ANNUAL REPORT 2020 COSEM Annual Re… · Making Your World Safe 15th COSEM ANNUAL REPORT 2020 E-AGM...

Making Your World Safe

15th COSEM

ANNUAL REPORT 2020

E-AGM

Friday, 1st Oct 2020

1100 hrs

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CONTENTS 1 Statement by Chairman 2 2 Agenda of 14th COSEM AGM 2019 3 3 List of Appointment Holders 4 4 Minutes of the 14th AGM 2019 5 5 Board of Directors’ Report 7 6 Co-operative Account

a. Statement by Directors 13 b. Auditors’ Report 15 c. Statement of Comprehensive Income 18 d. Statement of Financial Position 19 e. Statement of Changes of Equity 20 f. Consolidated Statement of Cash Flows 22 g. Notes to the Financial Statement 23

7 COSEM Safety & Security Account

a. Statement by Directors 60 b. Auditors’ Report 62 c. Statement of Comprehensive Income 65 d. Statement of Financial Position 66 e. Statement of Changes of Equity 67 f. Statement of Cash Flows 68 g. Notes to the Financial Statement 69

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CHAIRMAN’S STATEMENT

Achieving Growth Amidst Challenging Business Conditions In the last financial year (FY2019/2020), COSEM turned in a combined after-tax profit of approximately $2.7 million. Despite the challenges, the group achieved an impressive set of records, close to $1mil increase in net profit after tax compared to the year before. We anticipate that operating expenses will continue to rise into FY2021, especially in the area of staff cost. This is compounded by the current COVID-19 situation, uncertain business environment and slowing global economy for the year ahead. To manage the rising overheads and staff costs, COSEM will be tapping on various government grants to automate as well as to look at implementing various cost-cutting measures when the need arises. In addition, the business environment had been especially challenging last year as the global economy remained weak and uncertain. In this context, despite the challenges, COSEM had achieved respectable financial results over the last year and would continue to strive to achieve the growth target set for the year. I am also heartened that COSEM has worked hard to strengthen our financial position and produce a net profit of at least $2 million dollars annually. Steadily, we have accumulated approximately $14 million cash reserve.

Identifying Blue Ocean Opportunities COSEM will strengthen our existing businesses and scale down on less profitable ones. In the new year, we will also work towards expanding our capacity for growth through synergistic business collaboration with potential strategic partners and establish new business opportunities and markets in niche areas to generate higher revenue streams. COSEM will leverage the strong support by our Middle East counterparts for our consultancy services and explore new services that will bring greater value to their core services. We will also work on sustaining the demand for our local training courses and in the provision of the Emergency Ambulance Services to the SCDF and the SAF. Enhancing Members’ Benefits, Providing Employment Opportunities While we strive for continued profitability and business excellence, COSEM has remained focused on promoting the interests of our members. Today, COSEM employs 60 retired officers and 111 SCDF ORNSmen. We will continue to offer secondary employment opportunities to retiring or former SCDF officers as we expand and grow our businesses. On this note, I would like to urge members to encourage your fellow officers and colleagues to join us as members and contribute to the COSEM family. This is the sixth year running that COSEM is giving out the Children Study Award. In this year, the number of successful applications has almost doubled compared to last year. It gives us great encouragement to see that more members are benefitting from the initiative and we will explore other avenues to expand members’ benefits. It gives me great pleasure to announce the Board’s recommendation for COSEM to continue declaring dividends for our members this year, at the maximum returns of 10% for the eleventh year running. New Board of Directors I would like to thank the Board of Directors who will be relinquishing their post as their tenure in COSEM had come to a completion. Their unwavering support while in COSEM is much appreciated. I would also like to take this opportunity to welcome the new BODs. With the strong foundation built over the years and a capable management structure in place, I believe COSEM will continue to do well and bring about greater benefits to our members even during the current COVID-19 pandemic. Thank You.

DC Teong How Hwa Chairman

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AGENDA

15TH COSEM ANUUAL GENERAL MEETING 2020 1 Opening Address by Chairman, DC Teong How Hwa.

2 To approve the Minutes of the 14th COSEM AGM 2019.

3 To receive and approve the Report of the Board of Directors for the financial year ended

31 March 2020

4 To receive and approve the Statement of Accounts for the financial year ended 31

March 2020

5 To approve the Declaration of Dividends.

6 To approve the Expenditure Budget for FY 2020/2021.

7 To elect and appoint the Board of Directors and Internal Auditors of the Co-operative for

FY 2019/20 – 2020/21.

8 To appoint the External Auditors for FY 2020/2021.

9 To transact any other business in respect of which notice has been received by the

Hon. Secretary three working days before the meeting.

For and on behalf of the Board of Directors

MAJ Foo Yiing Kai

Honorary Secretary

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APPOINTMENT HOLDERS PRESIDENT COMR Eric Yap Wee Teck VICE PRESIDENT SAC Lian Wee Teck BOARD OF DIRECTORS Chairman DC Teong How Hwa Vice-Chairman LTC Tong Hong Haey Hon Secretary MAJ Foo Yiing Kai Hon Treasurer MAJ Keith Lee Asst Secretary MAJ Hassan Kuddoos Asst Treasurer CPT Abel Sim Members LTC Zhou Yan Sheng LTC Jeffery Ng Leng Ping MAJ Tan Kiat Lin Anne Claudine LTA Mohamad Fazil Bin Abdul Rashid

WO2 Leong Kuan Yee EXTERNAL AUDITORS INTERNAL AUDITORS Pinnally PAC MAJ Ridwan Bin Abdul Rahim Public Accountants & Chartered Accountants MAJ Travis Chia Singapore

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MINUTES OF COSEM 14TH AGM

Minutes of the 14th AGM of the Co-Operative of SCDF Employees Limited (COSEM) held on 27

September 2019 at HQ SCDF Multi-Purpose Hall, 91 Ubi Avenue 4, Singapore 408827.

PRESENT

Chairman: DC Teong How Hwa

Hon Secretary: MAJ Foo Yiing Kai

Hon Treasurer: CPT Abel Sim (Rep)

A total of 98 ordinary members were present at the meeting.

ITEM 1 – OPENING ADDRESS BY CHAIRMAN

1.1 Chairman called the meeting to order at 1500hrs and welcomed members to COSEM’s 14th

Annual General Meeting (AGM).

1.2 Chairman reported that COSEM performed well in the past FY, chalking up a combined after-

tax profit of approximately $1.7 million. Whilst the profit fell short of the $2 million target set by

the Board last year, the profit earned was still healthy and substantial actions were also taken

to keep the operating costs effectively in check. He added that the business environment had

been especially challenging last year as the global economy remained weak and uncertain. In

this context, despite the challenges, COSEM had achieved respectable financial results over

the last year and would continue to strive to achieve the growth target set for the year.

1.3 Chairman shared that COSEM will strengthen our existing businesses and scale down on less

profitable ones. In the new year, COSEM will also work towards expanding our capacity for

growth through synergistic business collaboration with potential strategic partners and

establish new business opportunities and markets in niche areas to generate higher revenue

streams.

1.4 Chairman highlighted that while COSEM strive for continued profitability and business

excellence, it has remained focused on promoting the interests of our members. Today,

COSEM employs 60 retired officers and 95 SCDF ORNSmen. He also added that this year,

will be the fifth run of the COSEM Children Study Award and was heartened that the number of

successful applications has almost doubled compared to last year

1.5 Finally, Chairman announced the Board’s recommendation for COSEM to continue declaring

dividends for our members this year, at the maximum returns of 10% for the tenth year

running.

ITEM 2 – TO APPROVE THE MINUTES OF THE 14th AGM HELD ON 27 SEPTEMBER 2019 AT

HQ SCDF

2.1 As there was no query to the minutes of the 14th AGM, the motion to approve the minutes was proposed MAJ Hasan Kuddoos and seconded by SWO2 Mohamad Fazil .

ITEM 3 – TO RECEIVE AND ADOPT THE REPORT OF THE BOARD OF DIRECTORS FOR THE

FINANCIAL YEAR ENDED 31 MARCH 2019

3.1 Hon. Secretary referred the members to the report prepared by the Board of Directors. The report covered COSEM’s business ventures in the last financial year, the new projects to be undertaken in the current financial year, and other business opportunities in the near future.

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3.2 He said that for the past year, COSEM had performed reasonably well in view of the

challenging global economic conditions. COSEM would continue to leverage on its strong partnerships and fundaments, particularly in the training and consultancy services and the provisions of the Emergency Ambulance Services, to sustain its growth in the short term.

3.3 In summary, Hon. Secretary said that COSEM would continue to seek promising business

opportunities actively and reiterated the main tenet of COSEM to provide secondary career opportunities for retired and ORNS SCDF personnel.

3.4 LTC Kim Kok Yuan proposed to adopt the report and MAJ Revathi Veerasamy seconded the

motion.

ITEM 4 – TO RECEIVE AND APPROVE THE STATEMENT OF ACCOUNTS FOR THE

FINANCIAL YEAR ENDED 31 MARCH 2019

4.1 Hon. Treasurer presented the audited FY 19/20 Statement of Accounts for COSEM to the members. As there were no questions asked, the Statements of Accounts were accepted upon being proposed by WO2 Mohammad Hozzaidi and seconded by CPT Anne Claudine.

ITEM 5 – TO APPROVE THE DECLARATION OF DIVIDENDS

5.1 As COSEM continued to deliver good results, Chairman announced that the Board would like to recommend the declaration of 10% dividend for all members, which was the maximum returns, for the tenth year running. The motion was approved upon being proposed by CPT Foo Ce Yi and seconded by CPT Lee Heng.

ITEM 6 – TO APPROVE EXPENDITURE BUDGET FOR FY 2019/2020

6.1 Hon. Treasurer referred the meeting to the proposed expenditure budget for FY 19/20. The budget was approved on being proposed by WO2 Alan Ho and seconded by CPT Lee Heng.

ITEM 7 – TO APPOINT THE EXTERNAL AUDITOR OF THE CO-OPERATIVE FOR FY 2019/2020

8.1 Hon Secretary said that the term of the current auditor, M/S J Tan & Co had ended. COSEM

by-laws 10.6 states that the appointment of the External Auditors shall not exceed 5

consecutive years. In view of this, Pinnally PAC will be appointed as COSEM’s external

auditors. As there were no objections from the members, the motion to appoint Pinnally PAC

was proposed by LTC Tong Hong Haey and seconded by LTC Jeffrey Ng.

ITEM 8 – ANY OTHER MATTERS

9.1 Hon. Secretary reported that no notices for any other businesses were received. The meeting was adjourned at 1530 hrs and transited to the COSEM Children Study Award 2019 award presentation ceremony.

Minutes recorded by: Confirmed by:

MAJ Foo Ying Kai DC Teong How Hwa

Hon. Secretary Chairman

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BOARD OF DIRECTORS’ REPORT

Dear Members, The Board of Directors is pleased to present the Management Report for Financial Year 2019/20 from 1 April 2019 to 31 March 2020. Objectives of COSEM The Co-operative aims to provide welfare to our members and offer job opportunities when they retire or have completed their active service with the Singapore Civil Defence Force (SCDF). The Co-operative also aims to raise fire safety awareness and standards in the community by providing fire safety products and services at an affordable cost. Annual General Meeting The Board of Directors convened the 14th Annual General Meeting on 27 September 2019 and conducted 5 Board meetings during the period under review. Membership Base As at 1 July 2020, the total membership strength is 1,991. The breakdown of the membership is as follows: Ordinary Member - 1,552 Associate Member - 439 Staff Strength As at 1 July 2020, COSEM has 186 full-time employees and 72 part-time employees. Of the 186 full-time employees, there are 60 retired SCDF officers, 111 ORNSmen and 15 other personnel. COSEM also has 1 seconded SCDF officer (i.e. the CEO). Business Ventures The Board of Directors is pleased to present the business ventures that COSEM embarked on in Financial Year 2019/20. Over the past Financial Year, COSEM continued to do well in both overseas and local ventures. Locally, COSEM is targeting to obtain the accreditation as an approved Emergency Medical Technician training provider. Through these accreditations and the expansion of our suite of courses, COSEM has cemented its reputation as the National CERT Training Centre. COSEM will continue to focus on improving its core capabilities and expand its services. COSEM will also actively seek out diverse business ventures so as to create a sustainable revenue base and generate earnings from different industry segments and markets. The business ventures as well as potential businesses in the new Financial Year are summarised as follows: Consultancy Services Fire Safety Consultancy Since 2008, COSEM has worked with the Singapore GP Pte Ltd and Victor Enterprises Pte Ltd on the fire risk assessment and update of the Emergency Response Plan (ERP) for the annual Formula One Grand Prix. For FY2019/20, COSEM provided these services for the night race from 20 to 22 September 2019. COSEM also provided the consultancy for the review of the ERP for Jewel Changi Airport.

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Moving forward in FY2020/21, COSEM has been awarded by NUHS to perform Fire Risk Gap Analysis as well as by SCDF to be the event management company for the FiSAC Event. Emergency Preparedness & Crisis Management Consultancy Starting 1 April 2019, COSEM attached 6 consultants to the MHA to conduct Readiness Appraisals and Training for the Homefront Agencies for a period of 5 years. The Readiness Appraisals and Training relate to emergency preparedness and crisis management and include the conduct of audits and exercises. Capability Development Consultancy In November 2019, the BASARNAS of Indonesia successfully completed the INSARAG External Classification for a Medium USAR team under the mentorship of COSEM consultants. Moving forward in FY2020/21, COSEM and Dupont had also been jointly awarded by Qatar Petroleum for an Emergency Response Transformation consultancy. Fire & Rescue Training Simulators In FY2019/20, COSEM worked with a Construction Company to provide the supply, fabrication and installation of the Fire and Rescue Training Simulators under the redevelopment project of CDA Field Training Area. This is a 3-year construction project with an 8-year maintenance contract. Trainers Attachment to the UAE Civil Defence Academy Since 2011, COSEM has attached 6 training consultants to the UAE Civil Defence Academy to conduct basic firefighting training courses for UAE Civil Defence personnel. The current contract will be expiring in Oct 2020 and COSEM is currently in discussions with the Academy to extend the contract for another year. Safety & Security Services Fire & Rescue Standby Services Since 2008, COSEM has been engaged by the Singapore GP Pte Ltd to provide the fire and rescue coverage for the annual Formula One Singapore Grand Prix. Likewise, COSEM has also been engaged by NSL Fuel Management Technology Pte Ltd to provide the fire coverage at the Circuit Park. Due to the COVID-19 pandemic, Formula One Singapore Grand Prix had been cancelled for FY2020/21. However, COSEM has secured contracts with NSL Fuel Management Technology Pte Ltd to provide the fire coverage for the 2021 Formula One Singapore Grand Prix. Chemical, Biological & Radiological Terrain Decontamination Services In FY2019/20, COSEM was awarded a 5-year contract by NEA to continue to provide Chemical, Biological & Radiological Terrain Decontamination Services and Maintenance of Equipment and Consumables. Calibration Services In FY2019/20, COSEM continued to provide calibration services of personal electronic dosimeters for the SCDF, SPF and NEA. In the upcoming FY2020/21, SCDF has awarded COSEM a 3-year maintenance contract for the calibration of personal electronic dosimeters. Emergency Response Crew Services Since 2017, COSEM was contracted by ExxonMobil for the provision of manpower for its 24-hour Emergency Response Service for 5 years. Currently, a total of 80 Fire Technicians, including Fire Supervisors and Operation Coordinators, are deployed at its various refineries and plants. Concurrently, COSEM will also provide 2 weighbridge operators to be stationed at Jurong Island for the weighbridge operations till the end of contract on 31 December 2021.

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Since 2017, COSEM was awarded by SIAEC for the provision of Fire Safety Manager and Fire Officers to provide Fire Support to the airline house and aircraft hangers. Currently, a total of 4 FSMs and 28 Fire Officers are deployed to SIAEC Similarly, COSEM was awarded a new contract for 5 years by Shell for the provision of manpower for its 24-hour Emergency Response Service from 1 September 2019 to 31 August 2024. Currently, a total of 16 Emergency Responders are deployed at its Shell Chemical located in Jurong Island. Environmental Services In FY2019/20, COSEM continued to provide the quarterly cleaning & treatment services for the detention cells at the Subordinate Courts of Singapore, awarded by the Singapore Prison Service. For FY2020/21, COSEM is working with Singapore Prison Service to extend our services for the cleaning & treatment services for the detention cells Disinfection Services Due to the COVID-19 flu pandemic, COSEM has built up the capability to conduct disinfection for infected premises. COSEM has successfully conducted up to 90 disinfection operations for confirmed cases including 4 Cargo Ships. COSEM will continue to provide the disinfection services to support the nation in curbing the COVID-19 flu pandemic. Training Services Local Courses COSEM has maintained the Accredited Training Organisation status as a provider to conduct the WSQ approved training courses under the Process Industry framework. The WSQ approved training courses that COSEM conducts include the 1-day “Implement Incident Management Processes” (IIMP), 1-day “Response to Fire Incident in Workplace”, 2-day “Response to Fire Emergency in Buildings” and the 3-day “Response to Fire & Hazmat Emergency”. In FY2019/2020, COSEM continue to provide medical training, i.e. CPR, AED, BCLS, OFAC (Occupational First Aid Course) and SFA (Standard First Aid), to the local industry. In addition, COSEM continued to conduct the Fire Safety & Chemical Safety Awareness Course, Hazmat Transport Driver Course and other customised courses such as the “Basic Fire Fighting Training and Wardens Training” for the industries. For the past year, COSEM conducted a total of 334 runs for 28 types of courses for almost 4,000 participants. To enhance the skills and professionalism of its training staff, COSEM has sent all its trainers and other training staff to attend the Advanced Certificate in Training & Assessment (ACTA) course conducted by the Institute for Adult Learning (IAL) to upgrade their skills and competencies. As a valued employer, COSEM will also sponsor all eligible trainers to attend the Diploma in Adult & Continuing Education (DACE) course conducted by the Singapore Polytechnic. To date, COSEM has one trainer who is DACE-qualified and 21 trainers who are ACTA-trained. Closer to the heartlands, COSEM has been awarded a contract by the SCDF since FY2016/17 to provide 4 trainers for the conduct of the new Community Emergency Preparedness Programme (CEPP) for three years with the option to extend for another two years. SCDF had also requested for a quotation from COSEM to continue to provide trainers to conduct the new CEPP for FY2021/22. International Courses In FY2019/20, COSEM administrated the conduct of training courses for 163 international participants at the Civil Defence Academy (CDA). COSEM will continue to actively market these international training courses and work closely with CDA to design customised courses for our overseas clients to meet their requirements. Due to the COVID-19 flu pandemic and travel restrictions, COSEM is currently working actively with the CDA to explore the feasibility of providing online learning in the conduct of international training courses.

https://learningspace.ial.edu.sg/

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Product Development and Supplies Supply of Firefighting and Safety Accessories and Other Products Since its inception and as part of our objective, COSEM has actively traded in the firefighting and safety products at affordable costs to the general population and businesses. These products included Unmanned Firefighting Machine, Rescue Equipment, fire helmets, rescue helmets, fire suits, fire boots, fire gloves, SCBA and AED. In FY2019/20, COSEM was awarded contracts by our clients to supply the following products: 1. Supply of 4 set of Hovertech System to SCDF with 7 years maintenance; 2. Supply of 2 units of LUF60 Compact to SCDF with 7 years maintenance; 3. Supply of 1 units of LUF60 to Jakarta Fire & Disaster Department; 4. Supply of 2 units of LUF60 to Bangladesh FSCD; 5. Supply of 1 unit of LUF60 to Manila City DRRMO; 6. Supply of 512 pairs of Fire Fighting Boots to Bangladesh Fire Department; In the new FY2020/21, COSEM will continue to promote its firefighting or safety related products competitively in the local markets. Looking abroad, COSEM will explore new business opportunities with our partners such as the Bangladesh Fire Department, which has already contracted COSEM to supply another 88 pairs of Firefighting Boots. Product Representation Since COSEM’s formation, it has established close business partnerships with reputable companies and COSEM is currently the distributor for the following products: 1. HNE Compressed Air Foam Fire-Fighting System (Germany); 2. SICOR Helmets (Italy) in Asia and the Middle East; 3. RAE System Detectors (USA) in Singapore; 4. Video Search, Wireless Audio ResQ, Life Locator, Visio Stab and Belt-Driven Power

