Selected Consolidated Statement of Comprehensive Income & Balance Sheets Items
Financial Review for FY2020
Consolidated Statement of Comprehensive Income
REVENUE AND COST OF WORKS
The Group’s revenue and cost of works for FY2020 decreased by approximately S$25.86 million or 32.82% and S$20.73 million or 30.11% respectively, compared to FY2019.
The decrease in the Group’s revenue was primarily attributable to a significant decrease in contribution from general building segment as a result of the adverse impact from the COVID-19 outbreak. Precast manufacturing and property development and investment segments were also impacted to varying extent.
GENERAL BUILDING
Revenue from construction works relating to alteration and addition works, maintenance works and home improvement program works decreased to approximately S$52.67 million (FY2019: S$77.39 million). Construction activities in the three months to June 2020 fell as non-essential construction activities were suspended during the circuit breaker period, except where exempted by the relevant authorities. Correspondingly, cost of works for general building also decreased to approximately S$47.89 million (FY2019: S$67.87 million).
PRECAST MANUFACTURING
Revenue increased by S$0.25 million due to the supply of piles to a new customer from December 2019 onwards.
PROPERTIES DEVELOPMENT AND INVESTMENT
Nil revenue because there was no sale of Malaysia terraced service industrial in FY2020 as opposed to sale of 2 units in FY2019 which contributed approximately S$1.39 million. Correspondingly, nil cost of works for properties development and investment segment was recorded in FY2020 (FY2019: S$0.96 million).
As a result of the above, gross profit decreased by approximately S$5.13 million or 51.58%.
OTHER INCOME
The Group’s other income for FY2020 increased by approximately S$0.95 million or 152.83% compared to FY2019, mainly due to the government grants from the Unity, Resilience, Solidarity and Fortitude Budgets (collectively known as “Singapore Budgets 2020”).
OTHER EXPENSES
The Group’s other expenses for FY2020 increased by approximately S$0.36 million or 68.42%, compared to FY2019.
This is mainly due to the recognition of fair value (“FV”) loss on investment properties of approximately S$0.65 million (FY2019: S$Nil) in relation to the Malaysia land and impairment of property, plant and equipment (“PPE”) of approximately S$0.09 million (FY2019: S$Nil), partially offset by the decreased in currency translation loss of approximately S$0.36 million. Currency translation loss arose from the Malaysia subsidiaries’ monetary liabilities denominated in Singapore Dollar due to the weakening of Malaysia Ringgit (“RM”) during FY2020.
ADMINISTRATIVE EXPENSES
The Group’s administrative expenses for FY2020 increased by approximately S$0.54 million or 7.02%, compared to FY2019.
This is mainly due to the recognition of impairment loss on financial assets and contract assets amounting to S$0.97 million as required by Singapore Financial Reporting Standards (International) (“SFRS(I)”) 9 Financial Instruments, partially offset by the decrease in rental on operating leases of approximately S$0.45 million.
TAXATION
The Group recorded an income tax credit of approximately S$0.02 million (FY2019: income tax expense of approximately S$0.20 million). In FY2020, deferred tax asset of approximately S$0.15 million has been recognised for unutilised tax losses available for offset against future profits and reversal of deferred tax liabilities of approximately S$0.16 million arising from the FV loss on the Malaysia land, partially offset by the under provision of current taxation in respect of prior financial years of approximately S$0.29 million.
LOSS FOR THE FINANCIAL YEAR
As a result of the reduction in the non-essential construction activities together with the recognition of FV loss on the Malaysia land, impairment loss on financial assets, contract assets and PPE, the Group reported loss for the financial year of approximately S$4.01 million (FY2019: profit for the financial year of approximately S$0.78 million).
Balance Sheets
CURRENT ASSETS
The Group’s current assets decreased by approximately S$0.97 million which is mainly due to the decreased in contract assets, trade and other receivables of approximately S$2.08 million and S$0.96 million respectively, partially offset by the increase in inventories, grant receivables, cash and bank balances of approximately S$0.1 million, S$0.33 million and S$1.63 million respectively.
Movement in inventories, contract assets, trade and other receivables were mainly due to on-going projects.
Increase in cash and bank balances were mainly due to additional borrowings obtained for working capital purposes and grant receivables increased due to the Singapore Budgets 2020.
NON-CURRENT ASSETS
The Group’s non-current assets increased by approximately S$0.65 million which is mainly due to the increased in PPE and deferred tax asset of approximately S$1.25 million and S$0.15 million respectively, partially being offset by the decreased in investment properties of approximately S$0.75 million.
Investment properties decreased mainly due to the FV loss for the Malaysia land.
A deferred tax asset of approximately S$0.15 million (FY2019: S$Nil) has been recognised for unutilised tax losses available for offset against future taxable profits.
PPE increased mainly due to adoption of SFRS(I) 16 Leases from 1 July 2019 on the recognition of right-of-use assets offset by the routine depreciation and disposal of PPE during FY2020.
CURRENT LIABILITIES
The Group’s current liabilities decreased by approximately S$3.22 million mainly due to the decreased in trade and other payables and borrowings of approximately S$3.37 million and S$0.6 million respectively, partially being offset by the increased in contract liabilities and deferred grant of approximately S$0.36 million and S$0.32 million respectively.
Movement in contract liabilities, trade and other payables were mainly due to on-going projects.
Borrowings decreased mainly due to repayment and deferred grant increased due to the Singapore Budgets 2020.
NON-CURRENT LIABILITIES
The Group’s non-current liabilities increased by approximately S$6.78 million mainly due to increase in borrowings and lease liabilities of approximately S$4.92 million and S$2.01 million respectively, partially offset by the decrease in deferred tax liabilities of approximately S$0.16 million.
Increased in borrowings and lease liabilities are mainly due to additional borrowings obtained for working capital purposes and adoption of SFRS(I) 16 Leases from 1 July 2019 onwards respectively.
Movement in deferred tax liabilities is due to the changes in FV arising from the Malaysia land.
Consolidated Statement of Cash Flow
OPERATING ACTIVITIES
Net cash used in operating activities was approximately S$1.37 million mainly due to the significant reduction in construction activities in the last quarter of FY2020 as a result of the circuit breaker measures.
INVESTMENT ACTIVITIES
Net cash used in investing activities was approximately S$0.19 million mainly used to purchase PPE during FY2020.
FINANCING ACTIVITIES
Net cash from financing activities was approximately S$3.19 million. Additional borrowings were obtained for working capital purposes, repayment of the borrowings and interest expenses.
As a result, the Group recorded a net increase in cash and bank balances of S$1.63 million.