Powering a Cleaner Future Annual Report 2015 CONTENTS
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EINDEC CORPORATION LIMITED (Company Registration No.: 201508913H) (Incorporated in the Republic of Singapore on 2 April 2015) Powering A Cleaner Future Annual Report 2015 CONTENTS Corporate Profile 1 Letter to Shareholders 2 Operations and Financial Review 6 Board of Directors 10 Key Management 12 Corporate Governance Report 13 Directors’ Statement 37 Independent Auditors’ Report 40 Financial Statement 42 Statistics of Shareholdings 90 Notice of AGM 92 Proxy form Eindec Corporation Limited (the "Company") was listed on Catalist of the Singapore Exchange Securities Trading Limited (the "SGX-ST") on 15 January 2016. The initial public offering of the Company was sponsored by UOB Kay Hian Private Limited (the "Sponsor"). This annual report has been prepared by the Company and its contents have been reviewed by the Sponsor for compliance with the relevant rules of the SGX-ST. The Sponsor has not independently verified the contents of this annual report. This annual report has not been examined or approved by the SGX-ST. The Sponsor and the SGX-ST assume no responsibility for the contents of this annual report, including the accuracy, completeness or correctness of any of the information, statements or opinions made or reports contained in this annual report. The contact persons for the Sponsor are Mr Alvin Soh, Head of Catalist Operations, Senior Vice President and Mr Josh Tan, Vice President, who can be contacted at 8 Anthony Road, #01-01, Singapore 229957, telephone (65) 6590 6881. CORPORATE PROFILE We are a regional clean air environmental and technological solutions group with diversified product lines spanning the commercial, industrial and consumer market segments. With an operating history since 1984, we have an smart air purifiers. We have completed the design established track record in the design, manufacture and prototype of a new line of smart air purifiers for and distribution of clean room and heating, ventilation distribution to the consumer market in the PRC. and air-conditioning (“HVAC“) equipment across a diversified customer base. We operate two manufacturing facilities in Singapore and Malaysia, with our facility in Singapore serving Leveraging on our technological expertise in as our headquarters and research and development clean room equipment, we have ventured into the (“R&D“) centre. We have also established offices in consumer air purifier market with our own brand of Malaysia, Singapore and the PRC. DIVERSIFIED RANGE OF PRODUCTS ENVIRONMENTAL AND TECHNOLOGICAL HVAC EQUIPMENT SOLUTIONS PRODUCTS PRESSURE RELIEF DAMPER SMART AIR PURIFIER Used to maintain the positive internal pressure of Certified to filter PM2.5 pollutants, formaldehyde clean rooms and bio-clean rooms to prevent the and benzene. intrusion of contaminated air. Dual ability to provide both fresh air intake ventilation and air purification through filters. FIRE SMOKE DAMPER Used in ventilation systems to prevent the spread Compact size suitable for residential homes and of toxic gases between divisions. offices. Reliable in emergency situations and able to Energy saving efficiency. withstand temperatures of up to 400 degrees Automatic temperature control system. Celsius without deformation. Allows remote control through smartphones. MARINE DECK FIRE DAMPER (CLASS H) CLEAN ROOM EQUIPMENT Used in ventilation systems of oil rigs and in the offshore oil and gas (“O&G”) industry to prevent the spread of fire, smoke and gas between fire FAN FILTER UNIT zones. Self-contained ceiling unit used in clean room applications in the semiconductor, electronics, GRILLES AND DIFFUSERS optical, biological, pharmaceutical and food Used mainly in commercial and industrial buildings industries, and in laboratory environments. to ensure even distribution of air within a confined space. AIR SHOWER Prevents clean room contamination by using air BALL JET DIFFUSER jets to blow at and remove fine particles attached Aesthetically appealing and used in large open to clothing, footwear and other materials. areas, such as concert halls, airports, theatres and museums for spot cooling or heating. Easy integration with any clean room design, can be custom-built to specific requirements and offers high degree of flexibility. EINDEC CORPORATION LIMITED | Annual Report 2015 1 LETTER TO SHAREHOLDERS We have confidence that Eindec Corporation, supported by our good management team, dedicated staff, extensive distribution network and strong manufacturing presence will be able to deliver sustainable growth in the years ahead. POWERING A GREEN FUTURE YEAR IN REVIEW 2015 marked the new turning point as Eindec Corporation 2015 recorded strong revenue of 18.1% to S$16.85 million Limited (“Eindec’’) geared up for the