Blower for Groupe Leader (France); 5. HoverMatt/HoverJack medical evacuation products of Australia Statina Healthcare

International; 6. Rechner’s International Sales GmbH (Austria) in relation to LUF60 in Singapore, Malaysia,

Philippines, Indonesia and Vietnam; 7. DuPont HazMat PPE products for the government sector; 8. Texport Fire Fighting Suit (Austria); and 9. WASP System (UK) in Singapore, Taiwan, Philippines, Thailand and Nepal. 10. PVStop (Australia) 11. Shark Robotics (France) in Singapore

In the coming years, COSEM will continue to source for innovative products and work with credible partners in marketing the sale of these firefighting and safety related products in both the local and overseas markets. Emergency Medical Services (EMS) Joint Venture with Unistrong on Emergency Medical Services (EMS) The joint venture between COSEM and Unistrong Technology (S) Pte Ltd to operate a total fleet of 19 emergency ambulances (10 emergency ambulances for SCDF and 3 emergency ambulances at SAF camps and 6 for non-emergency EMS services/ spare ambulances) has performed well in the past year. COSEM expects to see the continuation of these services. In FY2019/20, COSEM has also expanded our non-emergency transport services to provide medical coverage during major corporate events and for Khoo Teck Puat hospital. We have also partnered Explora to provide ad-hoc non-emergency transport services. Overall Business Outlook

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COSEM’s performance in the past FY2019/20 has exceeded our financial targets. COSEM will continue to seek new business opportunities and sustain growth in our revenue and operations. It remains COSEM’s focus to provide job opportunities for our retired SCDF officers and to pass on greater benefits to our members. As we expect the general economy to become weak in FY2020/21 due to the COVID-19 flu pandemic, COSEM is projecting a conservative growth rate in the new FY2020/21. Despite these challenges ahead, COSEM is confident that we have built-up a strong foundation and diversified business portfolios to see us through the difficult times. Appreciation

The Board of Directors wishes to express its sincere appreciation to the COSEM staff for their invaluable services to the Co-operative and to the members for their continued support since it was formed in 2005. The Board also wishes to express its appreciation to the following persons and organisations for their advice and guidance:

(a) President, COMR Eric Yap; (b) Singapore National Co-operative Federation, and (c) The Registrar and Assistant Registrar of Co-operative Societies. For and on behalf of the Board of Directors MAJ Foo Yiing Kai Hon Secretary

CO-OPERATIVE OF SCDF EMPLOYEES LIMITED (Registration No: T05CS0239G)

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Statement by Directors and Financial Statements

Year Ended 31 March 2020


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Statement by Directors The directors are pleased to present their statement together with the audited financial statements of the society and of the group for the reporting year ended 31 March 2020. 1. Opinion of the directors

In the opinion of the directors, (a) the accompanying financial statements and the consolidated financial statements

are drawn up so as to give a true and fair view of the financial position and performance of the society and, of the financial position and performance of the group for the reporting year covered by the financial statements or consolidated financial statements; and

(b) at the date of the statement there are reasonable grounds to believe that the

society will be able to pay its debts as and when they fall due. The board of directors approved and authorised these financial statements for issue. 2. Directors

The directors of the society in office at the date of this statement are:

DC Teong How Hwa (Chairman) LTC Tong Hong Haey (Vice Chairman) MAJ Foo Yiing Kai (Hon Secretary) LTC Lee Hai Guan Keith (Hon Treasurer) MAJ Hasan Kuddoos s/o Abu Bakar Maricar (Asst Secretary) CPT Abel Sim Wee Heng (Asst Treasurer) LTC Jeffery Ng Leng Ping (Member) LTC Zhou Yan Sheng (Member) MAJ Tan Kiat Lin Anne, Claudine (Member) LTA Mohamad Fazil Bin Abdul Rashid (Member) WO2 Leong Kuan Yee (Member)

3. Directors' interests in shares and debentures

According to the register of members’ shareholdings kept by the society, none of the directors of the society holding office at the end of the reporting year had held more than 1% interests in shares or debentures in the society, or of related corporations, either at the beginning of the financial year, or at the end of the reporting year.

4. Arrangements to enable directors to acquire benefits by means of the acquisition of

shares and debentures

Neither at the end of the reporting year nor at any time during the reporting year did there subsist arrangements to which the society is a party, being arrangements whose objects are,


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5. Options

During the reporting year, no option to take up unissued shares of the society was granted.

During the reporting year, there were no shares of the society issued by virtue of the exercise of an option to take up unissued shares.

At the end of the reporting year, there were no unissued shares under option.

6. Independent auditor

Pinnally PAC has expressed willingness to accept re-appointment. On behalf of the directors .................................................. .................................................. DC Teong How Hwa LTC Lee Hai Guan Keith Chairman Honorary Treasurer


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Independent Auditor’s Report to the Members of CO-OPERATIVE OF SCDF EMPLOYEES LIMITED (Registration No: T05CS0239G)

Report on the audit of the financial statements Opinion We have audited the accompanying financial statements of Co-operative of SCDF Employees Limited (the “society”) and its subsidiaries (the “group”), which comprise the consolidated statement of financial position of the group and the statement of financial position of the society as at 31 March 2020, and the statement of profit or loss and other comprehensive income, statement of changes in equity and statement of cash flows of the group, and statement of profit or loss and other comprehensive income, statement of changes in equity of the society for the reporting year then ended, and notes to the financial statements, including the significant accounting policies. In our opinion, the accompanying consolidated financial statements of the group and the statement of financial position, statement of profit or loss and other comprehensive income, and statement of changes in equity of the society are properly drawn up in accordance with the provisions of the Co-operative Societies Act, Chapter 62 (“the Act”) and Singapore Financial Reporting Standards (SFRS) so as to give a true and fair view of the consolidated financial position of the group and the financial position of the society as at 31 March 2020 and of the consolidated financial performance, consolidated changes in equity and consolidated cash flows of the group and the changes in equity of the society for the reporting year ended on that date. Basis for opinion We conducted our audit in accordance with Singapore Standards on Auditing (SSAs). Our responsibilities under those standards are further described in the auditor’s responsibilities for the audit of the financial statements section of our report. We are independent of the group in accordance with the Accounting and Corporate Regulatory Authority (ACRA) Code of Professional Conduct and Ethics for Public Accountants and Accounting Entities (ACRA Code) together with the ethical requirements that are relevant to our audit of the financial statements in Singapore, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ACRA Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Other matters The financial statements for the reporting year ended 31 March 2019 were audited by other independent auditor whose report dated 2 September 2019 expressed an unqualified opinion on those financial statements. Other information Management is responsible for the other information. The other information comprises the statement by directors but does not include the financial statements and our auditor’s report thereon. Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.


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– 2 – Other information (cont’d) In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. Responsibilities of management and directors for the financial statements Management is responsible for the preparation of financial statements that give a true and fair view in accordance with the provisions of the Act and the financial reporting standards, and for devising and maintaining a system of internal accounting controls sufficient to provide a reasonable assurance that assets are safeguarded against loss from unauthorised use or disposition; and transactions are properly authorised and that they are recorded as necessary to permit the preparation of true and fair financial statements and to maintain accountability of assets. In preparing the financial statements, management is responsible for assessing the group’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the group or to cease operations, or has no realistic alternative but to do so. The directors’ responsibilities include overseeing the group’s financial reporting process. Auditor’s responsibilities for the audit of the financial statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SSAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. As part of an audit in accordance with SSAs, we exercise professional judgement and maintain professional scepticism throughout the audit. We also: a) Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. b) Obtain an understanding of internal control relevant to the audit in order to design audit

procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the group’s internal control.


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– 3 – Auditor’s responsibilities for the audit of the financial statements (cont’d) c) Evaluate the appropriateness of accounting policies used and the reasonableness of accounting

estimates and related disclosures made by management. d) Conclude on the appropriateness of management’s use of the going concern basis of accounting

and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our Independent Auditor’s Report to the Member of up to the date of our auditor’s report. However, future events or conditions may cause the group to cease to continue as a going concern.

e) Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

f) Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

We communicate with the directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. Report on other legal and regulatory requirements In our opinion, the accounting and other records required by the Act, Rules and By-Laws to be kept by the society have been properly kept in accordance with the provisions of the Act, Rules and By-Laws. The accounting and other records required by the Singapore Companies Act, Chapter 50 to be kept by the subsidiary incorporated in Singapore of which we are the auditor have been properly kept in accordance with the provisions of the Singapore Companies Act, Chapter 50. Pinnally PAC Public Accountants and Chartered Accountants Singapore


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Statements of Profit or Loss and Other Comprehensive Income


Group Society

Note 2020 2019 2020 2019

$ $ $ $

Revenue 4 17,897,594 15,507,723 497,934 854,868

Other gains 5 279,781 276,509 45,652 437,055

Purchase of inventories (1,733,604) (779,004) (162,876) (324,012)

Changes in inventories (13,066) (78,751) – –

Employee benefits expenses 6 (11,597,775) (11,294,862) (143,295) (498,542)

Depreciation expenses 10 (297,587) (295,964) – –

Finance costs 7 (46,275) – – –

Other expenses 8 (3,064,413) (2,934,944) (25,526) (49,947)

Other losses 5 (25,577) (29,026) – (6,803)

Share of profit of joint venture 11 1,899,794 1,864,500 – –

Profit before income tax and

contributions 3,298,872 2,236,181 211,889 412,619

Income tax expense 9 (575,756) (469,225) – –

Profit before contributions 2,723,116 1,766,956 211,889 412,619

Contributions to Central Co-

operative Fund 21 (10,594) (20,631) (10,594) (20,631)

Profit from continuing

operations for the year 2,712,522 1,746,325 201,295 391,988

The accompanying notes form an integral part of these financial statements.


19

Statements of Financial Position

As at 31 March 2020

Group Society

Note 2020 2019 2020 2019

$ $ $ $

ASSETS

Non-current assets

Property, plant and equipment 10 4,826,187 4,140,187 – –

Investment in joint venture 11 2,668,000 2,668,000 – –

Investment in subsidiary 12 – – 50,000 50,000

Other financial assets 13 144,928 144,928 – –

Total non-current assets 7,639,115 6,953,115 50,000 50,000

Current assets

Inventories 14 94,173 107,239 – –

Trade and other receivables 15 4,147,078 4,050,682 5,405 166,827

Other assets 16 4,449,908 1,664,197 50,364 50,129

Cash and cash equivalents 17 15,197,668 13,582,322 4,740,129 4,470,356

Total current assets 23,888,827 19,404,440 4,795,898 4,687,312

Total assets 31,527,942 26,357,555 4,845,898 4,737,312

EQUITY AND LIABILITIES

Equity

Share capital 18 346,580 343,620 346,580 343,620

Retained earnings 26,312,675 23,634,515 4,380,516 4,213,583

Total equity 26,659,255 23,978,135 4,727,096 4,557,203

Non-current liabilities

Other financial liability 19 842,347 – – –

Deferred tax liabilities 9 23,460 23,460 – –

Total non-current liabilities 865,807 23,460 – –

Current liabilities

Trade and other payables 20 3,427,341 1,922,921 108,208 159,478

Other financial liability 19 25,737 – – –

Central co-operative fund 21 10,594 20,631 10,594 20,631

Income tax payable 9 539,208 412,408 – –

Total current liabilities 4,002,880 2,355,960 118,802 180,109

Total liabilities 4,868,687 2,379,420 118,802 180,109

Total equity and liabilities 31,527,942 26,357,555 4,845,898 4,737,312



20

Statements of Changes in Equity


Total Share Retained

Group equity capital earnings

$ $ $

Current year:

Opening balance at 1 April 2019 23,978,135 343,620 23,634,515

Movements in equity:

Total comprehensive income for the year 2,712,522 – 2,712,522

Issue of share capital (Note 18) 2,960 2,960 –

Dividend declared (Note 22) (34,362) – (34,362)

Closing balance at 31 March 2020 26,659,255 346,580 26,312,675

Previous year:



Total comprehensive income for the year 1,746,325 – 1,746,325

Issue of share capital (Note 18) 700 700 –





21

Statements of Changes in Equity



Society equity capital earnings

$ $ $

Current year:



Total comprehensive income for the year 201,295 – 201,295

Issue of share capital (Note 18) 2,960 2,960 –



Previous year:



Total comprehensive income for the year 391,988 – 391,988

Issue of share capital (Note 18) 700 700 –





22

Consolidated Statement of Cash Flows


Group

2020 2019

$ $

Cash flows from operating activities

Profit before tax and contributions 3,298,872 2,236,181

Adjustments for:

Allowance for impairment of trade receivables 20,120 47,629

Depreciation of property, plant and equipment 297,587 295,964

Interest income (81,722) (58,723)

Interest expense 46,275 –

Share of profit of joint venture (1,899,794) (1,864,500)

Operating cash flows before changes in working capital 1,681,338 656,551

Inventories 13,066 78,751

Trade and other receivables (116,516) (43,070)

Other assets (2,776,891) 112,542

Trade and other payables 1,504,419 (524,976)

Net cash flows from operations 305,416 279,798

Contributions paid to Central Co-operative Fund (20,631) (13,045)

Income tax paid (448,956) (686,833)

Net cash flows used in operating activities (164,171) (420,080)

Cash flows from investing activities

Placement of fixed deposits (1,000,000) (2,500,000)

Purchase of plant and equipment (91,080) (84,448)

Interest income – 22,447

Proceeds received from a joint venture 1,899,794 1,864,500

Net cash flow from (used in) investing activities 808,714 (697,501)

Cash flows from financing activities

Repayments of principal portion of lease liability (24,423) –

Interest paid (46,275) –

Dividends paid to equity owners (34,362) (34,292)

Issue of shares 2,960 700

Net cash flow used in financing activities (102,100) (33,592)

Net increase (decrease) in cash and cash equivalents 542,443 (1,151,173)

Cash and cash equivalents, beginning balance 8,548,866 9,700,039

Cash and cash equivalents, ending balance (Note 17A) 9,091,309 8,548,866


CO-OPERATIVE OF SCDF EMPLOYEES LIMITED (Registration No: T05CS0239G

23

Notes to the Financial Statements 31 March 2020 1. General

The society is registered in Singapore under the Co-operative Societies Act, Chapter 62. The financial statements are presented in Singapore dollars and they cover the society (referred to as “parent”) and the subsidiary. The board of directors approved and authorised these financial statements for issue on the date of the statement by directors. The principal activities of the society are to deal in fire safety and related products and to provide security services. The principal activities of the subsidiary is disclosed in Note 12 to the financial statements. The registered office is: 37 Gul Avenue, Singapore 629677. The society is situated in Singapore. Statement of compliance with financial reporting standards

These financial statements have been prepared in accordance with the Singapore Financial Reporting Standards (“SFRSs”) and the related interpretations to SFRS (“INT SFRS”) as issued by the Singapore Accounting Standards Council. They are in compliance with the provisions of the Co-operative Societies Act, Chapter 62.

Accounting convention The financial statements are prepared on a going concern basis under the historical cost convention except where a financial reporting standard requires an alternative treatment (such as fair values) as disclosed where appropriate in these financial statements. The accounting policies in the financial reporting standards may not be applied when the effect of applying them is not material. The disclosures required by financial reporting standards may not be provided if the information resulting from that disclosure is not material.

Basis of preparation of financial statements The preparation of financial statements in conformity with generally accepted accounting principles requires the management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting year. Actual results could differ from those estimates. The estimates and assumptions are reviewed on an ongoing basis. Apart from those involving estimations, management has made judgements in the process of applying the group’s accounting policies. The areas requiring management’s most difficult, subjective or complex judgements, or areas where assumptions and estimates are significant to the financial statements, are disclosed at the end of this footnote, where applicable.


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1. General (cont’d) Basis of presentation The consolidated financial statements include the financial statements made up to the end of the reporting year of the society and all of its subsidiaries. The consolidated financial statements are the financial statements of the group (the parent and its subsidiaries) presented as those of a single economic entity and are prepared using uniform accounting policies for like transactions and other events in similar circumstances. All significant intragroup balances and transactions are eliminated on consolidation. Subsidiaries are consolidated from the date the reporting entity obtains control of the investee and cease when the reporting entity loses control of the investee. Changes in the group’s ownership interest in a subsidiary that do not result in the loss of control are accounted for within equity as transactions with owners in their capacity as owners. The carrying amounts of the group's and non-controlling interests are adjusted to reflect the changes in their relative interests in the subsidiary. When the group loses control of a subsidiary it derecognises the assets and liabilities and related equity components of the former subsidiary. Any gain or loss is recognised in profit or loss. Any investment retained in the former subsidiary is measured at fair value at the date when control is lost and is subsequently accounted as available-for-sale financial assets in accordance with the financial reporting standard on financial instruments.

The Society's separate financial statements have been prepared on the same basis.

2. Significant accounting policies and other explanatory information

2A. Significant accounting policies Revenue recognition The financial reporting standard on revenue from contracts with customers establishes a five-step model to account for revenue arising from contracts with customers. Revenue is recognised at an amount that reflects the consideration to which the entity expects to be entitled in exchange for transferring goods or services to a customer (which excludes estimates of variable consideration that are subject to constraints, such as right of return exists, trade discounts, volume rebates and changes to the transaction price arising from modifications), net of any related sales taxes and excluding any amounts collected on behalf of third parties. An asset (goods or services) is transferred when or as the customer obtains control of that asset. As a practical expedient the effects of any significant financing component is not adjusted if the payment for the good or service will be within one year.

Sale of goods. Revenue is recognised at a point in time when the performance obligation is satisfied by transferring a promised good or service to the customer. Control of the goods is transferred to the customer, generally on delivery of the goods (in this respect, incoterms are considered). Distinct goods or services in a series - For distinct goods or services in a series such as routine or recurring service contracts where the promise under the contract is for a specified quantity of goods or services that meets the over time criteria or is a stand-ready or single continuous service and if the nature of each good or service is distinct, substantially the same and has the same pattern of transfer or each time increment is distinct, then revenue is recognised at the amount that the entity has the right to bill a fixed amount for each unit of goods or service provided.


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2. Significant accounting policies and other explanatory information (cont’d)

2A. Significant accounting policies (cont’d) Interest income Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable. Government grants Government grants are recognised at fair value when there is reasonable assurance that the conditions attaching to them will be complied with and that the grants will be received. Grants in recognition of specific expenses are recognised in profit or loss on a systematic basis over the periods necessary to match them with the related costs that they are intended to compensate. The grant related to assets is presented in the statement of financial position by recognising the grant as deferred income that is recognised in profit or loss on a systematic basis over the useful life of the asset and in the proportions in which depreciation expense on those assets is recognised. Employee benefits Contributions to a defined contribution retirement benefit plan are recorded as an expense as they fall due. The entity's legal or constructive obligation is limited to the amount that it agrees to contribute to an independently administered fund (such as the Central Provident Fund in Singapore, a government managed defined contribution retirement benefit plan). For employee leave entitlement the expected cost of short-term employee benefits in the form of compensated absences is recognised in the case of accumulating compensated absences, when the employees render service that increases their entitlement to future compensated absences; and in the case of non-accumulating compensated absences, when the absences occur. A liability for bonuses is recognised where the entity is contractually obliged or where there is constructive obligation based on past practice.

Borrowing costs Borrowing costs are interest and other costs incurred in connection with the borrowings. Interest expense is calculated using the effective interest rate method. Borrowing costs are recognised as an expense in the period in which they are incurred except that borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset that necessarily take a substantial period of time to get ready for their intended use or sale are capitalised as part of the cost of that asset until substantially all the activities necessary to prepare the qualifying asset for its intended use or sale are complete.

