DEAR SHAREHOLDERS

The financial year ended 31 March 2021 (“FY2021”) saw the Group laying foundations to further strengthen our fire fighting and protection business. Amidst the ongoing challenges arising from the ongoing COVID-19 pandemic, the Group remained agile to cushion its impact while exploring new avenues to improve our business.

BUSINESS AND FINANCIAL REVIEW

We recorded a 12.1% decline in revenue from S$48.0 million in the previous financial year to S$42.2 million in FY2021. This was largely due to the lower demand for fire fighting and protection equipment during Singapore’s circuit breaker period as businesses drastically switched gears to focus on surviving the plunge in daily economic activity. Various industries had projects cancelled or put on hold and by extension, demand for our products and services were affected.

Meanwhile, revenue from our power related division declined by S$4.1 million due to shortening of the Power Purchase Agreement (“PPA”) at the request of the Royal Government of Cambodia (“RGC”) via Electricite Du Cambodge (“EDC”) for our Phnom Penh and Sihanoukville power plants. The decrease was partially offset by an increase in revenue of S$1.0 million from the Special Economic Zone power plant due to higher electricity demand by tenants.

We are highly appreciative of the Singapore government grants to help companies cope with the COVID-19 pandemic. As a result of these grants and the compensation from the shortening of PPA, a higher other income was recorded for FY2021.

The Group reduced its loss after tax to S$3.6 million for FY2021, as compared to the S$13.5 million recorded for FY2020. This was due to a variety of factors including lower cost of sales and lower direct operating costs at the Phnom Penh and Silhanoukville power plants, and the Fire-fighting and Protection division.

During the year, a S$2.2 million impairment was recognised on the advance to an ssociate, Maju Intan Biomass Energy Sdn Bhd (“MJE”). Additionally, the Group also recognised impairment amounting to S$3.3 million on property, plant and equipment, right-of-use assets, demobilisation expenses and restructuring expenses due to the shortening of the PPA.

The disposal of MJE is still ongoing and we will update shareholders as and when pertinent details become available.

FOCUSING ON OUR STRENGTHS

Going forward, the Group will explore new growth opportunities in the fire ighting related business as we anticipate a reduction of revenue due to the shortening of the PPA mentioned above.

One such opportunity is to expand into the technical aspect of the marine industry by creating a manufacturing department for our fire-fighting products. With this new engine of growth, we can leverage on our established expertise and experience to strengthen our foundations and industry position.

The Group will stay agile during this uncertain time environment so as to be able to swiftly realign the Group to benefit from these new opportunities.

OUTLOOK

While the COVID-19 pandemic appears to be under control in certain countries, the spread of mutated variants and resurgent waves of the pandemic have led to further uncertainty in the global economy.In Singapore, the Ministry of Trade and Industry (MTI)forecasted that GDP growth would be at 4.0 to 6.0 percent in view of the heightened uncertainties in the economic environment, characterised by both upside and downside risks, especially arising from the COVID-19 pandemic. The MTI added that recovery would be uneven across outward-oriented sectors such as trade and manufacturing are projected to benefit from external demand while tourism, aviation and consumer-facing sectors are likely to see further delay to their recovery. However, the resurgences of infections and new strains in economic partners may affect the Singapore economy.

Moving forward, we will remain vigilant and closely monitoring the situation to respond appropriately to these challenges.

ACKNOWLEDGEMENTS

We would like to express our appreciation to our business partners, the management, staff and our shareholders for their support. The Group has covered much ground for FY2021 and we look forward to the next phase of our development with you in FY2022.

Thank you.

Tay Kah Chye