Ellipsiz : Annual Report 2023

A N N U A L 2 0 2 3 R E P O R T

CORPORATE INFORMATION

BOARD OF DIRECTORS

David Ong Kim Huat

(Chairman and Independent Director)

Kelvin Lum Wen-Sum

(Chief Executive Officer and Executive Director)

Amos Leong Hong Kiat

(Independent Director)

Clement Leow Wee Kia

(Independent Director)

Iris Wu Hwee Tan

(Non-IndependentNon-Executive Director)

Adrian Lum Wen-Hong

(Non-IndependentNon-Executive Director)

AUDIT AND RISK COMMITTEE

Amos Leong Hong Kiat (Chairman)

David Ong Kim Huat

Clement Leow Wee Kia

Iris Wu Hwee Tan

NOMINATING COMMITTEE

Clement Leow Wee Kia (Chairman)

David Ong Kim Huat

Amos Leong Hong Kiat

Kelvin Lum Wen-Sum

REMUNERATION COMMITTEE

Clement Leow Wee Kia (Chairman)

David Ong Kim Huat

Amos Leong Hong Kiat

COMPANY SECRETARY

Chow Ching Sian

COMPANY REGISTRATION NO.

199408329R

REGISTERED OFFICE

54 Serangoon North Avenue 4 #05-02

Singapore 555854

Tel: [phone]

Fax: [phone]

Email: [e-mail]

Website: www.ellipsiz.com

SHARE REGISTRAR

M & C Services Private Limited

112 Robinson Road

#05-01 Singapore 068902

AUDITOR

Ernst & Young LLP

One Raffles Quay North Tower, Level 18 Singapore 048583

Partner-in-charge: Tan Soon Seng (effective from the financial year ended 30 June 2023)

PRINCIPAL BANKERS

CIMB Bank Berhad

Citibank, N.A.

DBS Bank Ltd

Malayan Banking Berhad

Oversea-Chinese Banking Corporation Limited

United Overseas Bank Limited

ELLIPSIZ LTD	01
ANNUAL REPORT 2023

CONTENTS

02

03

05

11

13

16

18

51

Financial Highlights

Letter to Shareholders

Board of Directors

Key Management

Operations Review

Financial Review

Sustainability Report

Corporate Governance Report

VISION

We aim to be the best creator of value for our customers, business partners and stakeholders in markets that we participate in

MISSION

80	Financial Statements	To enable our customers
		and business partners
182	Statistics of Shareholdings	to achieve their goals
		optimally, we offer
184	Notice of Annual General Meeting	innovative and integrated
solutions
192	Additional Information on
Directors Seeking Re-Election

Proxy Form

02		ELLIPSIZ LTD
ANNUAL REPORT 2023
FINANCIAL HIGHLIGHTS
	2023	2022
	$' mil	$' mil
RESULTS
Revenue	59.1	55.6
Gross profit	11.7	12.1
Profit for the year	0.7	3.2
Final dividend per share (cent)	1.001	1.00
FINANCIAL POSITION
Total assets	140.5	143.9
Total liabilities	20.8	22.2
Shareholders' equity	107.2	113.6
FINANCIAL RATIOS
Gross profit margin (%)	19.7	21.9
Earnings per share (cents)	1.23	1.65
NAV per share (cents)	64.47	68.18
Return on equity (%)	1.9	2.4
Current ratio (times)	3.8	3.9

1 Final dividend per share is subject to shareholders' approval at the Annual General Meeting to be held on 24 October 2023.

REVENUE BY REGION

SHAREHOLDERS' EQUITY ($ MILLION)

26%

10%

22%

FY2023

7%	FY2021
	113.7
1%
FY2022
56%		113.6
	FY2023	107.2

8%	TOTAL DIVIDEND PAYOUT (CENTS)
1%

14%FY2022

55%	FY2021	2.5
	FY2022	1.0
	FY2023	1.0

Singapore Malaysia China Taiwan Other Regions

ELLIPSIZ LTD	03
ANNUAL REPORT 2023

LETTER TO SHAREHOLDERS

DEAR SHAREHOLDERS

It is my privilege to present on behalf of the Board of Directors of Ellipsiz Ltd, the Group's Annual Report for the financial year ended 30 June 2023 ("FY2023").

FY2023 continued to be a challenging year for businesses with the unprecedented supply chain disruptions and surge in inflation still reeling from the COVID-19 pandemic. While the global economy continues to face an uncertain outlook stemming from the negative spillovers of the on-going geopolitical tensions and war in Ukraine, the situation is further exacerbated by global climate change causing a wide range of impacts across regions and economic sectors. These have inevitably led to food protectionism being on the rise as countries impose export restrictions to safeguard local supplies for domestic consumption.

The Company had through its wholly-owned subsidiary, Ellipsiz Agro Investments Pte Ltd ("EAIPL"), made an acquisition of a 40% interest in ISE Capital Management Pte Ltd ("ICM") on 30 June 2022 (the "Initial Acquisition") and increased its interest in ICM to 80% during FY2023. ICM holds a 70% interest in ISE Foods Holdings Pte Ltd ("IFH") which will be developing Singapore's 4th commercial egg farm, in collaboration with one of the world's largest egg producers, to produce high quality eggs for local consumers. EAIPL had also entered into a shareholder loan agreement in July 2022 to extend a shareholder loan of up to $28.5 million to ICM (the "Shareholder Loan") for the ultimate purpose of meeting the costs in connection with the development of the commercial egg farm. Our investment in this Egg Production and Distribution ("EPD") business will enable the Group to contribute positively and participate directly in the nation-wide movement towards food security goal and sustainability development.

YEAR IN REVIEW

The Group had achieved revenue of $59.1 million in FY2023. Its net profit was $0.7 million and shareholders' equity stood at $107.2 million.

The increase in revenue by $3.5 million compared to the last financial year was attributed to the revenue contribution of $56.1 million from the Group's core business in providing Distribution and Services Solutions ("DSS") to customers in the semiconductor, electronics manufacturing and medical industries. Our DSS division has continued to deliver stable sales from both its Singapore and China operations, and had achieved higher equipment and consumables sales during the year. Gross profit for the year was $11.7 million, a decrease of $0.4 million as a result of change in product revenue mix.

Net profit of the Group for FY2023 of $0.7 million was significantly lower than the net profit of $3.2 million reported for the last financial year. The decrease in profit was because of the consolidation of expenses of the EPD business from 30 June 2022 as well as the lower fair value gain recognised on the land in Bintan, Indonesia. This decrease was partially mitigated by a higher finance income due to the higher interest rate environment.

The shareholders' equity of $107.2 million as of 30 June 2023 translates to 64.5 cents per share.

SHAREHOLDERS' RATIFICATION

In our Letter to Shareholders last year, we had explained that the Company was notified by Singapore Exchange Securities Trading Limited ("SGX-ST") that, pursuant to Rule 1005 of the Listing Manual of SGX-ST ("Listing Manual"), SGX-ST is of the view that both the Initial Acquisition and the Shareholder Loan should be aggregated and treated as if they were one transaction (collectively, the "Initial Transactions"). Under such circumstance, the