Foreign currency transactions

The functional currency is the Singapore dollar as it reflects the primary economic environment in which the entity operates. Transactions in foreign currencies are recorded in the functional currency at the rates ruling at the dates of the transactions. At each end of the reporting year, recorded monetary balances and balances measured at fair value that are denominated in non-functional currencies are reported at the rates ruling at the end of the reporting year and fair value measurement dates respectively. All realised and unrealised exchange adjustment gains and losses are dealt with in profit or loss except when recognised in other comprehensive income and if applicable deferred in equity such as for qualifying cash flow hedges. The presentation is in the functional currency.


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2. Significant accounting policies and other explanatory information (cont’d) 2A. Significant accounting policies (cont’d)

Income tax The income taxes are accounted using the asset and liability method that requires the recognition of taxes payable or refundable for the current year and deferred tax liabilities and assets for the future tax consequence of events that have been recognised in the financial statements or tax returns. The measurements of current and deferred tax liabilities and assets are based on provisions of the enacted or substantially enacted tax laws; the effects of future changes in tax laws or rates are not anticipated. Tax expense (tax income) is the aggregate amount included in the determination of profit or loss for the reporting year in respect of current tax and deferred tax. Current and deferred income taxes are recognised as income or as an expense in profit or loss unless the tax relates to items that are recognised in the same or a different period outside profit or loss. For such items recognised outside profit or loss the current tax and deferred tax are recognised (a) in other comprehensive income if the tax is related to an item recognised in other comprehensive income and (b) directly in equity if the tax is related to an item recognised directly in equity. Deferred tax assets and liabilities are offset when they relate to income taxes levied by the same income tax authority. The carrying amount of deferred tax assets is reviewed at each end of the reporting year and is reduced, if necessary, by the amount of any tax benefits that, based on available evidence, are not expected to be realised. A deferred tax amount is recognised for all temporary differences, unless the deferred tax amount arises from the initial recognition of an asset or liability in a transaction which (i) is not a business combination; and (ii) at the time of the transaction, affects neither accounting profit nor taxable profit (tax loss).

Subsidiaries

A subsidiary is an entity including unincorporated and special purpose entity that is controlled by the reporting entity and the reporting entity is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. The existence and effect of substantive potential voting rights that the reporting entity has the practical ability to exercise (that is, substantive rights) are considered when assessing whether the reporting entity controls another entity. In the reporting entity’s separate financial statements, an investment in a subsidiary is accounted for at cost less any allowance for impairment in value. Impairment loss recognised in profit or loss for a subsidiary is reversed only if there has been a change in the estimates used to determine the asset’s recoverable amount since the last impairment loss was recognised. The carrying value and the net book value of the investment in a subsidiary are not necessarily indicative of the amount that would be realised in a current market exchange.

Joint arrangement – joint venture A joint arrangement (that is, either a joint operation or a joint venture, depending on the rights and obligations of the jointly controlling parties to the arrangement), is one in which the reporting entity is party to an arrangement of which two or more parties have joint control, which is the contractually agreed sharing of control of the arrangement; it exists only when decisions about the relevant activities (that is, activities that significantly affect the returns of the arrangement) require the unanimous consent of the parties sharing control. In a joint venture, the parties with joint control have rights to the net assets of the arrangement. The reporting interests in joint ventures are recognised using the equity method in accordance with the financial reporting standard on investments in joint ventures.


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2A. Significant accounting policies (cont’d)

Joint arrangement – joint venture (cont’d) Under the equity method the investment is initially recognised at cost and adjusted thereafter for the post-acquisition change in the investor’s share of the investee’s net assets. The carrying value and the net book value of the investment in the joint venture are not necessarily indicative of the amounts that would be realised in a current market exchange. The investor’s profit or loss includes its share of the investee’s profit or loss and the investor’s other comprehensive income includes its share of the investee’s other comprehensive income. Losses of a joint venture in excess of the reporting entity’s interest in the relevant joint venture are not recognised except to the extent that the reporting entity has an obligation. Profits and losses resulting from transactions between the reporting entity and a joint venture are recognised in the financial statements only to the extent of unrelated reporting entity’s interests in the joint venture. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Accounting policies of joint venture are changed where necessary to ensure consistency with the policies adopted by the reporting entity. The reporting entity discontinues the use of the equity method from the date that when its investment ceases to be a joint venture and accounts for the investment in accordance with the financial reporting standard on financial instruments from that date. Any gain or loss is recognised in profit or loss. Any investment retained in the former joint venture is measured at fair value at the date that it ceases to be a joint venture. In the group’s separate financial statements, an investment in a joint venture is accounted for at cost less any allowance for impairment in value. Impairment loss recognised in profit or loss for a joint venture is reversed only if there has been a change in the estimates used to determine the asset’s recoverable amount since the last impairment loss was recognised. The carrying value and the net book value of an investment in the joint venture are not necessarily indicative of the amounts that would be realised in a current market exchange. Business combinations There were no business combinations during the reporting year. Property, plant and equipment Property, plant and equipment are carried at cost on initial recognition and after initial recognition at cost less any accumulated depreciation and any accumulated impairment losses. Depreciation is provided on a straight-line basis to allocate the gross carrying amounts of the assets less their residual values over their estimated useful lives of each part of an item of these assets as follows:

Leasehold property 21 - 60 years Plant and equipment 5 years Renovation 3 years Computer equipment 3 years

An asset is depreciated when it is available for use until it is derecognised even if during that period the item is idle. Fully depreciated assets still in use are retained in the financial statements.


28


2A. Significant accounting policies (cont’d) Property, plant and equipment (cont’d) The gain or loss arising from the derecognition of an item of plant and equipment is measured as the difference between the net disposal proceeds, if any, and the carrying amount of the item and is recognised in profit or loss. The residual value and the useful life of an asset is reviewed at least at each end of the reporting year and, if expectations differ significantly from previous estimates, the changes are accounted for as a change in an accounting estimate, and the depreciation charge for the current and future periods are adjusted. Cost also includes acquisition cost, borrowing cost capitalised and any cost directly attributable to bringing the asset or component to the location and condition necessary for it to be capable of operating in the manner intended by management. Subsequent costs are recognised as an asset only when it is probable that future economic benefits associated with the item will flow to the entity and the cost of the item can be measured reliably. All other repairs and maintenance are charged to profit or loss when they are incurred. Leases These accounting policies are applied on and after the initial application date of FRS 116, 1 January 2019: The group assesses at contract inception whether a contract is, or contains, a lease. That is, if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. (a) As lessee

The group applies a single recognition and measurement approach for all leases, except for short-term leases and leases of low-value assets. The group recognises lease liabilities representing the obligations to make lease payments and right-of-use assets representing the right to use the underlying leased assets. Right-of-use assets The group recognises right-of-use assets at the commencement date of the lease (i.e. the date the underlying asset is available for use). Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any remeasurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognised, initial direct costs incurred, and lease payments made at or before the commencement date less any lease incentives received. Right-of-use assets are depreciated on a straight-line basis over the shorter of the lease term and the estimated useful lives of the assets. If ownership of the leased asset transfers to the group at the end of the lease term or the cost reflects the exercise of a purchase option, depreciation is calculated using the estimated useful life of the asset. The right-of-use assets are also subject to impairment. The group’s right-of-use assets are presented within Note to property, plant and equipment.


29


2A. Significant accounting policies (cont’d) Leases (cont’d) (a) As lessee (cont’d)

Lease liabilities At the commencement date of the lease, the group recognises lease liabilities measured at the present value of lease payments to be made over the lease term. The lease payments include fixed payments (including in-substance fixed payments) less any lease incentives receivable, variable lease payments that depend on an index or a rate, and amounts expected to be paid under residual value guarantees. The lease payments also include the exercise price of a purchase option reasonably certain to be exercised by the group and payments of penalties for terminating the lease, if the lease term reflects the group exercising the option to terminate. Variable lease payments that do not depend on an index or a rate are recognised as expenses (unless they are incurred to produce inventories) in the period in which the event or condition that triggers the payment occurs. In calculating the present value of lease payments, the group uses its incremental borrowing rate at the lease commencement date because the interest rate implicit in the lease is not readily determinable. After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made. In addition, the carrying amount of lease liabilities is remeasured if there is a modification, a change in the lease term, a change in the lease payments (e.g. changes to future payments resulting from a change in an index or rate used to determine such lease payments) or a change in the assessment of an option to purchase the underlying asset. The group’s lease liabilities are included in Note to other financial liabilities. Short-term leases and leases of low-value assets The group applies the short-term lease recognition exemption to its short-term leases of machinery (i.e. those leases that have a lease term of 12 months or less from the commencement date and do not contain a purchase option). It also applies the lease of low-value assets recognition exemption to leases of office equipment that are considered to be low value. Lease payments on short-term leases and leases of low value assets are recognised as expense on a straight-line basis over the lease term. These accounting policies are applied before the initial application date of FRS 116, 1 January 2019: (a) As lessee Finance leases which transfer to the group substantially all the risks and rewards incidental to ownership of the leased item, are capitalised at the inception of the lease at the fair value of the leased asset or, if lower, at the present value of the minimum lease payments. Any initial direct costs are also added to the amount capitalised. Lease payments are apportioned between the finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are charged to profit or loss. Contingent rents, if any, are charged as expenses in the periods in which they are incurred.


30


2A. Significant accounting policies (cont’d) Leases (cont’d) (a) As lessee (cont’d) Capitalised leased assets are depreciated over the shorter of the estimated useful life of the asset and the lease term, if there is no reasonable certainty that the group will obtain ownership by the end of the lease term. Operating lease payments are recognised as an expense in profit or loss on a straight-line basis over the lease term. The aggregate benefit of incentives provided by the lessor is recognised as a reduction of rental expense over the lease term on a straight-line basis. Inventories Inventories are measured at the lower of cost (weighted average method) and net realisable value. Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale. Cost includes all costs of purchase, costs of conversion and other costs incurred in bringing the inventories to their present location and condition. Impairment of non-financial assets Irrespective of whether there is any indication of impairment, an annual impairment test is performed at the same time every year on an intangible asset with an indefinite useful life or an intangible asset not yet available for use. The carrying amount of other non-financial assets is reviewed at each end of the reporting year for indications of impairment and where an asset is impaired, it is written down through profit or loss to its estimated recoverable amount. The impairment loss is the excess of the carrying amount over the recoverable amount and is recognised in profit or loss. The recoverable amount of an asset or a cash-generating unit is the higher of its fair value less costs of disposal and its value in use. When the fair value less costs of disposal method is used, any available recent market transactions are taken into consideration. When the value in use method is adopted, in assessing the value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash-generating units). At each end of the reporting year non-financial assets other than goodwill with impairment loss recognised in prior periods are assessed for possible reversal of the impairment. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been measured, net of depreciation or amortisation, if no impairment loss had been recognised.


31


2A. Significant accounting policies (cont’d) Financial instruments Recognition and derecognition of financial instruments: A financial asset or a financial liability is recognised in the statement of financial position when, and only when, the entity becomes party to the contractual provisions of the instrument. All other financial instruments (including regular-way purchases and sales of financial assets) are recognised and derecognised, as applicable, using trade date accounting or settlement date accounting. A financial asset is derecognised when the contractual rights to the cash flows from the financial asset expire or it transfers the rights to receive the contractual cash flows in a transaction in which substantially all of the risks and rewards of ownership of the financial asset are transferred or in which the entity neither transfers nor retains substantially all of the risks and rewards of ownership and it does not retain control of the financial asset. A financial liability is removed from the statement of financial position when, and only when, it is extinguished, that is, when the obligation specified in the contract is discharged or cancelled or expires. At initial recognition the financial asset or financial liability is measured at its fair value plus or minus, in the case of a financial asset or financial liability not at fair value through profit or loss, transaction costs that are directly attributable to the acquisition or issue of the financial asset or financial liability. Classification and measurement of financial assets: 1. Financial asset classified as measured at amortised cost: A financial asset is measured at

amortised cost if it meets both of the following conditions and is not designated as at fair value through profit or loss (FVTPL), that is (a) the asset is held within a business model whose objective is to hold assets to collect contractual cash flows; and (b) the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. Typically trade and other receivables, bank and cash balances are classified in this category.

2. Financial asset that is a debt asset instrument classified as measured at fair value through

other comprehensive income (FVTOCI): There were no financial assets classified in this category at reporting year end date.

3. Financial asset that is an equity investment classified as measured at fair value through

other comprehensive income (FVTOCI): On initial recognition of an equity investment that is not held for trading, an irrevocably election may be made to present subsequent changes in fair value in OCI. This election is made on an investment-by-investment basis. Fair value changes are recognised in OCI but dividends are recognised in profit or loss unless the dividend clearly represents a recovery of part of the cost of the investment. The gain or loss that is presented in OCI includes any related foreign exchange component arising on non-monetary investments (eg, equity instruments). On disposal, the cumulative fair value changes are not recycled to profit or loss but remain in reserves within equity. The weighted average or specific identification method is used when determining the cost basis of equities being disposed of.

4. Financial asset classified as measured at fair value through profit or loss (FVTPL): There

were no financial assets classified in this category at reporting year end date.


32


2A. Significant accounting policies (cont’d) Financial instruments (cont’d)

Classification and measurement of financial liabilities:

Financial liabilities are classified as at fair value through profit or loss (FVTPL) in either of the following circumstances: (1) the liabilities are managed, evaluated and reported internally on a fair value basis; or (2) the designation eliminates or significantly reduces an accounting mismatch that would otherwise arise. All other financial liabilities are carried at amortised cost using the effective interest method. Reclassification of any financial liability is not permitted. Cash and cash equivalents Cash and cash equivalents in the statement of cash flows include bank and cash balances, on demand deposits and any highly liquid debt asset instruments purchased with an original maturity of three months or less. For the statement of cash flows the item includes cash and cash equivalents less cash subject to restriction and bank overdrafts payable on demand that form an integral part of cash management.

Fair value measurement The fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When measuring the fair value of an asset or a liability, market observable data to the extent possible is used. If the fair value of an asset or a liability is not directly observable, an estimate is made using valuation techniques that maximise the use of relevant observable inputs and minimise the use of unobservable inputs (eg by use of the market comparable approach that reflects recent transaction prices for similar items, discounted cash flow analysis, or option pricing models refined to reflect the issuer’s specific circumstances). Inputs used are consistent with the characteristics of the asset / liability that market participants would take into account. The entity’s intention to hold an asset or to settle or otherwise fulfil a liability is not taken into account as relevant when measuring fair value. Fair values are categorised into different levels in a fair value hierarchy based on the degree to which the inputs to the measurement are observable and the significance of the inputs to the fair value measurement in its entirety: Level 1 fair value measurements are those derived from quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 fair value measurements are those derived from inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (ie as prices) or indirectly (ie derived from prices). Level 3 fair value measurements are those derived from valuation techniques that include inputs for the asset or liability that are not based on observable market data (unobservable inputs). Transfers between levels of the fair value hierarchy are recognised at the end of the reporting period during which the change occurred.

The carrying values of current financial instruments approximate their fair values due to the short-term maturity of these instruments and the disclosures of fair value are not made when the carrying amount of current financial instruments is a reasonable approximation of the fair value. The fair values of non-current financial instruments may not be disclosed separately unless there are significant differences at the end of the reporting year and in the event the fair values are disclosed in the relevant notes to the financial statements.


33

2. Significant accounting policies and other explanatory information (cont’d) 2B. Other explanatory information

Provisions A liability or provision is recognised when there is a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. A provision is made using best estimates of the amount required in settlement and where the effect of the time value of money is material, the amount recognised is the present value of the expenditures expected to be required to settle the obligation using a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the obligation. The increase in the provision due to passage of time is recognised as interest expense. Changes in estimates are reflected in profit or loss in the reporting year they occur. Classification of equity and liabilities

A financial instrument is classified as a liability or as equity in accordance with the substance of the contractual arrangement on initial recognition. Equity instruments are contracts that give a residual interest in the net assets of the reporting entity. Where the financial instrument does not give rise to a contractual obligation on the part of the issuer to make payment in cash or kind under conditions that are potentially unfavourable, it is classified as an equity instrument. Ordinary shares are classified as equity. Equity instruments are recognised at the amounts of proceeds received net of incremental costs directly attributable to the transaction. Dividends on equity are recognised as liabilities when they are declared. Interim dividends are recognised when declared by the directors.

2C. Critical judgements, assumptions and estimation uncertainties The critical judgements made in the process of applying the accounting policies that have the most significant effect on the amounts recognised in the financial statements and the key assumptions concerning the future, and other key sources of estimation uncertainty at the end of the reporting year, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities currently or within the next reporting year are discussed below. These estimates and assumptions are periodically monitored to ensure they incorporate all relevant information available at the date when financial statements are prepared. However, this does not prevent actual figures differing from estimates.

Net realisable value of inventories: A review is made on inventory for excess inventory and declines in net realisable value below cost and an allowance is recorded against the inventory balance for any such declines. The review requires management to consider the future demand for the products. In any case, the realisable value represents the best estimate of the recoverable amount and is based on the acceptable evidence available at the end of the reporting year and inherently involves estimates regarding the future expected realisable value. The usual considerations for determining the amount of allowance or write-down include ageing analysis, technical assessment and subsequent events. In general, such an evaluation process requires significant judgment and materially affects the carrying amounts of inventories at the end of the reporting year. Possible changes in these estimates could result in revisions to the stated value of the inventories. The carrying amount is disclosed in the Note on inventories.

Classification of joint venture: The group hold 66.7% interest in joint venture agreement as disclosed in Note 11. The group has joint control over this arrangement as under the contractual agreements, unanimous consent is required from all parties for all relevant activities.

The group’s joint venture is structured as an Emergency Ambulance Services Project (“Project”) and provides the group with rights to the net assets of the Project under the contractual agreements. Therefore, this arrangement is classified as a joint venture.


34


2C. Critical judgements, assumptions and estimation uncertainties (cont’d) Allowance for trade receivables: The trade receivables are subject to the expected credit loss model under the financial reporting standard on financial instruments. The expected lifetime losses are recognised from initial recognition of these assets. These assets are grouped based on shared credit risk characteristics and the days past due for measuring the expected credit losses. The allowance matrix is based on its historical observed default rates (over a period of certain months) over the expected life of the trade receivables and is adjusted for forward-looking estimates. At every reporting date the historical observed default rates are updated and changes in the forward-looking estimates are analysed. The loss allowance was determined accordingly. The carrying amounts might change materially within the next reporting year but these changes may not arise from assumptions or other sources of estimation uncertainty at the end of the reporting year. The carrying amount is disclosed in the Note on trade and other receivables. Revenue recognised over time: The group has revenue where the performance obligation is satisfied over time. Revenue is recognised over time by measuring the progress toward complete satisfaction of that performance obligation. A single method is applied consistently for measuring progress for each performance obligation satisfied over time. Judgment is required when selecting a output method for measuring progress toward complete satisfaction of a performance obligation. Assessing the satisfaction of performance obligations over time requires judgment and the consideration of many criteria that should be met to qualify such as whether the customer presently is obligated to pay for an asset, whether the customer has legal title, whether the entity has transferred physical possession of the asset, whether the customer has assumed the significant risks and rewards of ownership of the asset, and whether the customer has accepted the asset. Events and circumstances frequently do not occur as expected. Even if the events anticipated under the assumptions occur, actual results are still likely to be different from the estimates since other anticipated events frequently do not occur as expected and the variation may be material. The related account balances at the end of the reporting year are disclosed in the notes on revenues, contract assets and contract liabilities. Determination of lease term of contracts with extension options: The group determines the lease term as the non-cancellable term of the lease, together with any periods covered by an option to extend the lease if it is reasonably certain to be exercised, or any periods covered by an option to terminate the lease, if it is reasonably certain not to be exercised. The group has a lease contract that include extension option. The group applies judgement in evaluating whether it is reasonably certain whether or not exercise the option to extend the lease. That is, it considers all relevant factors that create an economic incentives for it to exercise the extension. After the commencement date, the group reassess the lease term whether there is a significant event or change in circumstances that is within its control and affects its ability to exercise or not to exercise the option to extend (e.g. construction of significant leasehold improvements or significant customisation to the leased asset). The group included the extension option in the lease term for leases of leasehold buildings because of the leasehold improvements made and the significant costs that would arise to replace the assets.


