Financial Performance - The group's revenue for the year ended December 31, 2022, decreased by approximately 6.2% to about SGD 13.7 million, down from approximately SGD 14.6 million in the previous fiscal year[12]. - Gross profit fell from approximately SGD 3.0 million for the year ended December 31, 2021, to approximately SGD 2.1 million for the year ended December 31, 2022, a decrease of about SGD 0.9 million[12]. - Revenue decreased by approximately SGD 0.9 million or 6.2% to SGD 13.7 million for the year ended December 31, 2022, compared to SGD 14.6 million for the previous year[20]. - Gross profit decreased from SGD 3.0 million to SGD 2.1 million, with a gross margin decline from 20.5% to 15.3% due to lower profit margins on ongoing projects[22]. - The group reported a net loss of approximately SGD 0.9 million, a decrease of 77.5% from SGD 4.0 million in the previous year[27]. - Other income increased to approximately SGD 2.8 million from SGD 0.9 million, primarily due to increased bank interest income and rental income[23]. - Administrative expenses rose by approximately SGD 0.9 million or 20.9% to SGD 5.2 million, mainly due to increased depreciation, professional fees, and employee costs[24]. Project and Contract Management - The company completed two projects during the year, with a total contract value of approximately SGD 7.2 million[14]. - The group has five ongoing projects with a total contract value of approximately SGD 55.7 million, of which SGD 12.7 million has been recognized as revenue as of December 31, 2022[15]. - A new project was acquired with a total contract value of approximately SGD 139.0 million, established through a joint venture with a 70:30 agreement with an independent third party[16]. - The company is adopting a more cautious approach to new project bidding due to lower gross margins and intense competition from other contractors[11]. - The company has established good relationships with subcontractors for HVAC and fire protection system design and installation, ensuring project timelines are met[70]. Economic and Industry Context - The macroeconomic environment remains challenging, with high inflation and rising interest rates expected to increase future operating costs[11]. - The construction industry in Singapore saw a year-on-year growth of 10.0% in output, driven by increased public and private sector construction activities[11]. - The Singapore economy grew by 3.6% in 2022, with a forecasted GDP growth of 0.5% to 2.5% for 2023[11]. - The construction sector is still affected by labor shortages, which have not yet returned to pre-pandemic levels[8]. Financial Position and Liquidity - As of December 31, 2022, the group had cash and bank balances of approximately SGD 24.0 million, up from SGD 14.0 million in the previous year[30]. - The group’s debt stood at approximately SGD 6.1 million, which includes bank loans and lease liabilities[30]. - The company will continue to implement prudent asset-liability management and control operating expenses to ensure sufficient liquidity[8]. - The company has no distributable reserves as of December 31, 2022, due to cumulative losses, but can distribute share premium provided it can meet its debts[75]. Corporate Governance and Compliance - The board has presented the annual report along with the audited consolidated financial statements for the year[63]. - The company has maintained high standards of corporate governance, fully complying with applicable principles and code provisions during the year[130]. - The board has established a remuneration committee to determine the compensation structure for directors and senior management based on performance and market practices[99]. - The company has established a disclosure policy to ensure timely handling of confidential information and compliance with securities regulations[192]. - The company has established four board committees: Audit Committee, Remuneration Committee, Nomination Committee, and Corporate Governance Committee, each with clear written terms of reference[148]. Risk Management - The group faces significant risks due to the non-recurring nature of its projects, which may impact financial performance if new contracts are not secured[94]. - The company relies heavily on foreign workers, and any shortage or inability to retain them could adversely affect operations and financial performance[97]. - The company has established policies to mitigate credit risk, including credit limit assessments and monitoring procedures to recover overdue receivables[97]. Employee and Stakeholder Relations - Total employee costs for the year ended December 31, 2022, amounted to approximately SGD 6.1 million, an increase from SGD 5.6 million in the previous year[40]. - The group had a total of 144 employees as of December 31, 2022, compared to 142 employees in the previous year[40]. - Employee safety and health are prioritized, with the implementation of a set of occupational health and safety procedures, which has improved working conditions[72]. - The company has established strong relationships with key stakeholders, including customers, suppliers, employees, and shareholders[68]. Shareholder Information - The company aims to maximize returns for shareholders by focusing on sustainable profit growth and considering financial stability before declaring dividends[73]. - No final dividend has been recommended for the year, consistent with the previous year[76]. - The largest customer accounted for approximately 35.7% of total revenue, while the top five customers contributed about 98.8% of total revenue[119]. - The company has maintained a public float of at least 25% of the total issued shares as required by listing rules[122]. Audit and Internal Controls - The independent auditor's report includes a qualified opinion due to the inability to obtain satisfactory audit evidence from an investee[180]. - Management has suspended payments of HKD 12.6 million (approximately SGD 2.2 million) to the investee due to non-cooperation in providing financial data[181]. - The audit committee has reviewed the internal control system and found no significant deficiencies, confirming its effectiveness[188]. - The company has engaged an independent internal audit consultant to assess its overall internal controls, with no major deficiencies reported[191].
守益控股(02227) - 2022 - 年度财报