A N N U A L R E P O R T 2 0 1 6
Other income
The increase in other income of approximately S$360,000 was mainly due
to:
a. higher special employment credit, temporary employment credit
and wage credit schemes income of approximately S$230,000 and
an increase in government grant income of approximately S$35,000
to support the Group¡¯s productivity and expansion initiatives; and
b. insurance compensation income of approximately S$229,000 in
relation to damaged equipment; offset by
c. an absence in FY2016 of gain from disposal of motor vehicle income
of approximately S$117,000 which was recognised in FY2015.
Operating Expenses
Selling and distribution expenses
Selling and distribution (¡°S & D¡±) expenses increased by approximately
S$2.4 million or 8.5%. S & D expenses in FY2016 amounted to
approximately 40.9% of revenue as compared with approximately 38.9%
of revenue in FY2015.
The increase in S & D expenses as a percentage of revenue was largely
attributable to staff cost adjustments of approximately S$1.1 million in
response to the competitive labour market, higher outlet rental expenses
of approximately S$800,000, and higher cleaning and depreciation
expenses of approximately S$522,000.
Administrative expenses
Administrative expenses increased by approximately S$521,000 or 5.1%.
The increase in administrative expenses was mainly due to higher
staff cost of approximately S$547,000, offset by decreases in legal and
professional fees, and computer related expenses.
Other expenses
The decrease in other expenses of approximately S$39,000 in FY2016 was
mainly due to the absence of impairment for doubtful receivables and
lower fixed assets written off, offset by higher foreign exchange losses.
As a result of the above, total operating expenses increased by
approximately S$2.9 million or 7.4%. Total operating expenses amounted
to approximately 57.5% of revenue in FY2016 and 55.2% in FY2015
respectively.
Depreciation and amortisation
Depreciation increased by approximately S$288,000 or 7.6% in FY2016
as compared with FY2015, mainly due to an increase in depreciation
for outlets and the renovation of and equipment for the Group¡¯s new
factory at 4 Woodlands Terrace (¡°New Factory¡±). Amortisation expenses
increased by approximately S$30,000 mainly due to the purchase of new
enterprise resource planning software in FY2016.
Finance costs
The increase in finance costs of approximately S$83,000 was mainly due
to interest expenses on loans taken to finance the construction and
renovation of the Group¡¯s New Factory.
Profit before tax
The Group¡¯s profit before tax decreased from approximately S$6.7
million in FY2015 to approximately S$6.1 million in FY2016, a decrease of
approximately S$612,000 or 9.1%, due to the factors mentioned above.
Taxation
The Group¡¯s taxation expenses decreased by approximately S$301,000
or 21.2% mainly due to the lower profit before tax and lower non tax
deductible expenses for the current financial year.
