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The disposed business has been facing challenging market conditions such as declining demand for compressed natural gas vehicles, rising operational costs and uncertainty of political situation in Thailand, and would require capital injection for growth and development.
The Group has diversified its existing businesses to include property business and with the disposal, the Group will be able to focus more on its new property business operations. The Board is of the view that the disposal is an opportunity to completely cease its investment in Thailand as the disposed business no longer makes significant contributions to the Group.
The Group's revenue increased slightly from S$4.13 million for the financial year ended 30 June 2016 ("FY 2016") to S$4.15 million for the financial year ended 30 June 2017 ("FY 2017").
The Group's gross profit margin reduced from 42% to 33%. The decrease was mainly due to the Natural Gas business contributing lower gross profit margin to the Group during FY 2017.
The Group had a profit from continuing operations of S$0.19 million for FY 2017 as compared to a profit from continuing operations of S$0.08 million for FY 2016. The profit was mainly due to the following reason:
The Group's non-current assets increased from S$0.56 million as at 30 June 2016 to S$1.80 million as at 30 June 2017. The increase was mainly due to deposit for purchase of land offset by depreciation of plant and equipment made during the year.
The Group's current assets decreased from S$3.09 million as at 30 June 2016 to S$2.21 million as at 30 June 2017. The decrease was mainly due to decrease in inventories, trade and other receivables and cash and cash equivalent.
The Group's current liabilities increased from S$1.46 million as at 30 June 2016 to S$1.97 million as at 30 June 2017. The increase was mainly due to loan from a director.
The Group's non-current liabilities reduced from S$0.13 million as at 30 June 2016 to S$0.08 million as at 30 June 2017. The decrease was mainly due to repayment of obligations under finance lease.
The Group's cash and cash equivalents as at 30 June 2017 decreased by S$0.61 million to S$1.29 million as compared to the balance of S$1.90 million as at 30 June 2016. The decrease was mainly due to net cash used in investing activities due to deposit for purchase of land, offset by net cash generated from financing activities due to loan from a director.
Management expects the operating business environment in the next 12 months to remain challenging, due to pricing pressure from customers and rising operational costs. However, the management remains focused to enhance its operational efficiency and monitor its operating expenses in the face of economy uncertainties, to enhance the profitability of the Group's existing businesses.
The Management remains cautious of unexpected economic upheavals in the global economy which may adversely affect the Company and will continue to focus on restructuring and consolidating its existing business, without any major capital expenditures.