Old Chang Kee : Annual Reports And Related Documents

ANNUAL REPORT 2022

Contents

1 Corporate Profile

2 Chairman's Statement and Operations Review

6 Our Brands

• Retail Outlets
  10 Milestones

12	Group Structure
14	Financial Highlights
16	Board of Directors

1. Key Management
2. Corporate Information
3. Corporate Governance

1. Financial Statements

1. Statistics of Shareholdings

1. Notice of Annual General Meeting

1. Addendum
   Proxy Form

Our Advocacy

Delivering great food is our advocacy. Satisfying the wide palate of Singaporeans remains to be our delight; and we just keep getting better at it. Making good on its promise, Old Chang Kee carries on with its tradition of turning simple recipes into high quality dishes at fair prices. This is for the service of many hardworking Singaporeans who deserve all the delectable treats that our kitchen can provide.

This annual report has been reviewed by the Company's sponsor, PrimePartners Corporate Finance Pte. Ltd. (the "Sponsor"). It has not been examined or approved by the Singapore Exchange Securities Trading Limited (the "Exchange") and the Exchange assumes no responsibility for the contents of this document including the correctness of any of the statements or opinions made or reports contained in this document. The contact person for the Sponsor is Ms Ng Shi Qing, 16 Collyer Quay #10-00 Income at Raffles, Singapore 049318, [e-mail].

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Corporate Profile

Old Chang Kee is synonymous with quality food. An accessible go-to snack creator, a trusted store when you need to grab a bite or fill an empty stomach.

We have been present in Singapore for over 60 years now and we will remain as your Old Chang Kee, giving the same good old taste you have loved all these years. We specialise in the manufacture and sale of affordable and delectable food products of consistent quality, under the "Old Chang Kee" brand name. Our signature curry puff is sold at our outlets together with over 30 other food products including fishballs, chicken nuggets and chicken wings. We pride ourselves on always innovating and introducing new products to our customers. Most

of our sales are on a takeaway basis and our outlets are located at strategic locations to reach out to a wide range of consumers. The Dip 'n' Go retail outlet offers delicious food on the go, with a variety of accompanying dips. Bun Times retail outlets offer Hainanese inspired buns with a variety

of fillings like curry chicken and coconut. The "Curry Times", "O'My Kampong" and "Mushroom" dine-in retail outlets carry a range of local delights such as laksa, mee siam, nasi lemak and curry chicken. We also provide catering services to the central business district and selected areas in Singapore.

2 Old Chang KeeAnnual Report 2022

Chairman's Statement & Operations Review

Dear Shareholders,

It is my pleasure to present to you Old Chang Kee Ltd.'s (the "Company" or "Old Chang Kee" and together with its subsidiaries, the "Group") Annual Report and the Group's financial results for the financial year ended 31 March 2022 ("FY2022").

(A) STATEMENT OF COMPREHENSIVE INCOME

FY2022 vs FY2021

The Group's revenue increased by approximately S$2.2 million or 2.9% for FY2022, mainly due to an increase in revenue from retail outlets and delivery revenue, partially offset by lower revenue from catering revenue.

Revenue​ from retail outlets increased by approximately S$8.7 million or 14.1% mainly due to incremental revenue from new outlets and higher revenue from existing outlets, partially offset by decrease in revenue from closed outlets.

Revenue from other services, such as delivery and catering services, decreased by approximately S$6.5 million mainly due to absence of catering of packed meals to foreign workers dormitories in the

financial period from 1 April 2021 to 30 September 2021, partially offset by higher delivery and catering revenue in the second half of FY2022.

The Group's gross margin dropped by 1.3% to 64.3% in FY2022, mainly due to higher food cost from absence of economies of scale savings from the large-scale catering of packed meals to foreign workers dormitories, an increase in raw materials cost and higher utilities expenses during the year.

Other income decreased by approximately S$1.2 million due to lower government grants and rebates, including lower Jobs Support Scheme ("JSS") grants, and other employment support scheme incomes.

The increase in selling and distribution expenses was largely due to higher staff cost to support the increase in retail revenue from outlets, absence of the waiver of foreign worker levies received in April 2020, higher subcontract expenses to support the increase in demand from deliveries and lower rental rebate of about S$2.4 million, partially offset by lower depreciation expenses and packing material expenses during FY2022.

The decrease in administrative expenses was mainly due to lower staff incentives due to the decrease in net profit for FY2022; offset by increases in upkeep of motor vehicle, repair and maintenance expenses, and bank charges.

Finance costs decreased mainly due to lower loan interest rates and lower lease liabilities during the year.

Other expenses decreased by S$149,000 mainly due to lower impairment of right-of-use assets and property, plant and equipment for retail outlets affected by the pandemic as business conditions improve, and lower impairment of amount due from our joint venture in United Kingdom, partially offset by higher exchange rate losses on foreign currency denominated payables to related companies within the Group.

The decrease in depreciation expenses was mainly due to an increase in fully depreciated assets attributed to the right-of-use assets

and property, plant and equipment, partially due to recognition of impairment for loss making outlets in the prior year.

The Group's taxation expenses decreased by S$660,000 mainly due to the decrease in profit for FY2022, over-provision of a prior year tax expense of $95,000 and higher non-taxable grant income for the current financial year.

(B) STATEMENT OF FINANCIAL POSITION

Non-current assets

The Group's non-current assets decreased by approximately S$2.9 million, mainly due to:

1. a decrease in property, plant and equipment due to depreciation expenses, impairment for selected outlets and disposal of motor vehicles during FY2022; and

Old Chang KeeAnnual Report 2022

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1. a decrease in right-of-use assets mainly due to right-of-use depreciation expenses and impairment of right-of-use assets for retail outlets affected by the pandemic, offset by lease renewal and new lease committed during FY2022.

Current assets

The Group's current assets increased by approximately S$1.6 million mainly due to:

1. an increase in cash and bank balances of approximately

S$2.4 million as explained under the statement of cash flow in paragraph (C) below;

1. an increase in inventories of approximately S$130,000 mainly due to bulk purchase of finished goods;
2. an increase in short term deposits of approximately S$244,000, mainly due to deposits for new outlets and reclassification of lease deposits in accordance with the respective lease tenures; offset by refund of deposits from closed outlets;
3. a decrease in prepayments, mainly due to transfer of prepayment to equipment and renovation during the current period; and
4. a decrease in trade and other receivables of approximately S$1.0 million mainly due to cash receipts from the disposal of the Group's factory facility at Woodlands Loop and government support measures.