35

3. Related party relationships and transactions The financial reporting standard on related party disclosures requires the reporting entity to disclose: (a) transactions with its related parties; and (b) relationships between parents and subsidiaries irrespective of whether there have been transactions between those related parties. A party is related to a party if the party controls, or is controlled by, or can significantly influence or is significantly influenced by the other party.

A related party includes the committee members and key management of the Society. It also includes an entity or person that directly or indirectly controls, is controlled by, or is under common or joint control with these persons; members of the key management personnel or close members of the family of any individual referred to herein and others who have the ability to control, jointly control or significantly influence by or for which significant voting power in such entity resides with, directly or indirectly, any such individual. The members of the Management Committee are volunteers and receive no monetary remuneration for their contribution, except for reimbursement of out-of-pocket expenses.

3A. Members of a group:

Related companies in these financial statements include the members of the Society’s group of companies as disclosed in Note 11 and Note 12.

3B. Related party transactions:

There are transactions and arrangements between the reporting entity and members of the group and the effects of these on the basis determined between the parties are reflected in these financial statements. The intersociety balances are unsecured without fixed repayment terms and interest unless stated otherwise. For any non-current balances no interest or charge is imposed unless stated otherwise. Intragroup transactions and balances that have been eliminated in these consolidated financial statements are not disclosed as related party transactions and balances below. In addition to the transactions and balances disclosed elsewhere in the notes to the financial statements, this item includes the following: Significant related party transactions: Group Society 2020

$ 2019

$ 2020

$ 2019

$ Joint venture: Management service fees 120,000 120,000 – – Training and airfare fees 10,736 11,138 – – Sale of goods 6,500 – – –

3C. Key management personnel compensation

Key management personnel are those persons having authority and responsibility for planning,

directing and controlling the activities of the society, directly or indirectly, including any directors of

the society. The key management personnel are members of the Board of Directors of society and

they do not receive remuneration in consideration of his/her voluntary services rendered to the

society.


36

4. Revenue

4A. Revenue classified by type of good or service:

Group Society

2020

$ 2019

$ 2020

$ 2019

$

Consultancy services 2,931,175 2,636,992 – –

Manpower outsourcing services 6,260,436 5,995,163 – –

Maintenance services 162,848 95,686 119,448 58,219

Management services 120,000 120,000 – –

Safety services 3,532,314 3,558,900 190,890 372,690

Training services 2,109,752 1,825,707 – –

Sales of safety and security

goods 2,781,069 1,275,275 187,596 423,959

17,897,594 15,507,723 497,934 854,868

4B. Revenue classified by timing of revenue recognition:

Point in time 2,781,069 1,275,275 187,596 423,959

Over time 15,116,525 14,232,448 310,338 430,909

17,897,594 15,507,723 497,934 854,868

5. Other gains and (other losses)

Group Society

2020

$ 2019

$ 2020

$ 2019

$

Dividend income – – – 400,000

Government grants income 197,107 216,648 5,170 10,379

Interest income 81,722 58,723 35,308 25,837

Miscellaneous income 952 1,138 – 839

Currency exchange net gain

(loss) (25,577) (29,026) 5,174 (6,803)

254,204 247,483 45,652 430,252

Presented in profit or loss as:

Other gains 279,781 276,509 45,652 437,055

Other losses (25,577) (29,026) – (6,803)

254,204 247,483 45,652 430,252

6. Employee benefits expenses

Group Society

2020

$ 2019

$ 2020

$ 2019

$

Employee benefits expense 10,100,708 9,855,184 125,597 449,842 Contribution to defined contribution plans 1,387,838 1,326,175 17,432 48,245

Other benefits 109,229 113,503 266 455

Total employee benefits expense 11,597,775 11,294,862 143,295 498,542


37

7. Finance costs

Group Society

2020

$ 2019

$ 2020

$ 2019

$

Interest of lease liability (Note 19) 46,275 – – –

8. Other expenses

The major components and other selected components include the following:

Group Society

2020

$ 2019

$ 2020

$ 2019

$

Cost of services 1,921,614 1,855,589 319 5,100

Insurance 121,372 121,075 7,000 12,033

IT expenses 104,602 129,653 – –

Legal and professional fee 132,321 45,617 – 2,500

Rental of land – 70,698 – –

Repair and maintenance expenses 74,767 56,758 – –

Staff annual leave 125,000 37,000 – –

Training 74,908 128,240 1,520 200

Upkeep of motor vehicles expenses 32,591 58,302 – –

Utilities expenses 54,448 53,130 – –

9. Income tax

9A. Components of tax expense recognised in profit or loss include:

Group 2020

$ 2019

$ Current tax expense: Current tax expense 539,208 412,408 Under adjustments in respect of prior periods 36,548 52,275 575,756 464,683 Deferred tax expense: Under adjustments in respect of prior periods – 4,542

Total income tax expense 575,756 469,225

The income tax in profit or loss varied from the amount of income tax amount determined by applying the Singapore income tax rate of 17 % (2019: 17 %) to profit before tax as a result of the following differences:


38

9. Income tax (cont’d)

9A. Components of tax expense recognised in profit or loss include: (cont’d) Group 2020

$ 2019

$ Profit before tax 3,298,872 2,236,181

Income tax expense at the above rate 560,808 380,151 Income not subject to tax (36,021) (2,145) Expenses not deductible 59,650 61,994 Utilisation of capital allowances (12,804) (10,167) Stepped income exemption (32,425) (17,425) Deferred income tax – 4,542 Under adjustments in respect of prior periods 36,548 52,275


The Society is registered under the Co-operative Societies Act, Chapter 62 which is exempted from income tax under Section 13 of the Income Tax Act, Chapter 134, the tax incurred is pertaining to the Society’s subsidiary’s income tax expense.

9B. Deferred tax expense recognised in profit or loss includes:

Group 2020

$ 2019

$

Excess of net book value over tax written down value of property, plant and equipment – 4,542

9C. Deferred tax balance in the statement of financial position:

Group 2020

$ 2019

$

Deferred tax liabilities:

Beginning of financial year 23,460 18,918

Excess of net book value over tax written down value of

plant and equipment –

4,542

End of financial year 23,460 23,460


39

10. Plant and equipment

Leasehold land and property

Plant and equipment Renovation

Computer equipment Total

$ $ $ $ $ Group Cost: At 1 April 2018 4,523,712 1,262,164 2,008,721 334,713 8,129,310 Additions – 82,415 – 2,033 84,448

At 31 March 2019 4,523,712 1,344,579 2,008,721 336,746 8,213,758 Additions 892,507 7,000 57,850 26,230 983,587 Disposals – (195,466) – (41,786) (237,252)

At 31 March 2020 5,416,219 1,156,113 2,066,571 321,190 8,960,093

Accumulated depreciation: At 1 April 2018 402,447 1,088,244 1,981,922 304,994 3,777,607 Depreciation for the year 174,024 80,737 25,040 16,163 295,964

At 31 March 2019 576,471 1,168,981 2,006,962 321,157 4,073,571 Depreciation for the year 217,044 56,892 8,912 14,739 297,587 Disposals – (195,466) – (41,786) (237,252)

At 31 March 2020 793,515 1,030,407 2,015,874 294,110 4,133,906

Carrying value: At 1 April 2018 4,121,265 173,920 26,799 29,719 4,351,703

At 31 March 2019 3,947,241 175,598 1,759 15,589 4,140,187

At 31 March 2020 4,622,704 125,706 50,697 27,080 4,826,187




$ $ $ $ $ Society Cost: At 1 April 2018 – 195,466 – 41,786 237,252 Additions – – – – –

At 31 March 2019 – 195,466 – 41,786 237,252 Disposals – (195,466) – (41,786) (237,252)

At 31 March 2020 – – – – –

Accumulated depreciation: At 1 April 2018 – 195,466 – 41,786 237,252 Depreciation for the year – – – – –

At 31 March 2019 – 195,466 – 41,786 237,252 Disposals – (195,466) – (41,786) (237,252)

At 31 March 2020 – – – – –

Carrying value: At 1 April 2018, 31 March 2019 and 31 March 2020 – – – – –


40

10. Plant and equipment (cont’d)

There are restrictions or covenants imposed by the leases to sublet the asset to another party. The right-of-use asset can only be used by the lessee. Unless permitted by the owner, the leases prohibit selling or pledging the underlying leased asset as security. Typically, the leases are either non-cancellable or may only be cancelled by incurring a substantive termination fee. For lease over property, the lease require the property in a good state of repair and return the property in their original condition at the end of the lease. Insurance and maintenance fees on right-of-use asset are usually required under the lease contract. For property lease management has elected to measure the right-of-use asset as if the new standard had been applied since the start of the lease, but using the incremental borrowing rate as at 1 April 2019. The right-of-use asset is set equal to the lease liability on the date of initial application.

11. Investment in joint venture

Group 2020 2019 $ $ Interest in joint venture, at cost 2,668,000 2,668,000

Name of Joint Venture, country of incorporation, place of operations and principal activities

Percentage of equity held by the group

2020 2019 % % Emergency Ambulance Services Project #a with Unistrong Technology (S) Pte. Ltd. 66.7% 66.7% Singapore Emergency ambulance services

#a The financial statement of joint venture is unaudited. Unistrong Technology (S) Pte. Ltd. (“UT”) and the group (“the parties”) set up a contractual agreement to work together for the purpose of provision of an Emergency Ambulance Service (“EAS”). The parties agreed to carry out the services by establishing a separate vehicle (a sub-division call EAS project under UT). The parties have 33.3% (UT) and 66.7% (the group) of interest respectively in the joint venture. The joint venture agreement establishes joint control of the activities of EAS project. The joint arrangement is carried out through a separate vehicle whose legal form confers separation between the parties and the separate vehicle and the parties have rights to the net assets of EAS project. The parties recognise their rights to the net assets of EAS project as investments and account for them using the equity method.


41

11. Investment in joint venture (cont’d) Summarised financial information in respect of EAS project. based on its FRS financial statements, and reconciliation with the carrying amount of the investment in the financial statements are as follows: Summarised statement of financial position 2020 2019 $ $

Inventories 66,854 71,292 Trade and other receivables 3,512,122 2,015,141 Cash and cash equivalents 1,649,631 2,701,532

Current assets 5,228,606 4,787,965 Non-current assets 399,718 1,105,696

Total assets 5,628,324 5,893,661

Current liabilities (1,628,324) (1,893,661)

Total liabilities (1,628,324) (1,893,661)

Net assets 4,000,000 4,000,000 Proportion of the Society’s ownership 66.7% 66.7% Society’s share of net assets 2,668,000 2,668,000

Carrying amount of investment 2,668,000 2,668,000

Summarised statement of profit or loss and other comprehensive income 2020 2019 $ $

Revenue 12,028,200 11,873,200 Cost of sales (346,820) (270,921) Other income 199,885 136,163 Operating expenses (9,032,999) (8,943,090)

Profit before tax 2,848,266 2,795,352 Other comprehensive income – –

Total comprehensive income 2,848,266 2,795,352

Share of profit to the group at 66.7% 1,899,794 1,864,500

12. Investment in subsidiary Society 2020 2019 $ $

Unquoted equity shares, at cost 50,000 50,000

As at end of the reporting period, details of the subsidiaries are as follow:


42

12. Investment in subsidiary (cont’d)

Name of subsidiary, country of incorporation, place of operations and principal activities

Effective percentage of equity

2020 %

2019 %

Held by society COSEM Safety & Security Services Pte. Ltd. #a 100 100 Singapore Fire safety products and provision of training services Held by subsidiary COSEM HR Capital and Consultancy Pte. Ltd. #b 100 – Singapore Employment agencies activities (excluding maid agencies)

#a Audited by Pinnally PAC, Public Accountants and Chartered Accountants in Singapore #b Incorporated on 1 February 2020 and the management financial statement is unaudited.

13. Other financial assets

Group Society

2020 2019 2020 2019

$ $ $ $

Unquoted equity shares at FVTOCI Beginning of financial year 144,928 – – – Reclassification at 1 April 2018 upon adoption of FRS 109 – 144,928 – –

144,928 144,928 – –

14. Inventories

Group Society

2020

$ 2019

$ 2020

$ 2019

$

Goods for resale:

Finished goods 94,173 107,239 – –

The cost of inventories recognised as expense and included in “inventories and trading merchandise” amounted to $1,746,670 (2019: $857,755).

15. Trade and other receivables

Group Society

2020

$ 2019

$ 2020

$ 2019

$

Trade receivables: Outside parties 3,298,908 2,990,321 5,393 166,815 Less allowance for impairment (22,025) (47,629) – – Joint venture 870,183 1,107,978 – –

Net trade receivables – subtotal 4,147,066 4,050,670 5,393 166,815


43

15. Trade and other receivables (cont’d)

Group Society

2020

$ 2019

$ 2020

$ 2019

$

Other receivables: Outside parties 12 12 12 12

Net other receivables – subtotal 12 12 12 12

Total trade and other receivables 4,147,078 4,050,682 5,405 166,827

Movement in loss allowance on trade receivables: Balance at beginning of the year 47,629 – – – Allowance for impairment of trade receivables – 47,629 – – Bad debts written off (25,604) – – –

Balance at end of the year 22,025 47,629 – –

The trade receivables are subject to the expected credit loss model under the financial reporting standard on financial instruments. The methodology applied for impairment loss is the simplified approach to measuring expected credit losses (ECL) which uses a lifetime expected loss allowance for all trade receivables. The expected lifetime losses are recognised from initial recognition of these assets. These assets are grouped based on shared credit risk characteristics and the days past due for measuring the expected credit losses. The allowance matrix is based on its historical observed default rates over a period of 12 months over the expected life of the trade receivables and is adjusted for forward-looking estimates.

At every reporting date the historical observed default rates are updated and changes in the forward-looking estimates are analysed. The loss allowance was determined as follows for both trade receivables:

Group Gross amount

ELR

Loss allowance

$ % $

2020:

Current 2,120,639 0.00% –

Past due 1 to 365 days 2,040,349 0.00% –

> 365 days 8,103 100.00% 8,103

4,169,091 8,103

2019:

Current 1,137,406 0.00% –

Past due 1 to 365 days 2,913,625 0.00% –

> 365 days 47,268 100.00% 47,268

4,098,299 47,268

Society Gross amount

ELR

Loss allowance

$ % $

2020:

Current 5,393 0.00% –

Past due 1 to 365 days – 0.00% –

> 365 days – 100.00% –

5,393 –


44


Society Gross amount

ELR

Loss allowance

$ % $

2019:

Current – 0.00% –

Past due 1 to 365 days 166,815 0.00% –

> 365 days – 100.00% –

166,815 –

At each subsequent reporting date, an evaluation is made whether there is a significant change in credit risk by comparing the debtor’s credit risk at initial recognition (based on the original, unmodified cash flows) with the credit risk at the reporting date (based on the modified cash flows). Adjustment to the loss allowance is made for any increase or decrease in credit risk.

As part of the process of setting customer credit limits, different credit terms are used. The average credit period generally granted to trade customers is about 30 days (2019: 30 days). But some customers take a longer period to settle the amounts.

Concentration of trade receivables customers net of allowance for impairment as at the end of reporting year:

Group Society

2020

$ 2019

$ 2020

$ 2019

$

Government bodies 1,281,533 813,381 5,393 166,571

Non-government bodies 2,865,533 3,237,289 – 244

4,147,066 4,050,670 5,393 166,815

The other receivables at amortised cost shown above are subject to the expected credit loss model under the financial reporting standard on financial instruments. The other receivables at amortised cost and which can be graded as low risk individually are considered to have low credit risk. At the end of the first reporting period a loss allowance is recognised at an amount equal to 12 month expected credit losses because there has not been a significant increase in credit risk since initial recognition. No loss allowance is necessary.


Other receivable due from subsidiary is unsecured, interest-free, repayable on demand. Other receivable are considered to have low credit risk as they are not due for payment at the end of the reporting period and there has been no significant increase in the risk of default on the receivables since initial recognition.


45

16. Other assets

Group Society

2020

$ 2019

$ 2020

$ 2019

$

Contract assets (Note 16A) 812,173 886,668 – – Deposits 3,322,897 473,647 32,027 32,027 Interest receivables 56,455 47,635 18,337 18,102 Prepayments 258,383 256,247 – –

Total other assets 4,449,908 1,664,197 50,364 50,129

16A. Contract assets

The amount is made up of: Consideration for work completed but not billed at the reporting date 812,173 886,668 – –

The movements in contract assets are as follows:

Group Society

2020

$ 2019

$ 2020

$ 2019

$

At beginning of the year 886,668 – – – Transfer to revenue for performance obligation satisfied (886,668) – – – Consideration for work completed but not billed at the reporting date 812,173 886,668 – –

At end of the year 812,173 886,668 – –

The contract assets are for: entity’s rights to consideration for work completed but not billed at the reporting date on the contracts; costs incurred to obtain or fulfil a contract with a customer; costs to obtain contracts with customers; pre-contract costs and setup costs; and the amount of amortisation and any impairment losses recognised in the reporting year. The contract assets are transferred to the receivables when the rights become unconditional. The entity recognises revenue for each respective performance obligation when control of the product or service transfers to the customer.

17. Cash and cash equivalents

Group Society

2020

$ 2019

$ 2020

$ 2019

$

Not restricted in use 9,091,309 8,548,866 2,684,349 2,449,650

Short-term deposits 6,106,359 5,033,456 2,055,780 2,020,706

Cash at end of the year 15,197,668 13,582,322 4,740,129 4,470,356

The short-term deposits has a maturity period of 12 months (2019: 12 months) and interest rates of ranging from 0.85% to 1.70% (2019: 0.85% to 1.80%) per annum.


46

18. Share capital Group and Society

Number of shares

issued Share capital

$ Ordinary shares of no par value: At beginning of the year 1 April 2018 342,920 342,920 Issuance of shares 700 700

At end of the year 31 March 2019 343,620 343,620 Issuance of shares 2,960 2,960

At end of the year 31 March 2020 346,580 346,580

The ordinary shares of no par value are fully paid, carry one vote each and have no right to fixed income. The group is not subject to any externally imposed capital requirements.

(a) Only ordinary members may vote in any general meeting of the Society. All rank equally with regard to the Society’s residual assets.

(b) Membership of the Society is open to all employees in the Singapore Civil Defence Force (“SCDF”) and its affiliated organisations. There are two board categories of membership:-

(i) Ordinary Membership applicable for full time employed staff (i.e uniformed officers and

civilian staff);

(ii) Associate Membership applicable for its affiliated organisations specified in the By-Laws. (c) In accordance with Section 4.11 of the Society’s By-Laws, every member shall, unless

otherwise disqualified under the Act or the By-Laws, have right to: (i) exercise one vote irrespective of the number of shares held by him; (ii) avail himself of all services of the Society; (iii) stand for election to office; (iv) be co-opted to hold office in the Society; (v) participate at a general meeting; and (vi) enjoy all other rights provided under the By-Laws.

Capital management:

The objectives when managing capital are: to safeguard the reporting entity’s ability to continue as a going concern, so that it can continue to provide returns for owners and benefits for other stakeholders, and to provide an adequate return to owners by pricing the sales commensurately with the level of risk. The management sets the amount of capital to meet its requirements and the risk taken. There were no changes in the approach to capital management during the reporting year. The management manages the capital structure and makes adjustments to it where necessary or possible in the light of changes in conditions and the risk characteristics of the underlying assets. In order to maintain or adjust the capital structure, the management may adjust the amounts of dividends paid to owners, return capital to owners, issue new shares, or sell assets to reduce debt. Adjusted capital comprises all components of equity (that is, share capital and reserves).