new listing on the for the full year ended 31 December 2015 (“FY2015”), Catalist in 2016 and establish a new business for air purifier from S$14.27 million a year ago on stronger contribution products. Incorporated on 2 April 2015, we are a regional from the HVAC segment and the maiden contribution from clean air environmental and technological solutions group the environmental and technological solution products with diversified product lines spanning the commercial, segment, which focuses on the manufacture and sale of industrial and consumer market segments. air purifier products in China. Established in 1984, we have a strong track record in the For FY2015, the clean room segment remained the largest design, manufacture and distribution of clean room and revenue contributor at 43.3%, followed by HVAC at 40.5%, HVAC equipment across a diversified customer base. air purifier at 12.4%, and others at 3.8%. Leveraging on our technological expertise in clean room Geographically, 54.9% of revenue came from Singapore, equipment, we have ventured into the consumer air followed by other ASEAN countries at 29.8% and others purifier market with our own brand of smart air purifiers at 15.3%. for distribution to the consumer market in the People’s Republic of China (the “PRC”). Gross profit increased by 35.0% to S$6.70 million in FY2015 due to contribution from higher-margin air purifier With production facilities in Malaysia and Singapore, we products, more clean room equipment servicing project have set up our corporate headquarters and research work with higher profit margin and increased sales in and development capabilities in both Singapore and higher profit margin clean room equipment. Gross margin Shenzhen of the PRC. Our products are distributed and improved to 39.7% in FY2015, from 34.8% in FY2014. supplied across countries in the Asia Pacific and Middle East regions. We have also been awarded the ISO 9002 certification since 1996. 2 EINDEC CORPORATION LIMITED | Annual Report 2015 OUR COMPETITIVE EDGE STRONG GROWTH STRATEGY Eindec provides a wide range of customised air purifier We have strong growth strategies centred on the expansion products and value-added services to key industries like of new business for environmental and technological building & construction, electronics and offshore oil and products in the PRC. We will commercialise our own brand gas industries. With 11 clean room equipment and 20 of air purifiers by our marketing and sales team in the HVAC equipment product lines, we have a complementary PRC. We aim to tap on application programming interface suite of solutions to cater to the unique needs of different to monitor the need for maintenance or replacement of industries. components, so as to increase revenue from existing customers. We also plan to expand product range to offer With specialised engineering and design capabilities, we other environmental and technological solutions such as are able to tailor to the design customised products to air purifier products utilising water filters. meet customers’ requirements and offer new products with innovative or enhanced features. We can leverage on We will invest in R&D on new and existing products. engineering and design capabilities to complete design Through the investment in engineering capabilities and and prototype of new brands of purifiers. R&D, we will develop new products and enhance existing products, in particular, fire and smoke dampers, fan-filter We have experienced and dedicated management team units and air purifiers. which have extensive knowledge and experience in the manufacture and sale of clean room and HVAC equipment. We will invest in the establishment and enhancement of In addition, our management team has strong network in manufacturing capabilities. Expand existing manufacturing the Southeast Asian and the PRC markets. facilities in Singapore and Malaysia as well as establishing manufacturing capabilities in the PRC, in particular, to Our established customer base and track record manufacture our air purifier products. underscores our significant presence within the Asia Pacific. A significant proportion of repeat customers attest to our product quality and our customers’ confidence in us. EINDEC CORPORATION LIMITED | Annual Report 2015 3 LETTER TO SHAREHOLDERS FUTURE PROSPECTS BUSINESS OUTLOOK The increasing demand for clean room and HVAC With the burgeoning economic growth in emerging equipment in Singapore and emerging markets. The markets, there will be corresponding growth of the majority of our revenue in FY2015 is from our clean domestic industries in these emerging economies room and HVAC equipment business generated from including the building, electronics, pharmaceutical, the building and electronic industry in Singapore and the biotechnology, chemical and