Page 4 - ar2012.pdf

Dear Shareholders,
The Group is now into the second year of being listed on the
Catalist of the Singapore Exchange Securities Trading Limited
(the “SGX-ST”). I am pleased to share with you the Group’s
performance in FY2012 as well as to provide an update on the
progress we have made.
FY2012 has been a challenging year for the Group. The
Group’s revenue decreased by 15.0% or S$5.1 million from our
record high revenue of S$33.8 million in FY2011. Gross profit
decreased by 24.5% or S$2.6 million mainly due to an inventory
provision of S$1.4 million. Excluding the inventory provision,
gross profit would have decreased by S$1.2 million or 11.7%.
The Group also made a specific provision for a doubtful debt
of S$575,000 on one of our customers which further reduced
our net profit from S$2.5 million to S$0.4 million. The Group’s
net profit would have been S$2.3 million without taking in the
provision of inventory and doubtful debts.
There was much anticipation and uncertainty in the macro-
economic environment with several major political changes
mainly in the USA and People’s Republic of China. The Group’s
revenue from its main markets in Singapore, Malaysia and
Indonesia had suffered from slower domestic demand and
delays in new project launches. The commercial and light
industrial (refrigeration) segment continues to be the main
contributor to the Group’s business, accounting for more than
70.0% of the Group’s business. The residential and commercial
(air-conditioning) segment and oil, marine and gas (refrigeration
and air-conditioning) segment contributed to approximately
21.1% and 7.6% respectively.
OUTLOOK AND PROSPECTS
The Group remains cautious about the overall global economic
outlook over the next 12 months. We expect a gradual recovery
in the global markets, in view of the quantitative easing
measures taking place in the USA and European Union. The
Chinese economy looks to be recovering after the political
transition but still struggles with its high domestic inflation rates
and runaway property prices. Nonetheless, the Group believes
CEO’s Message
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