There are no significant external borrowings. The debt-to-adjusted capital ratio does not provide a meaningful indicator of the risk of borrowings.


47

19. Other financial liability

Group Society

2020

$ 2019

$ 2020

$ 2019

$

Non-current: Financial instrument with fixed interest rate:

Lease liability 842,347 – – –

Sub-total 842,347 – – –

Current: Financial instrument with fixed interest rate:

Lease liability 25,737 – – –

Sub-total 25,737 – – –

Total non-current and current 868,084

The non-current portion is

repayable as follows:

Due within 2 to 5 years 117,552 – – –

Due after 5 years 724,795 – – –

Total non-current portion 842,347 – – –

A reconciliation of liability arising from financing as follows:

Group 1 April 2019

Addition

Cash

flows

Non-cash changes

31 March 2020

Accretion of

interests Other

$ $ $ $ $ $

Liability

Lease liability

- current 892,507 – (70,698) 46,275 (842,347) 25,737

- non-current – – – – 842,347 842,347

892,507 – (70,698) 46,275 – 868,084

The group has lease contract for land. The group’s obligation under the lease is secured by the

lessor’s title to the leased asset. The group is restricted from assigning and subleasing the leased

asset.

(i) Carrying amounts of right-of-use assets classified within property, plant and equipment

Group Society

Leasehold

land Leasehold

land

$ $

At 1 April 2019 892,507 –

Depreciation (43,020) –

At 31 March 2020 849,487 –


48

19. Other financial liability (cont’d)

(ii) Amounts recognised in profit or loss

Group Society

2020 2020

$ $

Depreciation of right-of-use assets 43,020 –

Interest on lease liability 46,275 –

Total amount recognised in profit or loss 89,295 –

20. Trade and other payables

Group Society

2020

$ 2019

$ 2020

$ 2019

$

Trade payables: Outside parties 231,324 224,710 4,173 4,173

Trade payables – subtotal 231,324 224,710 4,173 4,173

Other payables: Outside parties 48,101 95,121 – – Accruals 646,039 619,064 7,520 22,725 Provision for unutilised annual leave 290,000 181,000 – 16,000 GST payable 266,686 193,984 4,589 35,722

Dividend unclaimed 91,926 80,858 91,926 80,858

Contract liabilities (Note 20A) 1,853,265 528,184 – –

Other payables – subtotal 3,196,017 1,698,211 104,035 155,305

Total trade and other payables 3,427,341 1,922,921 108,208 159,478

20A. Contract liabilities

Group Society

2020

$ 2019

$ 2020

$ 2019

$

The amount is made up of: Contract liabilities on long term contracts (over time method) 1,853,265 528,184 – –

The movements in contract liabilities are as follows:

At beginning of the year 528,184 – – – Performance obligation satisfied – revenue recognised (528,184) – – – Consideration received or receivable 1,853,265 528,184 – –

At end of the year 1,853,265 528,184 – –

Contract liabilities comprise of safety services and sales of goods consideration received in advance from customers.


49

20. Trade and other payables (cont’d) 20A. Contract liabilities (cont’d)

Contract liabilities are recognised as revenue as (or when) the group satisfy the performance obligations under its contracts.

21. Central Co-operative Fund

Group Society

2020

$ 2019

$ 2020

$ 2019

$

Central Co-operative Fund 10,594 20,631 10,594 20,631

Pursuant to Section 71(2) of the Co-operative Societies Act, Chapter 62, the Society is required to contribute:-

(a) 5% of the first $500,000 of the surplus from its operations during the preceding financial year; and

(b) 20% of any surplus in excess of $500,000 from its operations during the preceding financial year to the Central Co-operative Fund.

The fund shall be administered as a trust fund as prescribed by the Co-operative Societies Act Chapter 62.

22. Dividends on equity shares Group & Society Rate per share - cents 2020

$ 2019

$ 2020

$ 2019

$ Final dividend paid 0.10 0.10 34,362 34,292

23. Financial instruments: information on financial risks

23A. Categories of financial assets and liabilities

The following table categories the carrying amounts of financial assets and liabilities recorded at the end of the reporting year:

Group Society

2020

$ 2019

$ 2020

$ 2019

$ Financial assets: Financial assets at amortised cost 19,394,746 17,632,993 4,745,534 4,637,172 Financial assets that is an equity investment at fair value through other comprehensive income (FVTOCI) 144,928 144,928 – –

At end of the year 19,539,674 17,777,921 4,745,534 4,637,172


50

23. Financial instruments: information on financial risks (cont’d)

23A. Categories of financial assets and liabilities (cont’d)

Group Society

2020

$ 2019

$ 2020

$ 2019

$ Financial liabilities: Financial liabilities at amortised cost 2,502,754 1,415,368 118,802 180,109

At end of the year 2,502,754 1,415,368 118,802 180,109

Further quantitative disclosures are included throughout these financial statements.

23B. Financial risk management

The main purpose for holding or issuing financial instruments is to raise and manage the finances for the entity’s operating, investing and financing activities. There are exposures to the financial risks on the financial instruments such as credit risk, liquidity risk and market risk comprising interest rate, currency risk and price risk exposures. Management has certain practices for the management of financial risks. However, these are not documented in formal written documents. The following guidelines are followed: All financial risk management activities are carried out and monitored by senior management staff. All financial risk management activities are carried out following acceptable market practices.

There have been no changes to the exposures to risk; the objectives, policies and processes for managing the risk and the methods used to measure the risk.

23C. Fair values of financial instruments

The analyses of financial instruments that are measured subsequent to initial recognition at fair value, grouped into Levels 1 to 3 are disclosed in the relevant notes to the financial statements. These include both the significant financial instruments stated at amortised cost and at fair value in the statement of financial position. The carrying values of current financial instruments approximate their fair values due to the short-term maturity of these instruments and the disclosures of fair value are not made when the carrying amount of current financial instruments is a reasonable approximation of the fair value.

23D. Credit risk on financial assets

Financial assets that are potentially subject to concentrations of credit risk and failures by

counterparties to discharge their obligations in full or in a timely manner. These arise principally

from cash balances with banks, cash equivalents, receivables and other financial assets. The

maximum exposure to credit risk is the total of the fair value of the financial assets at the end of

the reporting year. Credit risk on cash balances with banks and any other financial instruments is

limited because the counter-parties are entities with acceptable credit ratings. For expected credit

losses (ECL) on financial assets, the three-stage approach in the financial reporting standard on

financial instruments is used to measure the impairment allowance. Under this approach the

financial assets move through the three stages as their credit quality changes. However, a

simplified approach is permitted by the financial reporting standards on financial instruments for

financial assets that do not have a significant financing component, such as trade receivables. On

initial recognition, a day-1 loss is recorded equal to the 12 month ECL (or lifetime ECL for trade

receivables), unless the assets are considered credit impaired. For credit risk on trade receivables

an ongoing credit evaluation is performed on the financial condition of the debtors and an

impairment loss is recognised in profit or loss. Reviews and assessments of credit exposures in

excess of designated limits are made. Renewals and reviews of credits limits are subject to the

same review process.


51

23. Financial instruments: information on financial risks (cont’d) 23D. Credit risk on financial assets (cont’d)

Note 17 discloses the maturity of the cash and cash equivalents balances. Cash and cash

equivalents are also subject to the impairment requirements of the standard on financial

instruments. There was no identified impairment loss.

23E. Liquidity risk – financial liabilities maturity analysis

The liquidity risk refers to the difficulty in meeting obligations associated with financial liabilities that

are settled by delivering cash or another financial asset. It is expected that all the liabilities will be

paid at their contractual maturity. The average credit period taken to settle trade payables is about

30 to 60 days (2019: 30 to 60 days). The other payables are with short-term durations. The

classification of the financial assets is shown in the statement of financial position as they may be

available to meet liquidity needs and no further analysis is deemed necessary.

The following table analyses the non-derivative financial liabilities by remaining contractual maturity

(contractual and undiscounted cash flows):

Non-derivative financial liabilities:

Less than

1 year

2 – 5

years

After 5

years Total

$ $ $ $

Group

2020:

Central Co-operative Fund 10,594 – – 10,594

Lease liability 25,737 117,552 724,795 868,084

Trade and other payables 3,477,341 – – 3,477,341

At end of the year 3,513,672 117,552 724,795 4,356,019

2019:


Trade and other payables 1,922,921 – – 1,922,921

At end of the year 1,943,552 – – 1,943,552


Less than

1 year

2 – 5

years

After 5

years Total

$ $ $ $

Society

2020:


Trade and other payables 108,208 – – 108,208

At end of the year 118,802 – – 118,802

2019:


Trade and other payables 159,478 – – 159,478

At end of the year 180,109 – – 180,109

The undiscounted amounts on the borrowings with fixed interest rates are determined by reference to the conditions existing at the reporting date.


52

23. Financial instruments: information on financial risks (cont’d)

23F. Interest rate risk The interest rate risk exposure is mainly from changes in fixed interest rates and floating interest rates and it mainly concerns financial liabilities. The interest from financial assets including cash balances is not significant. The following table analyses the breakdown of the significant financial instruments by type of interest rate:

Group Society

2020

$ 2019

$ 2020

$ 2019

$ Financial assets with interest: Fixed rates 6,106,358 5,033,456 2,055,779 2,020,706

Financial liabilities with interest: Fixed rates 868,084 – – –

Sensitivity analysis: The effect on pre-tax profit is not significant.

23G. Foreign currency risk

The society is not exposed to foreign currency risk.

24. Operating lease commitments – as lessee At the end of the reporting year, the total of future minimum lease payments commitment under non-cancellable operating leases are as follows: Group 2019 $

Not later than one year 70,698

Rental expense for the year 70,698

Operating lease commitment is for land used for the society’s operations. The lease rental terms are negotiated for 2 years and rentals are not subject to an escalation clause. The lease is revised at each renewal date to reflect market rentals. As disclosed in Note 2A, the association has adopted FRS 116 on 1 January 2019. These lease payments have been recognised as right-of-use assets and lease liabilities on the statement of financial position as at 31 March 2020, except for short-term and low-value leases.

25. Changes and adoption of financial reporting standards

The accounting policies adopted are consistent with those of the previous financial year except that in the current financial year, the Society has adopted all the new and amended standards which are relevant to the Society and are effective for annual financial periods beginning on or after 1 January 2019. Except for the adoption of FRS 116 Leases described below, the adoption of these standards did not have any material effect on the financial performance or position of the Society.


53

25. Changes and adoption of financial reporting standards (cont’d) FRS 116 Leases FRS 116 supersedes FRS 17 Leases, INT FRS 104 Determining whether an Arrangement contains a Lease, INT FRS 15 Operating Leases-Incentives and INT FRS 27 Evaluating the Substance of Transactions Involving the Legal Form of a Lease. The standard sets out the principles for the recognition, measurement, presentation and disclosure of leases and requires lessees to recognise most leases on the statement of financial position.

The Society adopted FRS 116 using the modified retrospective method of adoption with the date

of initial application of 1 April 2019. Under this method, the standard is applied retrospectively with

the cumulative effect of initially applying the standard recognised at the date of initial application

as an adjustment to the opening balance of retained earnings. The Society elected to use the

transition practical expedient to not reassess whether a contract is, or contains a lease at 1 April

2019. Instead, the Society applied the standard only to contracts that were previously identified as

leases applying FRS 17 and INT FRS 104 at the date of initial application.

The effect of adopting FRS 116 as at 1 April 2019 was as follows:

Group

Increase

$

Plant and equipment 892,507

Other financial liabilities 892,507

The Society has lease contracts for factory premises. Before the adoption of FRS 116, the Society

classified each of its leases (as lessee) at the inception date as either a finance lease or an

operating lease. The accounting policy prior to 1 January 2019 is disclosed in Note 2A.

Upon adoption of FRS 116, the Society applied a single recognition and measurement approach

for all leases except for short-term leases and leases of low-value assets. The accounting policy

beginning on and after 1 January 2019 is disclosed in Note 2A. The standard provides specific

transition requirement and practical expedients, which have been applied by the Society.

Leases previously accounted for as operating leases

The Society recognised right-of-use assets and lease liabilities for those leases previously

classified as operating leases, except for short-term leases and leases of low-value assets. The

right-of-use assets for the leases were recognised based on the carrying amount as if the standard

had always been applied, using the incremental borrowing rate at the date of initial application.

Lease liabilities were recognised based on the present value of the remaining lease payments,

discounted using the incremental borrowing rate at the date of initial application.

The Society also applied the available practical expedients wherein it:

Used discount rates 5.25% to a portfolio of leases with reasonably similar characteristics;

relied on its assessment of whether leases are onerous immediately before the date of initial application as an alternative to performing an impairment review;

applied the short-term leases exemption to leases with lease term that ends within 12 months of the date of initial application;


54

25. Changes and adoption of financial reporting standards (cont’d)

Leases previously accounted for as operating leases (cont’d)

excluded the initial direct costs from the measurement of the right-of-use asset at the date of initial application; and

used hindsight in determining the lease term where the contract contained options to extend or terminate the lease.

The lease liabilities as at 1 April 2019 can be reconciled to the operating lease commitments as of 31 March 2019, as follow:

Group $

Operating lease commitments as at 31 March 2019 1,466,980 Weighted average incremental borrowing rate as at 1 April 2019 5.25% Lease liabilities as at 1 April 2019 892,507

26. Standards in issue but not yet effective

The Society has not adopted the following standards applicable to the Society that have been issued but not yet effective:

Description

Effective date for periods beginning on

or after Amendments to References to the Conceptual Framework in FRS Standards

1 January 2020

Amendments to FRS 1 and FRS 8 Definition of Material 1 January 2020

The directors expect that the adoption of the standards above will have no material impact on the financial statements in the year of initial application.

27. Comparative figure

The financial statements for the reporting year ended 31 March 2019 were audited by other independent auditor (other than Pinnally PAC) whose report dated 2 September 2019 expressed an unqualified opinion on those financial statements.


55

CO-OPERATIVE OF SCDF EMPLOYEES LIMITED

(Registration No: T05CS0239G)

The Accompanying Supplementary Statement of Profit or Loss

and Other Comprehensive Income

Has Been Prepared For Management Purposes Only

And Does Not Form Part Of The Audited Financial Statements


56

Supplementary Statement of Profit or Loss and Other Comprehensive Income


2020 2019 $ $

Revenue 497,934 854,868

Other gains 45,652 437,055

Purchase of inventories (162,557) (324,012)

Employee benefits expenses (143,295) (498,542)

Other expenses (25,845) (49,947)

Other losses – (6,803)

Profit before tax and contributions 211,889 412,619

Not Part Of Audited Financial Statements


57

Supplementary Statement of Profit or Loss and Other Comprehensive Income 1.

Year Ended 31 March 2020 2.

3.

4.

Revenue 2020 2019 5.

$ $ 6.

7.

Rendering of services 310,338 430,909 8.

Sale of goods 187,596 423,959 9.

497,934, 854,868 10.

11.

12.

Other gains 2020 2019 1.

$ $ 2.

3.

Dividend income – 400,000 4.

Interest income from fixed deposits 35,308 25,837 1.

Government grants 5,170 10,379 1.

Gain on foreign exchange 5,174 – 2.

Others – 839 3.

45,652 437,055 4.

5.

6.

Employee benefits expense 2020 2019 7.

$ $ 8.

9.

Wages, salaries and bonuses 125,597 449,842 10.

Post-employment benefits 17,432 48,245 11.

Other benefits 266 455 12.

Total employee benefits expense 143,295 498,542 13.

14.

15.

Other losses 2020 2019 16.

$ $ 17.

Loss on foreign exchange – 6,803



58


Year Ended 31 March 2020 2. 3.

Other expenses 2020 2019 4.

$ $ 5.

6.

Accounting fee – 3,100 7.

Audit fee 6,900 4,100 8.

Bank charges 760 1,534 9.

Cost of services 319 5,100 1.

Entertainment – 1,962 1.

Insurance 7,000 12,033 1.

Legal and professional fee – 2,500 1.

Office supplies 100 100 1.

Members welfare 5,263 5,700 2.

Postage, printing and stationery 2,637 3,626 1.

Promotion 847 5,488 2.

Skill development levy 434 917 1.

Service charge – 3,380 2.

Telecommunication 65 65 1.

Training 1,520 200 1.

Travel and transport – 142 1.

25,845 49,947 1.

2.


59

COSEM SAFETY & SECURITY SERVICES PTE. LTD. (Registration No: 200613733Z)

Statement by Directors and Financial Statements


COSEM SAFETY AND SECURITY SERVICES PTE. LTD. (Registration No: 200613733Z)

60

Statement by Directors The directors are pleased to present their statement together with the audited financial statements of the company for the reporting year ended 31 March 2020. 1. Opinion of the directors

In the opinion of the directors, (a) the accompanying financial statements are drawn up so as to give a true and fair view

of the financial position and performance of the company for the reporting year covered by the financial statements; and

(b) at the date of the statement there are reasonable grounds to believe that the

company will be able to pay its debts as and when they fall due. The board of directors approved and authorised these financial statements for issue. 2. Directors

The directors of the company in office at the date of this statement are:

Ng Chee Kiang Lee Bee Hong

3. Directors' interests in shares and debentures

The directors of the company holding office at the end of the financial year had no interest in the share capital and debentures of the Company and related corporations as recorded in the register of directors’ shareholdings kept by the Company under Section 164 of the Singapore Companies Act.

4. Arrangements to enable directors to acquire benefits by means of the acquisition of

shares and debentures

Neither at the end of the reporting year nor at any time during the reporting year did there subsist arrangements to which the company is a party, being arrangements whose objects are, or one of whose objects is, to enable directors of the company to acquire benefits by means of the acquisition of shares or debentures in the company or any other body corporate.

5. Options

During the reporting year, no option to take up unissued shares of the company was granted.


61

During the reporting year, there were no shares of the company issued by virtue of the exercise of an option to take up unissued shares.

At the end of the reporting year, there were no unissued shares under option.

6. Independent auditor

Pinnally PAC has expressed willingness to accept re-appointment. The directors .................................................. .................................................. Ng Chee Kiang Lee Bee Hong Director Director

62

Independent Auditor’s Report to the Member of COSEM SAFETY & SECURITY SERVICES PTE. LTD. (Registration No: 200613733Z) Report on the audit of the financial statements Opinion We have audited the accompanying financial statements of COSEM Safety & Security Services Pte. Ltd. (the “company”), which comprise the statement of financial position as at 31 March 2020, and the statement of profit or loss and other comprehensive income, statement of changes in equity and statement of cash flows for the reporting year then ended, and notes to the financial statements, including the significant accounting policies. In our opinion, the accompanying financial statements are properly drawn up in accordance with the provisions of the Companies Act, Chapter 50 (the Act) and the Financial Reporting Standards in Singapore (FRSs) so as to give a true and fair view of the financial position of the company as at 31 March 2020 and of the financial performance, changes in equity and cash flows of the company for the year ended on that date. Basis for opinion We conducted our audit in accordance with Singapore Standards on Auditing (SSAs). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the company in accordance with the Accounting and Corporate Regulatory Authority (ACRA) Code of Professional Conduct and Ethics for Public Accountants and Accounting Entities (ACRA Code) together with the ethical requirements that are relevant to our audit of the financial statements in Singapore, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ACRA Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Other matters The financial statements for the reporting year ended 31 March 2020 were audited by other independent auditor whose report dated 2 September 2019 expressed an unqualified opinion on those statements. Other information Management is responsible for the other information. The other information comprises the statement by directors but does not include the financial statements and our auditor’s report thereon. Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon. In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

63

Independent Auditor’s Report to the Member of COSEM SAFETY & SECURITY SERVICES PTE. LTD. (Registration No: 200613733Z) – 2 – Responsibilities of management and directors for the financial statements Management is responsible for the preparation of financial statements that give a true and fair view in accordance with the provisions of the Act and FRSs, and for devising and maintaining a system of internal accounting controls sufficient to provide a reasonable assurance that assets are safeguarded against loss from unauthorised use or disposition; and transactions are properly authorised and that they are recorded as necessary to permit the preparation of true and fair financial statements and to maintain accountability of assets. In preparing the financial statements, management is responsible for assessing the company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the company or to cease operations, or has no realistic alternative but to do so. The directors’ responsibilities include overseeing the company’s financial reporting process. Auditor’s responsibilities for the audit of the financial statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SSAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. As part of an audit in accordance with SSAs, we exercise professional judgement and maintain professional scepticism throughout the audit. We also: a) Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

b) Obtain an understanding of internal control relevant to the audit in order to design audit

procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company’s internal control.

c) Evaluate the appropriateness of accounting policies used and the reasonableness of accounting

estimates and related disclosures made by management.

