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(Extracted from Annual Report 2023)

Mr Lim Kee Liew @ Victor Lim

Overview

The Group faced a challenging business environment in FY2023, amidst rising interest rates and inflationary pressures, coupled with disruptions to global economic condition.

As announced on 31 August 2022, the Company entered into a conditional sale and purchase agreement ("SPA") with Mr. Lim Kee Liew @ Victor Lim and Mdm. Leong Lai Heng, who is a Director and an associate of the Director respectively, to acquire ordinary shares of Asian Micro Realty Development, Inc. ("Target Company") representing 30.0% of the total issued share capital of the Target Company, on the terms and conditions of the SPA ("Proposed Acquisition"). In connection with the Proposed Acquisition, the Company was granted an option to acquire an additional 10.0% of the total issued share capital of the Target Company. The SPA subsequently lapsed on 30 June 2023 ("Long Stop Date") as not all Conditions (as defined in the announcement dated 31 August 2022) have been satisfied.

The Group's consolidated revenue decreased by $1.56 million from $4.77 million for the financial year ended 30 June 2022 ("FY2022") to $3.21 million in FY2023. The decrease in revenue was mainly due to lower revenue generated from the manufacturing and trading business by the Singapore subsidiary.

A net loss of $0.81 million was recorded by the Group in FY2023 as compared to a net loss of $0.17 million in FY2022. This was mainly due to lower revenue and gross profit generated from manufacturing and trading business for FY2023.

As at 30 June 2023, the Group's net tangible assets was $1.67 million, compared to $2.32 million as at 30 June 2022.

Looking Ahead

As announced on 6 July 2023, the Company has entered into a conditional novation and debt capitalisation agreement ("Debt Capitalisation Agreement") with the Company's subsidiaries and the participating creditors for the (i) novation; and (ii) proposed capitalisation and conversion of the participating debts into new ordinary shares ("Conversion Shares"). Separately, the Company intends to pay bonus to certain employees of the Group by way of issuance of new ordinary shares ("Employee Bonus Shares"). The Company agreed to allot and issue an aggregate of 100,517,630 Conversion Shares pursuant to the terms of the Debt Capitalisation Agreement and 7,578,946 Employee Bonus Shares, subject to the shareholders' approval in the upcoming Extraordinary General Meeting to be held on 20 October 2023. Details on the resolutions will be contained in the circular to be circulated to the shareholders on 4 October 2023.

The Group's businesses are expected to remain challenging for the financial year ending 30 June 2024 ("FY2024") mainly due to global economic uncertainties. Despite the challenging market condition in which the businesses operate, the Group continues to focus on its operational efficiency, cost control, cash conservation and ensuring sustainability of its existing businesses.

Corporate Governance

The Group remains committed to maintain its regime of high standards of corporate governance. It pledges to provide timely and accurate information through announcements and investor relations activities for the benefits of all stakeholders. Please refer to the Report on Corporate Governance set out on pages 13 to 38 for detailed disclosure on the Company's corporate governance practices.

Appreciation

On behalf of the Board, I would like to thank all shareholders for their continued loyalty and support to the Company.

We also acknowledge the strong support of our customers, bankers and business associates of our Company in FY2023 and we are looking forward to your strong support to help us to achieve a better FY2024 and beyond.

Last, but not least, I would like to thank all staff and management for their dedicated services and support to the Group as we work together to overcome the unprecedented challenges.

Mr. Cheah Wee Teong
Independent Non-Executive Chairman
26 September 2023