Chairman and Executive Director, on October 25, 2021299 - This report will be published on the GEM website www.hkgem.com and the Company's website www.ispg.hk[299](index=299&type=chunk)
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