64

Independent Auditor’s Report to the Member of COSEM SAFETY & SECURITY SERVICES PTE. LTD. (Registration No: 200613733Z) – 3 – Auditor’s responsibilities for the audit of the financial statements (cont’d) d) Conclude on the appropriateness of management’s use of the going concern basis of accounting

and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our Independent Auditor’s Report to the Member of up to the date of our auditor’s report. However, future events or conditions may cause the company to cease to continue as a going concern.

e) Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

We communicate with the directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. Report on other legal and regulatory requirements In our opinion, the accounting and other records required by the Act to be kept by the company have been properly kept in accordance with the provisions of the Act. Pinnally PAC Public Accountants and Chartered Accountants Singapore


65

Statement of Profit or Loss and Other Comprehensive Income


Note 2020 2019 $ $

Revenue 4 17,399,660 14,652,855

Other gains 5 239,303 239,454

Purchase of inventories (1,571,047) (454,992)

Changes in inventories (13,066) (78,751)

Employee benefits expenses 6 (11,454,480) (10,796,320)

Depreciation expenses 10 (297,587) (295,964)

Finance costs 7 (46,275) -

Other expenses 8 (3,038,568) (2,884,997)

Other losses 5 (30,751) (22,223)

Share of profit of joint venture 11 1,899,794 1,864,500

Profit before tax from continuing operations 3,086,983 2,223,562

Income tax expense 9 (575,756) (469,225)

Profit from continuing operations for the year 2,511,227 1,754,337



66

Statement of Financial Position 1. 2.

As at 31 March 2020

Note 2020 3. 2019

$ 4. $

ASSETS 5. 6.

Non-current assets 7. 8.

Property, plant and equipment 10 4,826,187 9. 4,140,187

Investment in joint venture 11 2,668,000 10. 2,668,000

Investment in subsidiary 12 50,000 11. -

Other financial assets 13 144,928 12. 144,928

Total non-current assets 7,689,115 13. 6,953,115

14.

Current assets 15.

Inventories 14 94,173 16. 107,239

Trade and other receivables 15 4,191,673 17. 3,883,855

Other assets 16 4,336,343 18. 1,614,068

Cash and cash equivalents 17 10,420,740 19. 9,111,966

Total current assets 19,042,929 20. 14,717,128

Total assets 26,732,044 21. 21,670,243

22.

EQUITY AND LIABILITIES 23.

Equity 24.

Share capital 18 50,000 25. 50,000

Retained earnings 21,932,159 26. 19,420,932

Total equity 21,982,159 27. 19,470,932

28.

Non-current liabilities 29.

Other financial liability 19 842,347 30. -

Deferred tax liabilities 9 23,460 31. 23,460

Total non-current liabilities 865,807 32. 23,460

33.

Current liabilities 34.

Trade and other payables 20 3,319,133 35. 1,763,443

Other financial liability 19 25,737 36. -

Income tax payable 539,208 37. 412,408

Total current liabilities 3,884,078 38. 2,175,851

Total liabilities 4,749,885 39. 2,199,311

Total equity and liabilities 26,732,044 40. 21,670,243

41.



67

Statement of Changes in Equity



equity capital earnings

$ $ $

Current year:



Total comprehensive income for the year 2,511,227 - 2,511,227


Previous year:



Total comprehensive income for the year 1,754,337 - 1,754,337

Dividend declared and paid (Note 21) (400,000) - (400,000)




68

Statement of Cash Flows (1)

Year Ended 31 March 2020 (2)

(3)

2020 2019 (4)

$ $ (5)

Cash flows from operating activities (6)

Profit before tax 3,086,983 2,223,562 (7)

Adjustments for: (8)

Allowance for impairment of trade receivables - 47,629 (9)

Bad debts written off - trade receivables 20,120 - (10)

Depreciation of property, plant and equipment 297,587 295,964 (11)

Interest income (46,414) (32,886) (12)

Interest expense 46,275 - (13)

Share of profit of joint venture (1,899,794) (1,864,500) (1)

Operating cash flows before changes in working capital 1,504,757 669,769 (2)

Inventories 13,066 78,751 (3)

Trade and other receivables (327,938) (68,732) (4)

Other assets (2,722,275) 75,092 (5)

Trade and other payables 1,555,690 (527,208) (6)

Net cash flows from operations 23,300 227,672 (7)

Income tax paid (448,956) (686,833) (8)

Net cash flows used in operating activities (425,656) (459,161) (9)

(10)

Cash flows from investing activities (11)

Placement of fixed deposits (1,037,829) (1,512,750) (12)

Purchase of plant and equipment (91,080) (84,448) (13)

Interest income 46,414 32,886 (14)

Proceeds received from a joint venture 1,899,794 1,864,500 (15)

Acquisition of subsidiary (50,000) - (16)

Net cash flow from investing activities 767,299 300,188 (17)

(18)

Cash flows from financing activities (19)

Repayments of principal portion of lease liability (24,423) - (20)

Interest paid (46,275) - (21)

Dividends paid to equity owners - (400,000) (22)

Net cash flow used in financing activities (70,698) (400,000) (23)

(24)

Net decrease in cash and cash equivalents 270,945 (558,973) (25)

Cash and cash equivalents, beginning balance 6,099,216 6,658,189 (26)

Cash and cash equivalents, ending balance (Note 17A) 6,370,161 6,099,216 (27)



69

Notes to the Financial Statements 31 March 2020 1. General

The Company is incorporated in Singapore with limited liability. The financial statements are presented in Singapore dollars.

The board of directors approved and authorised these financial statements for issue on the date of the statement by directors.

The principal activities of the company are that of provision of training services, deal in fire safety products and provision of consultation related to safety and related services.

The principal activities of the joint venture is disclosed in Note 11 to the financial statements.

The principal activities of the subsidiary is disclosed in Note 12 to the financial statements.

The registered office is 37 Gul Avenue, Singapore 629677.

Statement of compliance with financial reporting standards

These financial statements have been prepared in accordance with the Singapore Financial Reporting Standards (“SFRSs”) and the related interpretations to SFRS (“INT SFRS”) as issued by the Singapore Accounting Standards Council. They are in compliance with the provisions of the Companies Act, Chapter 50.

Accounting convention The financial statements are prepared on a going concern basis under the historical cost convention except where a financial reporting standard requires an alternative treatment (such as fair values) as disclosed where appropriate in these financial statements. The accounting policies in the financial reporting standards may not be applied when the effect of applying them is not material. The disclosures required by financial reporting standards may not be provided if the information resulting from that disclosure is not material.

Basis of preparation of financial statements The preparation of financial statements in conformity with generally accepted accounting principles requires the management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting year. Actual results could differ from those estimates. The estimates and assumptions are reviewed on an ongoing basis. Apart from those involving estimations, management has made judgements in the process of applying the entity’s accounting policies. The areas requiring management’s most difficult, subjective or complex judgements, or areas where assumptions and estimates are significant to the financial statements, are disclosed at the end of this footnote, where applicable. Basis of presentation Consolidated financial statements have not been presented as the reporting entity is a wholly owned subsidiary. The address of the ultimate and immediate holding company presenting the group financial statements is: Co-operative of SCDF Employees Limited, 37 Gul Avenue, Singapore 629677.


70

2. Significant accounting policies and other explanatory information

2A. Significant accounting policies Revenue recognition The financial reporting standard on revenue from contracts with customers establishes a five-step model to account for revenue arising from contracts with customers. Revenue is recognised at an amount that reflects the consideration to which the entity expects to be entitled in exchange for transferring goods or services to a customer (which excludes estimates of variable consideration that are subject to constraints, such as right of return exists, trade discounts, volume rebates and changes to the transaction price arising from modifications), net of any related sales taxes and excluding any amounts collected on behalf of third parties. An asset (goods or services) is transferred when or as the customer obtains control of that asset. As a practical expedient the effects of any significant financing component is not adjusted if the payment for the good or service will be within one year.

Sale of goods. Revenue is recognised at a point in time when the performance obligation is satisfied by transferring a promised good or service to the customer. Control of the goods is transferred to the customer, generally on delivery of the goods (in this respect, incoterms are considered). Distinct goods or services in a series - For distinct goods or services in a series such as routine or recurring service contracts where the promise under the contract is for a specified quantity of goods or services that meets the over time criteria or is a stand-ready or single continuous service and if the nature of each good or service is distinct, substantially the same and has the same pattern of transfer or each time increment is distinct, then revenue is recognised at the amount that the entity has the right to bill a fixed amount for each unit of goods or service provided.

Interest income

Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable.

Government grants

Government grants are recognised at fair value when there is reasonable assurance that the conditions attaching to them will be complied with and that the grants will be received. Grants in recognition of specific expenses are recognised in profit or loss on a systematic basis over the periods necessary to match them with the related costs that they are intended to compensate. The grant related to assets is presented in the statement of financial position by recognising the grant as deferred income that is recognised in profit or loss on a systematic basis over the useful life of the asset and in the proportions in which depreciation expense on those assets is recognised.

Borrowing costs Borrowing costs are interest and other costs incurred in connection with the borrowings. Interest expense is calculated using the effective interest rate method. Borrowing costs are recognised as an expense in the period in which they are incurred except that borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset that necessarily take a substantial period of time to get ready for their intended use or sale are capitalised as part of the cost of that asset until substantially all the activities necessary to prepare the qualifying asset for its intended use or sale are complete.


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2. Significant accounting policies and other explanatory information (cont’d) 2A. Significant accounting policies (cont’d)

Employee benefits

Contributions to a defined contribution retirement benefit plan are recorded as an expense as they fall due. The entity's legal or constructive obligation is limited to the amount that it agrees to contribute to an independently administered fund (such as the Central Provident Fund in Singapore, a government managed defined contribution retirement benefit plan). For employee leave entitlement the expected cost of short-term employee benefits in the form of compensated absences is recognised in the case of accumulating compensated absences, when the employees render service that increases their entitlement to future compensated absences; and in the case of non-accumulating compensated absences, when the absences occur. A liability for bonuses is recognised where the entity is contractually obliged or where there is constructive obligation based on past practice.

Income tax The income taxes are accounted using the asset and liability method that requires the recognition of taxes payable or refundable for the current year and deferred tax liabilities and assets for the future tax consequence of events that have been recognised in the financial statements or tax returns. The measurements of current and deferred tax liabilities and assets are based on provisions of the enacted or substantially enacted tax laws; the effects of future changes in tax laws or rates are not anticipated. Tax expense (tax income) is the aggregate amount included in the determination of profit or loss for the reporting year in respect of current tax and deferred tax. Current and deferred income taxes are recognised as income or as an expense in profit or loss unless the tax relates to items that are recognised in the same or a different period outside profit or loss. For such items recognised outside profit or loss the current tax and deferred tax are recognised (a) in other comprehensive income if the tax is related to an item recognised in other comprehensive income and (b) directly in equity if the tax is related to an item recognised directly in equity. Deferred tax assets and liabilities are offset when they relate to income taxes levied by the same income tax authority. The carrying amount of deferred tax assets is reviewed at each end of the reporting year and is reduced, if necessary, by the amount of any tax benefits that, based on available evidence, are not expected to be realised. A deferred tax amount is recognised for all temporary differences, unless the deferred tax amount arises from the initial recognition of an asset or liability in a transaction which (i) is not a business combination; and (ii) at the time of the transaction, affects neither accounting profit nor taxable profit (tax loss).

Foreign currency transactions

The functional currency is the Singapore dollar as it reflects the primary economic environment in which the entity operates. Transactions in foreign currencies are recorded in the functional currency at the rates ruling at the dates of the transactions. At each end of the reporting year, recorded monetary balances and balances measured at fair value that are denominated in non-functional currencies are reported at the rates ruling at the end of the reporting year and fair value measurement dates respectively. All realised and unrealised exchange adjustment gains and losses are dealt with in profit or loss except when recognised in other comprehensive income and if applicable deferred in equity such as for qualifying cash flow hedges. The presentation is in the functional currency.


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Joint arrangement – joint venture A joint arrangement (that is, either a joint operation or a joint venture, depending on the rights and obligations of the jointly controlling parties to the arrangement), is one in which the reporting entity is party to an arrangement of which two or more parties have joint control, which is the contractually agreed sharing of control of the arrangement; it exists only when decisions about the relevant activities (that is, activities that significantly affect the returns of the arrangement) require the unanimous consent of the parties sharing control. In a joint venture, the parties with joint control have rights to the net assets of the arrangement. The reporting interests in joint ventures are recognised using the equity method in accordance with the financial reporting standard on investments in joint ventures. Under the equity method the investment is initially recognised at cost and adjusted thereafter for the post-acquisition change in the investor’s share of the investee’s net assets. The carrying value and the net book value of the investment in the joint venture are not necessarily indicative of the amounts that would be realised in a current market exchange. The investor’s profit or loss includes its share of the investee’s profit or loss and the investor’s other comprehensive income includes its share of the investee’s other comprehensive income. Losses of a joint venture in excess of the reporting entity’s interest in the relevant joint venture are not recognised except to the extent that the reporting entity has an obligation. Profits and losses resulting from transactions between the reporting entity and a joint venture are recognised in the financial statements only to the extent of unrelated reporting entity’s interests in the joint venture. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Accounting policies of joint venture are changed where necessary to ensure consistency with the policies adopted by the reporting entity. The reporting entity discontinues the use of the equity method from the date that when its investment ceases to be a joint venture and accounts for the investment in accordance with the financial reporting standard on financial instruments from that date. Any gain or loss is recognised in profit or loss. Any investment retained in the former joint venture is measured at fair value at the date that it ceases to be a joint venture. In the company’s separate financial statements, an investment in a joint venture is accounted for at cost less any allowance for impairment in value. Impairment loss recognised in profit or loss for a joint venture is reversed only if there has been a change in the estimates used to determine the asset’s recoverable amount since the last impairment loss was recognised. The carrying value and the net book value of an investment in the joint venture are not necessarily indicative of the amounts that would be realised in a current market exchange. Property, plant and equipment Property, plant and equipment are carried at cost on initial recognition and after initial recognition at cost less any accumulated depreciation and any accumulated impairment losses. Depreciation is provided on a straight-line basis to allocate the gross carrying amounts of the assets less their residual values over their estimated useful lives of each part of an item of these assets as follows:

Leasehold land and property 21 - 60 years Plant and equipment 5 years Renovation 3 years Computer equipment 3 years


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2A. Significant accounting policies (cont’d) Property, plant and equipment (cont’d) An asset is depreciated when it is available for use until it is derecognised even if during that period the item is idle. Fully depreciated assets still in use are retained in the financial statements. The gain or loss arising from the derecognition of an item of plant and equipment is measured as the difference between the net disposal proceeds, if any, and the carrying amount of the item and is recognised in profit or loss. The residual value and the useful life of an asset is reviewed at least at each end of the reporting year and, if expectations differ significantly from previous estimates, the changes are accounted for as a change in an accounting estimate, and the depreciation charge for the current and future periods are adjusted. Cost also includes acquisition cost, borrowing cost capitalised and any cost directly attributable to bringing the asset or component to the location and condition necessary for it to be capable of operating in the manner intended by management. Subsequent costs are recognised as an asset only when it is probable that future economic benefits associated with the item will flow to the entity and the cost of the item can be measured reliably. All other repairs and maintenance are charged to profit or loss when they are incurred. Leases These accounting policies are applied on and after the initial application date of FRS 116, 1 January 2019: The Company assesses at contract inception whether a contract is, or contains, a lease. That is, if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. (a) As lessee

The Company applies a single recognition and measurement approach for all leases, except for short-term leases and leases of low-value assets. The Company recognises lease liabilities representing the obligations to make lease payments and right-of-use assets representing the right to use the underlying leased assets. Right-of-use assets The Company recognises right-of-use assets at the commencement date of the lease (i.e. the date the underlying asset is available for use). Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any remeasurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognised, initial direct costs incurred, and lease payments made at or before the commencement date less any lease incentives received. Right-of-use assets are depreciated on a straight-line basis over the shorter of the lease term and the estimated useful lives of the assets. If ownership of the leased asset transfers to the Company at the end of the lease term or the cost reflects the exercise of a purchase option, depreciation is calculated using the estimated useful life of the asset. The right-of-use assets are also subject to impairment. The Company’s right-of-use assets are presented within the Note to property, plant and equipment.


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2A. Significant accounting policies (cont’d) Leases (cont’d) Lease liabilities At the commencement date of the lease, the Company recognises lease liabilities measured at the present value of lease payments to be made over the lease term. The lease payments include fixed payments (including in-substance fixed payments) less any lease incentives receivable, variable lease payments that depend on an index or a rate, and amounts expected to be paid under residual value guarantees. The lease payments also include the exercise price of a purchase option reasonably certain to be exercised by the Company and payments of penalties for terminating the lease, if the lease term reflects the Company exercising the option to terminate. Variable lease payments that do not depend on an index or a rate are recognised as expenses (unless they are incurred to produce inventories) in the period in which the event or condition that triggers the payment occurs. In calculating the present value of lease payments, the Company uses its incremental borrowing rate at the lease commencement date because the interest rate implicit in the lease is not readily determinable. After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made. In addition, the carrying amount of lease liabilities is remeasured if there is a modification, a change in the lease term, a change in the lease payments (e.g. changes to future payments resulting from a change in an index or rate used to determine such lease payments) or a change in the assessment of an option to purchase the underlying asset. The Company’s lease liabilities are included in Note to other financial liabilities. Short-term leases and leases of low-value assets The Company applies the short-term lease recognition exemption to its short-term leases of machinery (i.e. those leases that have a lease term of 12 months or less from the commencement date and do not contain a purchase option). It also applies the lease of low-value assets recognition exemption to leases of office equipment that are considered to be low value. Lease payments on short-term leases and leases of low value assets are recognised as expense on a straight-line basis over the lease term. These accounting policies are applied before the initial application date of FRS 116, 1 January 2019: As lessee Finance leases which transfer to the Company substantially all the risks and rewards incidental to ownership of the leased item, are capitalised at the inception of the lease at the fair value of the leased asset or, if lower, at the present value of the minimum lease payments. Any initial direct costs are also added to the amount capitalised. Lease payments are apportioned between the finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are charged to profit or loss. Contingent rents, if any, are charged as expenses in the periods in which they are incurred. Capitalised leased assets are depreciated over the shorter of the estimated useful life of the asset and the lease term, if there is no reasonable certainty that the Company will obtain ownership by the end of the lease term.


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Leases (cont’d) These accounting policies are applied before the initial application date of FRS 116, 1 January 2019: (cont’d) As lessee (cont’d) Operating lease payments are recognised as an expense in profit or loss on a straight-line basis over the lease term. The aggregate benefit of incentives provided by the lessor is recognised as a reduction of rental expense over the lease term on a straight-line basis. Inventories Inventories are measured at the lower of cost (weighted average method) and net realisable value. Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale. Cost includes all costs of purchase, costs of conversion and other costs incurred in bringing the inventories to their present location and condition. Impairment of non-financial assets Irrespective of whether there is any indication of impairment, an annual impairment test is performed at the same time every year on an intangible asset with an indefinite useful life or an intangible asset not yet available for use. The carrying amount of other non-financial assets is reviewed at each end of the reporting year for indications of impairment and where an asset is impaired, it is written down through profit or loss to its estimated recoverable amount. The impairment loss is the excess of the carrying amount over the recoverable amount and is recognised in profit or loss. The recoverable amount of an asset or a cash-generating unit is the higher of its fair value less costs of disposal and its value in use. When the fair value less costs of disposal method is used, any available recent market transactions are taken into consideration. When the value in use method is adopted, in assessing the value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash-generating units). At each end of the reporting year non-financial assets other than goodwill with impairment loss recognised in prior periods are assessed for possible reversal of the impairment. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been measured, net of depreciation or amortisation, if no impairment loss had been recognised.


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2A. Significant accounting policies (cont’d) Financial instruments Recognition and derecognition of financial instruments: A financial asset or a financial liability is recognised in the statement of financial position when, and only when, the entity becomes party to the contractual provisions of the instrument. All other financial instruments (including regular-way purchases and sales of financial assets) are recognised and derecognised, as applicable, using trade date accounting or settlement date accounting. A financial asset is derecognised when the contractual rights to the cash flows from the financial asset expire or it transfers the rights to receive the contractual cash flows in a transaction in which substantially all of the risks and rewards of ownership of the financial asset are transferred or in which the entity neither transfers nor retains substantially all of the risks and rewards of ownership and it does not retain control of the financial asset. A financial liability is removed from the statement of financial position when, and only when, it is extinguished, that is, when the obligation specified in the contract is discharged or cancelled or expires. At initial recognition the financial asset or financial liability is measured at its fair value plus or minus, in the case of a financial asset or financial liability not at fair value through profit or loss, transaction costs that are directly attributable to the acquisition or issue of the financial asset or financial liability. Classification and measurement of financial assets: 1. Financial asset classified as measured at amortised cost: A financial asset is measured

at amortised cost if it meets both of the following conditions and is not designated as at fair value through profit or loss (FVTPL), that is (a) the asset is held within a business model whose objective is to hold assets to collect contractual cash flows; and (b) the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. Typically trade and other receivables, bank and cash balances are classified in this category.

2. Financial asset that is a debt asset instrument classified as measured at fair value

through other comprehensive income (FVTOCI): There were no financial assets classified in this category at reporting year end date.

3. Financial asset that is an equity investment measured at fair value through other

comprehensive income (FVTOCI): On initial recognition of an equity investment that is not held for trading, an irrevocably election may be made to present subsequent changes in fair value in OCI. This election is made on an investment-by-investment basis. Fair value changes are recognised in OCI but dividends are recognised in profit or loss unless the dividend clearly represents a recovery of part of the cost of the investment. The gain or loss that is presented in OCI includes any related foreign exchange component arising on non-monetary investments (eg, equity instruments). On disposal, the cumulative fair value changes are not recycled to profit or loss but remain in reserves within equity. The weighted average or specific identification method is used when determining the cost basis of equities being disposed of.

4. Financial asset classified as measured at fair value through profit or loss (FVTPL):

There were no financial assets classified in this category at reporting year end date.


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Financial instruments (cont’d) Classification and measurement of financial liabilities:

Financial liabilities are classified as at fair value through profit or loss (FVTPL) in either of the following circumstances: (1) the liabilities are managed, evaluated and reported internally on a fair value basis; or (2) the designation eliminates or significantly reduces an accounting mismatch that would otherwise arise. All other financial liabilities are carried at amortised cost using the effective interest method. Reclassification of any financial liability is not permitted. Cash and cash equivalents Cash and cash equivalents in the statement of cash flows include bank and cash balances, on demand deposits and any highly liquid debt asset instruments purchased with an original maturity of three months or less. For the statement of cash flows the item includes cash and cash equivalents less cash subject to restriction and bank overdrafts payable on demand that form an integral part of cash management. Fair value measurement The fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When measuring the fair value of an asset or a liability, market observable data to the extent possible is used. If the fair value of an asset or a liability is not directly observable, an estimate is made using valuation techniques that maximise the use of relevant observable inputs and minimise the use of unobservable inputs (eg by use of the market comparable approach that reflects recent transaction prices for similar items, discounted cash flow analysis, or option pricing models refined to reflect the issuer’s specific circumstances). Inputs used are consistent with the characteristics of the asset / liability that market participants would take into account. The entity’s intention to hold an asset or to settle or otherwise fulfil a liability is not taken into account as relevant when measuring fair value. Fair values are categorised into different levels in a fair value hierarchy based on the degree to which the inputs to the measurement are observable and the significance of the inputs to the fair value measurement in its entirety: Level 1 fair value measurements are those derived from quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 fair value measurements are those derived from inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (ie as prices) or indirectly (ie derived from prices). Level 3 fair value measurements are those derived from valuation techniques that include inputs for the asset or liability that are not based on observable market data (unobservable inputs). Transfers between levels of the fair value hierarchy are recognised at the end of the reporting period during which the change occurred.

The carrying values of current financial instruments approximate their fair values due to the short-term maturity of these instruments and the disclosures of fair value are not made when the carrying amount of current financial instruments is a reasonable approximation of the fair value. The fair values of non-current financial instruments may not be disclosed separately unless there are significant differences at the end of the reporting year and in the event the fair values are disclosed in the relevant notes to the financial statements.


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2B. Other explanatory information

Provisions

A liability or provision is recognised when there is a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. A provision is made using best estimates of the amount required in settlement and where the effect of the time value of money is material, the amount recognised is the present value of the expenditures expected to be required to settle the obligation using a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the obligation. The increase in the provision due to passage of time is recognised as interest expense. Changes in estimates are reflected in profit or loss in the reporting year they occur. Classification of equity and liabilities A financial instrument is classified as a liability or as equity in accordance with the substance of the contractual arrangement on initial recognition. Equity instruments are contracts that give a residual interest in the net assets of the reporting entity. Where the financial instrument does not give rise to a contractual obligation on the part of the issuer to make payment in cash or kind under conditions that are potentially unfavourable, it is classified as an equity instrument. Ordinary shares are classified as equity. Equity instruments are recognised at the amounts of proceeds received net of incremental costs directly attributable to the transaction. Dividends on equity are recognised as liabilities when they are declared. Interim dividends are recognised when declared by the directors.

2C. Critical judgements, assumptions and estimation uncertainties The critical judgements made in the process of applying the accounting policies that have the most significant effect on the amounts recognised in the financial statements and the key assumptions concerning the future, and other key sources of estimation uncertainty at the end of the reporting year, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities currently or within the next reporting year are discussed below. These estimates and assumptions are periodically monitored to ensure they incorporate all relevant information available at the date when financial statements are prepared. However, this does not prevent actual figures differing from estimates. Net realisable value of inventories: A review is made on inventory for excess inventory and declines in net realisable value below cost and an allowance is recorded against the inventory balance for any such declines. The review requires management to consider the future demand for the products. In any case, the realisable value represents the best estimate of the recoverable amount and is based on the acceptable evidence available at the end of the reporting year and inherently involves estimates regarding the future expected realisable value. The usual considerations for determining the amount of allowance or write-down include ageing analysis, technical assessment and subsequent events. In general, such an evaluation process requires significant judgment and materially affects the carrying amounts of inventories at the end of the reporting year. Possible changes in these estimates could result in revisions to the stated value of the inventories. The carrying amount is disclosed in the Note on inventories.


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2C. Critical judgements, assumptions and estimation uncertainties (cont’d) Allowance for trade receivables: The trade receivables are subject to the expected credit loss model under the financial reporting standard on financial instruments. The expected lifetime losses are recognised from initial recognition of these assets. These assets are grouped based on shared credit risk characteristics and the days past due for measuring the expected credit losses. The allowance matrix is based on its historical observed default rates (over a period of certain months) over the expected life of the trade receivables and is adjusted for forward-looking estimates. At every reporting date the historical observed default rates are updated and changes in the forward-looking estimates are analysed. The loss allowance was determined accordingly. The carrying amounts might change materially within the next reporting year but these changes may not arise from assumptions or other sources of estimation uncertainty at the end of the reporting year. The carrying amount is disclosed in the Note on trade and other receivables. Revenue recognised over time: The entity has revenue where the performance obligation is satisfied over time. Revenue is recognised over time by measuring the progress toward complete satisfaction of that performance obligation. A single method is applied consistently for measuring progress for each performance obligation satisfied over time. Judgment is required when selecting a output method for measuring progress toward complete satisfaction of a performance obligation. Assessing the satisfaction of performance obligations over time requires judgment and the consideration of many criteria that should be met to qualify such as whether the customer presently is obligated to pay for an asset, whether the customer has legal title, whether the entity has transferred physical possession of the asset, whether the customer has assumed the significant risks and rewards of ownership of the asset, and whether the customer has accepted the asset. Events and circumstances frequently do not occur as expected. Even if the events anticipated under the assumptions occur, actual results are still likely to be different from the estimates since other anticipated events frequently do not occur as expected and the variation may be material. The related account balances at the end of the reporting year are disclosed in the Note 4, 16A and 20A on revenues and contract assets and contract liabilities. Determination of lease term of contracts with extension options: The Company determines the lease term as the non-cancellable term of the lease, together with any periods covered by an option to extend the lease if it is reasonably certain to be exercised, or any periods covered by an option to terminate the lease, if it is reasonably certain not to be exercised. The Company has a lease contract that include extension option. The Company applies judgement in evaluating whether it is reasonably certain whether or not exercise the option to extend the lease. That is, it considers all relevant factors that create an economic incentives for it to exercise the extension. After the commencement date, the Company reassess the lease term whether there is a significant event or change in circumstances that is within its control and affects its ability to exercise or not to exercise the option to extend (e.g. construction of significant leasehold improvements or significant customisation to the leased asset). The Company included the extension option in the lease term for leases of leasehold buildings because of the leasehold improvements made and the significant costs that would arise to replace the assets.


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3. Related party relationships and transactions The financial reporting standard on related party disclosures requires the reporting entity to disclose: (a) transactions with its related parties; and (b) relationships between parents and subsidiaries irrespective of whether there have been transactions between those related parties. A party is related to a party if the party controls, or is controlled by, or can significantly influence or is significantly influenced by the other party.

3A. Members of a group:

Name

Relationship

Country of incorporation

Co-operative of SCDF Employees Limited Ultimate and immediate

holding co-operation Singapore

COSEM HR Capital and Consultancy Pte. Ltd. Subsidiary Singapore Unistrong Technology (S) Pte. Ltd. Joint venture Singapore Related companies in these financial statements refer to members of the above group of companies.

3B. Related party transaction:

There are transactions and arrangements between the reporting entity and members of the group and the effects of these on the basis determined between the parties are reflected in these financial statements. The intercompany balances are unsecured without fixed repayment terms and interest unless stated otherwise. For any non-current balances no interest or charge is imposed unless stated otherwise. In addition to the transactions and balances disclosed elsewhere in the notes to the financial statements, this item includes the following: Significant related party transactions: 2020

$ 2019

$ Joint venture: Management service fees 120,000 120,000 Training and airfare fees 10,736 11,138 Sale of goods 6,500 -

Subsidiary: Loan to subsidiary (Note 15) 50,000 -

3C. Key management personnel compensation

Key management personnel are those persons having authority and responsibility for planning,

directing and controlling the activities of the company, directly or indirectly, including any

directors of the company. The key management personnel are members of the Board of

Directors of company do not receive remuneration in consideration of his/her voluntary services

rendered to the company.


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4. Revenue

4A. Revenue classified by type of good or service:

2020

$ 2019

$

Consultancy services 2,931,175 2,636,992

Manpower outsourcing services 6,260,436 5,995,163

Maintenance services 43,400 37,467

Management services 120,000 120,000

Safety services 3,341,424 3,186,210

Training services 2,109,752 1,825,707

Sales of safety and security goods 2,593,473 851,316

17,399,660 14,652,855

4B. Revenue classified by timing of revenue recognition:

Point in time 2,593,473 851,316

Over time 14,806,187 13,801,539

17,399,660 14,652,855

5. Other gains and (other losses)

2020

$ 2019

$

Government grants income 191,937 206,269

Interest income 46,414 32,886

Miscellaneous income 952 299

Losses on foreign exchange transaction (30,751) (22,223)

208,552 217,231

Presented in profit or loss as:

Other gains 239,303 239,454

Other losses (30,751) (22,223)

208,552 217,231

6. Employee benefits expenses

2020

$ 2019

$

Employee benefits expense 9,975,111 9,405,342

Contribution to defined contribution plans 1,370,406 1,277,930

Other benefits 108,963 113,048

Total employee benefits expense 11,454,480 10,796,320

7. Finance costs

2020

$ 2019

$

Interest of lease liability (Note 19) 46,275 -


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8. Other expenses

The major components and other selected components include the following:

2020

$ 2019

$

Cost of services 1,921,295 1,850,489

Insurance 114,372 109,042

IT expenses 104,602 129,653

Legal and professional fee 132,321 22,261

Rental of land - 70,698

Repair and maintenance expenses 74,767 56,758

Staff annual leave 125,000 37,000

Training 73,388 128,040

Upkeep of motor vehicles expenses 32,591 58,302

9. Income tax

9A. Components of tax expense recognised in profit or loss include:

2020 $

2019 $

Current tax expense: Current tax expense 539,208 412,408 Under adjustments in respect of prior periods 36,548 52,275 575,756 464,683 Deferred tax expense: Under adjustments in respect of prior periods - 4,542


The income tax in profit or loss varied from the amount of income tax amount determined by applying the Singapore income tax rate of 17 % (2019: 17 %) to profit before tax as a result of the following differences: 2020

$ 2019

$ Profit before tax 3,086,983 2,223,562 Income tax expense at the above rate 524,787 378,006 Expenses not deductible 59,650 61,994 Utilisation of capital allowances (12,804) (10,167) Stepped income exemption (32,425) (17,425) Deferred income tax - 4,542 Under adjustments in respect of prior periods 36,548 52,275



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9. Income tax (cont’d)

9B. Deferred tax expense recognised in profit or loss includes:

2020

$

2019

$


property, plant and equipment -

4,542

9C. Deferred tax balance in the statement of financial position:

2020

$

2019

$

Deferred tax liabilities:

Beginning of financial year 23,460 18,918


plant and equipment -

4,542


10. Property, plant and equipment




$ $ $ $ $ Cost: At 1 April 2018 4,523,712 1,066,698 2,008,721 292,927 7,892,058 Additions - 82,415 - 2,033 84,448

At 31 March 2019 4,523,712 1,149,113 2,008,721 294,960 7,976,506 Additions 892,507 7,000 57,850 26,230 983,587

At 31 March 2020 5,416,219 1,156,113 2,066,571 321,190 8,960,093

Accumulated depreciation: At 1 April 2018 402,447 892,778 1,981,922 263,208 3,540,355 Depreciation for the year 174,024 80,737 25,040 16,163 295,964

At 31 March 2019 576,471 973,515 2,006,962 279,371 3,836,319 Depreciation for the year 217,044 56,892 8,912 14,739 297,587

At 31 March 2020 793,515 1,030,407 2,015,874 294,110 4,133,906

Carrying value: At 1 April 2018 4,121,265 173,920 26,799 29,719 4,351,703 At 31 March 2019 3,947,241 175,598 1,759 15,589 4,140,187

At 31 March 2020 4,622,704 125,706 50,697 27,080 4,826,187

There are restrictions or covenants imposed by the leases to sublet the asset to another party. The right-of-use asset can only be used by the lessee. Unless permitted by the owner, the leases prohibit selling or pledging the underlying leased asset as security. Typically, the leases are either non-cancellable or may only be cancelled by incurring a substantive termination fee. For lease over property, the lease require the property in a good state of repair and return the property in their original condition at the end of the lease. Insurance and maintenance fees on right-of-use asset are usually required under the lease contract.

For property lease management has elected to measure the right-of-use asset as if the new standard had been applied since the start of the lease, but using the incremental borrowing rate as at 1 April 2019. The right-of-use asset is set equal to the lease liability on the date of initial application.


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11. Investment in joint venture 2020

$ 2019

$

Interest in joint venture, at cost 2,668,000 2,668,000

Name of Joint Venture, country of incorporation, place of operations and principal activities

Percentage of equity held by the company

2020 2019 % % Emergency Ambulance Services Project #a with Unistrong Technology (S) Pte. Ltd. 66.7% 66.7% Singapore Emergency ambulance services

#a The financial statement of joint venture is unaudited.

Unistrong Technology (S) Pte. Ltd. (“UT”) and the company (“the parties”) set up a contractual agreement to work together for the purpose of provision of an Emergency Ambulance Service (“EAS”). The parties agreed to carry out the services by establishing a separate vehicle (a sub-division called EAS project under UT). The parties have 33.3% (UT) and 66.7% (the company) of interest respectively in the joint venture. The joint venture agreement establishes joint control of the activities of EAS project. The joint arrangement is carried out through a separate vehicle whose legal form confers separation between the parties and the separate vehicle and the parties have rights to the net assets of EAS project. The parties recognise their rights to the net assets of EAS project as investments and account for them using the equity method.

Summarised financial information in respect of EAS project. based on its FRS financial statements, and reconciliation with the carrying amount of the investment in the financial statements are as follows:

Summarised statement of financial position 2020

$ 2019

$

Inventories 66,854 71,292 Trade and other receivables 3,512,122 2,015,141 Cash and cash equivalents 1,649,631 2,701,532

Current assets 5,228,606 4,787,965 Non-current assets 399,718 1,105,696

Total assets 5,628,324 5,893,661

Current liabilities (1,628,324) (1,893,661)

Total liabilities (1,628,324) (1,893,661)

Net assets 4,000,000 4,000,000 Proportion of the Company’s ownership 66.7% 66.7% Company’s share of net assets 2,668,000 2,668,000

Carrying amount of investment 2,668,000 2,668,000


85

11. Investment in joint venture (cont’d) Summarised statement of profit or loss and other comprehensive income 2020

$ 2019

$

Revenue 12,028,200 11,873,200 Cost of sales (346,820) (270,921) Other income 199,885 136,163 Operating expenses (9,032,999) (8,943,090)

Profit before tax 2,848,266 2,795,352 Other comprehensive income - -

Total comprehensive income 2,848,266 2,795,352

Share of profit to the company at 66.7% (2019: 66.7%) 1,899,794 1,864,500

12. Investment in subsidiary 2020

$ 2019

$

Unquoted equity shares, at cost 50,000 -

As at end of the reporting period, details of the subsidiary is as follow: Name of subsidiaries, country of incorporation, place of operations and principal activities

Effective percentage of equity

2020 %

2019 %

Held by Company COSEM HR Capital and Consultancy Pte. Ltd. #a 100 - Singapore Employment agencies activities (excluding maid agencies) #a The subsidiary only incorporated on 1 February 2020 and the financial statement is unaudited.

13. Other financial asset 2020

$ 2019

$ Unquoted equity shares at FVTOCI Beginning of financial year 144,928 - Reclassification at 1 April 2018 upon adoption of FRS 109 - 144,928


14. Inventories 2020

$ 2019

$

Finished goods 94,173 107,239


86

15. Trade and other receivables

2020

$ 2019

$ Trade receivables: Outside parties 3,293,515 2,823,506 Less allowance for impairment (22,025) (47,629) Joint venture 870,183 1,107,978

Net trade receivables – subtotal 4,141,673 3,883,855

Other receivable: Subsidiary (Note 3B) 50,000 -

Net other receivable – subtotal 50,000 -

Total trade and other receivables 4,191,673 3,883,855

Movement in loss allowance on trade receivables: Balance at beginning of the year 47,629 - Allowance for impairment of trade receivables - 47,629 Bad debts written off (25,604) -

Balance at end of the year 22,025 47,629

The trade receivables are subject to the expected credit loss model under the financial reporting standard on financial instruments. The methodology applied for impairment loss is the simplified approach to measuring expected credit losses (ECL) which uses a lifetime expected loss allowance for all trade receivables. The expected lifetime losses are recognised from initial recognition of these assets. These assets are grouped based on shared credit risk characteristics and the days past due for measuring the expected credit losses. The allowance matrix is based on its historical observed default rates over a period of 12 months over the expected life of the trade receivables and is adjusted for forward-looking estimates.

At every reporting date the historical observed default rates are updated and changes in the forward-looking estimates are analysed. The loss allowance was determined as follows for both trade receivables:

Gross amount

ELR

Loss allowance

$ $ $

2020:

Current 2,115,246 0.00% –

Past due 1 to 365 days 2,040,349 0.00% –

> 365 days 8,103 100.00% 8,103

4,163,698 8,103

2019:

Current 1,137,406 0.00% –

Past due 1 to 365 days 2,746,810 0.00% –

> 365 days 47,268 100.00% 47,268

3,931,484 47,268


As part of the process of setting customer credit limits, different credit terms are used. The average credit period generally granted to trade customers is about 30 days (2019: 30 days). But some customers take a longer period to settle the amounts.


87


Concentration of trade receivables customers net of allowance for impairment as at the end of reporting year:

2020

$ 2019

$

Government bodies 1,276,140 646,810 Non-government bodies 2,865,533 3,237,045

4,141,673 3,883,855

The other receivables at amortised cost shown above are subject to the expected credit loss model under the financial reporting standard on financial instruments. The other receivables at amortised cost and which can be graded as low risk individually are considered to have low credit risk. At the end of the first reporting period a loss allowance is recognised at an amount equal to 12 month expected credit losses because there has not been a significant increase in credit risk since initial recognition. No loss allowance is necessary.


Other receivable due from subsidiary is unsecured, interest-free, repayable on demand. Other receivable are considered to have low credit risk as they are not due for payment at the end of the reporting period and there has been no significant increase in the risk of default on the receivables since initial recognition.

16. Other assets

2020

$ 2019

$

Contract assets (Note 16A) 812,173 886,668 Deposits 3,230,870 441,620 Interest receivables 38,118 29,533 Prepayments 255,182 256,247

Total other assets 4,336,343 1,614,068

16A. Contract assets

2020 $

2019 $

1.

The amount is made up of: 2. Consideration for work completed but not billed at the reporting date 812,173 886,668

3.

The movements in contract assets are as follows: 4. At beginning of the year 886,668 - 5. Transfer to revenue for performance obligation satisfied (886,668) - 6. Consideration for work completed but not billed at the reporting date 812,173

886,668

7.

At end of the year 812,173 886,668 8.


88

16. Other assets (cont’d)

16A. Contract assets (cont’d)

The contract assets are for: entity’s rights to consideration for work completed but not billed at the reporting date on the contracts; costs incurred to obtain or fulfil a contract with a customer; costs to obtain contracts with customers; pre-contract costs and setup costs; and the amount of amortisation and any impairment losses recognised in the reporting year. The contract assets are transferred to the receivables when the rights become unconditional. The entity recognises revenue for each respective performance obligation when control of the product or service transfers to the customer.

17. Cash and cash equivalents

2020

$ 2019

$

Not restricted in use 6,370,161 6,099,216

Short-term deposits 4,050,579 3,012,750

Cash at end of the year 10,420,740 9,111,966

The short-term deposits has a maturity period of 12 months (2019: 12 months) and interest rates

of 0.85% and 1.66% (2019: 0.85% and 1.66%).

17A. Cash and cash equivalents in the statement of cash flows:

As shown above 10,420,740 9,111,966

Cash restricted in use over 3 months (4,050,579) (3,012,750)

Cash and cash equivalents for statement of cash flows purpose at end of the year 6,370,161 6,099,216

18. Share capital

Number of shares

issued Share capital

$ Ordinary shares of no par value: Balance at 1 April 2018, 31 March 2019

and 31 March 2020 50,000 50,000

The ordinary shares of no par value are fully paid, carry one vote each and have no right to fixed income. The company is not subject to any externally imposed capital requirements. The ordinary shares of no par value are fully paid, carry one vote each and have no right to fixed income. The company is not subject to any externally imposed capital requirements.


89

18. Share capital (cont’d)

Capital management:

The objectives when managing capital are: to safeguard the reporting entity’s ability to continue as a going concern, so that it can continue to provide returns for owners and benefits for other stakeholders, and to provide an adequate return to owners by pricing the sales commensurately with the level of risk. The management sets the amount of capital to meet its requirements and the risk taken. There were no changes in the approach to capital management during the reporting year. The management manages the capital structure and makes adjustments to it where necessary or possible in the light of changes in conditions and the risk characteristics of the underlying assets. In order to maintain or adjust the capital structure, the management may adjust the amounts of dividends paid to owners, return capital to owners, issue new shares, or sell assets to reduce debt. Adjusted capital comprises all components of equity (that is, share capital and reserves).

There are no significant external borrowings. The debt-to-adjusted capital ratio does not provide a meaningful indicator of the risk of borrowings.

19. Other financial liability

2020

$

2019

$

Non-current:

Financial instrument with fixed interest rate:

Lease liability 842,347 -

Sub-total 842,347 -

Current:

Financial instrument with fixed interest rate:

Lease liability 25,737 -

Sub-total 25,737 -

Total non-current and current 868,084 -

The non-current portion is repayable as follows:

Due within 2 to 5 years 117,552 -

Due after 5 years 724,795 -

Total non-current portion 842,347 -

A reconciliation of liability arising from financing as follows:

1 April

2019

Addition

Cash

flows

Non-cash changes

31 March

2020

Accretion of

interests Other

$ $ $ $ $ $

Liability

Lease liability

- current 892,507 - (70,698) 46,275 (842,347) 25,737

- non-current - - - - 842,347 842,347

892,507 - (70,698) 46,275 - 868,084

The company has lease contract for land. The Company’s obligation under the lease is secured by the lessor’s title to the leased asset. The Company is restricted from assigning and subleasing the leased asset.


90

19. Other financial liability (cont’d)

(i) Carrying amounts of right-of-use assets classified within property, plant and equipment

Leasehold

land

$

At 1 April 2019 892,507

Depreciation (43,020)

At 31 March 2020 849,487

(ii) Amounts recognised in profit or loss

2020

$

Depreciation of right-of-use assets 43,020 Interest on lease liability 46,275

Total amount recognised in profit or loss 89,295

20. Trade and other payables

2020

$ 2019

$ Trade payables: Outside parties 227,151 220,537

Trade payables – subtotal 227,151 220,537

Other payables: Outside parties 48,101 95,121 Accruals 638,519 596,339 Provision for unutilised annual leave 290,000 165,000 GST payable 262,097 158,262 Contract liabilities (Note 20A) 1,853,265 528,184

Other payables – subtotal 3,091,982 1,542,906

Total trade and other payables 3,319,133 1,763,443

20A. Contract liabilities

2020 $

2019 $

9.

The amount is made up of: 10. Contract liabilities on long term contracts (over time method) 1,853,265 528,184 11.

The movements in contract liabilities are as follows: 12. At beginning of the year 528,184 - 13. Performance obligation satisfied – revenue recognised (528,184) - 14. Consideration received or receivable 1,853,265 528,184 15. At end of the year 1,853,265 528,184 16.


91

21. Dividends on equity shares Rate per share 2020

$ 2019

$ 2020

$ 2019

$ Interim dividend paid net of income tax - 8 - 400,000

Total dividends paid in the year - 8 - 400,000

22. Financial instruments: information on financial risks

22A. Categories of financial assets and liabilities

The following table categories the carrying amounts of financial assets and liabilities recorded at the end of the reporting year:

2020

$ 2019

$ Financial assets: Financial assets at amortised cost 14,612,413 12,995,821 Financial assets that is an equity investment at fair value through other comprehensive income (FVTOCI) 144,928 144,928

At end of the year 14,757,341 13,140,749

Financial liabilities: Financial liabilities at amortised cost 2,333,952 1,235,259

At end of the year 2,333,952 1,235,259

Further quantitative disclosures are included throughout these financial statements.

22B. Financial risk management

The main purpose for holding or issuing financial instruments is to raise and manage the finances for the entity’s operating, investing and financing activities. There are exposures to the financial risks on the financial instruments such as credit risk, liquidity risk and market risk comprising interest rate, currency risk and price risk exposures. Management has certain practices for the management of financial risks. However, these are not documented in formal written documents. The following guidelines are followed: All financial risk management activities are carried out and monitored by senior management staff. All financial risk management activities are carried out following acceptable market practices.

There have been no changes to the exposures to risk; the objectives, policies and processes for managing the risk and the methods used to measure the risk.

22C. Fair values of financial instruments

The analyses of financial instruments that are measured subsequent to initial recognition at fair value, grouped into Levels 1 to 3 are disclosed in the relevant notes to the financial statements. These include both the significant financial instruments stated at amortised cost and at fair value in the statement of financial position. The carrying values of current financial instruments approximate their fair values due to the short-term maturity of these instruments and the disclosures of fair value are not made when the carrying amount of current financial instruments is a reasonable approximation of the fair value.


92

22. Financial instruments: information on financial risks (cont’d) 22D. Credit risk on financial assets

Financial assets that are potentially subject to concentrations of credit risk and failures by

counterparties to discharge their obligations in full or in a timely manner. These arise principally

from cash balances with banks, cash equivalents, receivables and other financial assets. The

maximum exposure to credit risk is the total of the fair value of the financial assets at the end

of the reporting year. Credit risk on cash balances with banks and any other financial

instruments is limited because the counter-parties are entities with acceptable credit ratings.

For expected credit losses (ECL) on financial assets, the three-stage approach in the financial

reporting standard on financial instruments is used to measure the impairment allowance.

Under this approach the financial assets move through the three stages as their credit quality

changes. However, a simplified approach is permitted by the financial reporting standards on

financial instruments for financial assets that do not have a significant financing component,

such as trade receivables. On initial recognition, a day-1 loss is recorded equal to the 12 month

ECL (or lifetime ECL for trade receivables), unless the assets are considered credit impaired.

For credit risk on trade receivables an ongoing credit evaluation is performed on the financial

condition of the debtors and an impairment loss is recognised in profit or loss. Reviews and

assessments of credit exposures in excess of designated limits are made. Renewals and

reviews of credits limits are subject to the same review process.

Note 17 discloses the maturity of the cash and cash equivalents balances. Cash and cash

equivalents are also subject to the impairment requirements of the standard on financial

instruments. There was no identified impairment loss.

22E. Liquidity risk – financial liabilities maturity analysis

The liquidity risk refers to the difficulty in meeting obligations associated with financial liabilities

that are settled by delivering cash or another financial asset. It is expected that all the liabilities

will be paid at their contractual maturity. The average credit period taken to settle trade payables

is about 30 to 60 days (2019: 30 to 60 days). The other payables are with short-term durations.

The classification of the financial assets is shown in the statement of financial position as they

may be available to meet liquidity needs and no further analysis is deemed necessary.

The following table analyses the non-derivative financial liabilities by remaining contractual

maturity (contractual and undiscounted cash flows):


Less than

1 year

2 – 5

years

After 5

years Total

$ $ $ $

2020:

Lease liability 25,737 117,552 724,795 868,084

Trade and other payables 2,333,952 - - 2,333,952

At end of the year 2,359,689 117,552 724,795 3,202,036

2019:

Trade and other payables 1,235,259 - - 1,235,259

At end of the year 1,235,259 - - 1,235,259

The undiscounted amounts on the borrowings with fixed interest rates are determined by reference to the conditions existing at the reporting date.


93

22. Financial instruments: information on financial risks (cont’d) 22F. Interest rate risk

The interest rate risk exposure is mainly from changes in fixed interest rates and floating interest rates and it mainly concerns financial liabilities. The interest from financial assets including cash balances is not significant. The following table analyses the breakdown of the significant financial instruments by type of interest rate:

2020

$ 2019

$

Financial assets with interest:

Fixed rates 4,050,579 3,012,750

Financial liabilities with interest:

Fixed rates 868,084 -

Sensitivity analysis: The effect on pre-tax profit is not significant. 22G. Foreign currency risk

The company is not exposed to foreign currency risk.

23. Operating lease commitments – as lessee At the end of the reporting year, the total of future minimum lease payments commitment under non-cancellable operating leases are as follows: 2019 $

Not later than one year 70,698

Rental expense for the year 70,698

Operating lease commitment is for land used for the company’s operations. The lease rental terms are negotiated for 2 years and rentals are not subject to an escalation clause. The lease is revised at each renewal date to reflect market rentals. As disclosed in Note 2A, the association has adopted FRS 116 on 1 January 2019. These lease payments have been recognised as right-of-use assets and lease liabilities on the statement of financial position as at 31 March 2020, except for short-term and low-value leases.

24. Changes and adoption of financial reporting standards

The accounting policies adopted are consistent with those of the previous financial year except that in the current financial year, the Company has adopted all the new and amended standards which are relevant to the Company and are effective for annual financial periods beginning on or after 1 January 2019. Except for the adoption of FRS 116 Leases described below, the adoption of these standards did not have any material effect on the financial performance or position of the Company.


94

24. Changes and adoption of financial reporting standards (cont’d) FRS 116 Leases FRS 116 supersedes FRS 17 Leases, INT FRS 104 Determining whether an Arrangement contains a Lease, INT FRS 15 Operating Leases-Incentives and INT FRS 27 Evaluating the Substance of Transactions Involving the Legal Form of a Lease. The standard sets out the principles for the recognition, measurement, presentation and disclosure of leases and requires lessees to recognise most leases on the statement of financial position.

The Company adopted FRS 116 using the modified retrospective method of adoption with the

date of initial application of 1 April 2019. Under this method, the standard is applied

retrospectively with the cumulative effect of initially applying the standard recognised at the

date of initial application as an adjustment to the opening balance of retained earnings. The

Company elected to use the transition practical expedient to not reassess whether a contract

is, or contains a lease at 1 April 2019. Instead, the Company applied the standard only to

contracts that were previously identified as leases applying FRS 17 and INT FRS 104 at the

date of initial application.

The effect of adopting FRS 116 as at 1 April 2019 was as follows:

Increase

$

Plant and equipment 892,507

Other financial liabilities 892,507

The Company has lease contracts for factory premises. Before the adoption of FRS 116, the

Company classified each of its leases (as lessee) at the inception date as either a finance lease

or an operating lease. The accounting policy prior to 1 January 2019 is disclosed in Note 2A.

Upon adoption of FRS 116, the Company applied a single recognition and measurement

approach for all leases except for short-term leases and leases of low-value assets. The

accounting policy beginning on and after 1 January 2019 is disclosed in Note 2A. The standard

provides specific transition requirement and practical expedients, which have been applied by

the Company.

(a) Leases previously accounted for as operating leases

The Company recognised right-of-use assets and lease liabilities for those leases previously

classified as operating leases, except for short-term leases and leases of low-value assets. The

right-of-use assets for the leases were recognised based on the carrying amount as if the

standard had always been applied, using the incremental borrowing rate at the date of initial

application. Lease liabilities were recognised based on the present value of the remaining lease

payments, discounted using the incremental borrowing rate at the date of initial application.

The Company also applied the available practical expedients wherein it:

Used discount rates 5.25% to a portfolio of leases with reasonably similar characteristics;

relied on its assessment of whether leases are onerous immediately before the date of

initial application as an alternative to performing an impairment review;


95

24. Changes and adoption of financial reporting standards (cont’d) FRS 116 Leases (cont’d)

(a) Leases previously accounted for as operating leases (cont’d)

The Company also applied the available practical expedients wherein it: (cont’d)

applied the short-term leases exemption to leases with lease term that ends within 12 months of the date of initial application;

excluded the initial direct costs from the measurement of the right-of-use asset at the

date of initial application; and

used hindsight in determining the lease term where the contract contained options to extend or terminate the lease.

The lease liabilities as at 1 April 2019 can be reconciled to the operating lease commitments as of 31 March 2019, as follow:

$

Operating lease commitments as at 31 March 2019 1,466,980 Weighted average incremental borrowing rate as at 1 April 2019 5.25% Lease liabilities as at 1 April 2019 892,507

25. Standards in issue but not yet effective

The Company has not adopted the following standards applicable to the Company that have been issued but not yet effective:

Description

Effective date for periods beginning on

or after Amendments to References to the Conceptual Framework in FRS Standards

1 January 2020

Amendments to FRS 1 and FRS 8 Definition of Material 1 January 2020

The directors expect that the adoption of the standards above will have no material impact on the financial statements in the year of initial application.

26. Comparative figure

The financial statements for the reporting year ended 31 March 2019 were audited by other independent auditor (other than Pinnally PAC) whose report dated 2 September 2019 expressed an unqualified opinion on those financial statements.


96

COSEM SAFETY AND SECURITY SERVICES PTE. LTD.

(Registration No: 200613733Z)

The Accompanying Supplementary Statement of Profit or Loss

and Other Comprehensive Income

Has Been Prepared For Management Purposes Only

And Does Not Form Part Of The Audited Financial Statements


97

Supplementary Statement of Profit or Loss and Other Comprehensive Income


2020 2019 $ $

Revenue 17,399,660 14,652,855

Other gains 239,303 239,454

Purchase of inventories (1,571,047) (454,992)

Changes in inventories (13,066) (78,751)

Employee benefits expenses (11,454,480) (10,796,320)

Depreciation expenses (297,587) (295,964)

Finance costs (46,275) -

Other expenses (3,038,568) (2,884,997)

Other losses (30,751) (22,223)

Share of profit of joint venture 1,899,794 1,864,500

Profit before tax 3,086,983 2,223,562



98


Year Ended 31 March 2020 2.

3.

4.

Revenue 2020 2019 5.

$ $ 6.

7.

Rendering of services 14,806,187 13,801,539 8.

Sale of goods 2,593,473 851,316 9.

17,399,660 14,652,855 10.

11.

12.

Other gains 2020 2019 1.

$ $ 2.

3.

Interest income from fixed deposits 46,414 32,886 1.

Government grants 191,937 206,269 1.

Others 952 299 2.

239,303 239,454 3.

4.

5.

Employee benefits expense 2020 2019 6.

$ $ 7.

8.

Wages, salaries and bonuses 9,975,111 9,405,342 9.

Post-employment benefits 1,370,406 1,277,930 10.

Other benefits 108,963 113,048 11.

Total employee benefits expense 11,454,480 10,796,320 12.

13.

14.

Finance costs 2020 2019 15.

$ $ 16.

17.

Lease liabilities 46,275 - 18.

Total finance costs 46,275 - 19.

20.

Other losses 2020 2019 21.

$ $ 22.

Loss on foreign exchange 30,751 22,223

30,751 22,223



99


Year Ended 31 March 2020 2. 3.

Other expenses 2020 2019 4.

$ $ 5.

6.

Audit fee 12,800 8,000 7.

Allowance for doubtful debts - 47,629 8.

Bad debts written off 20,120 - 9.

Bank charges 8,028 7,465 10.

Cleaning expenses 16,450 12,953 1.

Cost of services 1,921,295 1,850,489 2.

Donation 1,400 250 1.

Entertainment 7,946 12,125 1.

Fine and penalty 1,000 - 1.

Foreign Workers Levy 16,980 14,701 2.

General expenses 8,998 10,700 3.

Insurance 114,372 109,042 1.

IT expenses 104,602 129,653 1.

Legal and professional fee 132,321 22,261 2.

Office supplies 33,850 16,908 1.

Postage, printing and stationery 20,171 24,380 1.

Promotion 39,683 2,921 2.

Property tax 40,200 40,200 3.

Recruitment expenses 5,019 3,812 1.

Rental of land - 70,698 2.

Repair and maintenance 74,767 56,758 1.

Secretary fee 720 776 1.

Skill development levy 20,172 18,797 2.

Service charge 7,612 4,039 3.

Staff annual leave 125,000 37,000 1.

Tax fee 5,800 4,880 1.

Telecommunication 38,010 38,351 1.

Training 73,388 128,040 1.

Travel and transport 100,825 100,737 1.

Upkeep of motor vehicle expenses 32,591 58,302 2.

Utilities 54,448 53,130 3.

3,038,568 2,884,997 1.

2.


Making Your World Safe

Co-operative of SCDF Employees Limited

www.cosem.org.sg

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