Company Registration No.

200508881R

TES-AMM (Singapore) Pte. Ltd.

Annual Financial Statements

31 December 2018
Director

Ramkripal Pandey

Company Secretary

Citco Singapore Pte Ltd

10 Changi Business Park Central 2
#05-01, Hansapoint@CBP
Singapore 486030

Registered Office

No. 9 Benoi Sector

Singapore 629844

Auditor

Ernst & Young LLP

One Raffles Quay
North Tower, Level 18
Singapore 048583

Index

Page

Director’s statement 1
Independent auditor’s report 3
Balance sheet 6
Statement of comprehensive income 7
Statement of changes in equity 8
Cash flow statement 9
Notes to the financial statements 10
The director is pleased to present his statement to the member together with the audited financial
statements of TES-AMM (Singapore) Pte. Ltd. (the “Company”) and the balance sheet and statement
of changes in equity of the Company for the financial year ended 31 December 2018.

Opinion of the director

In the opinion of the director,

(a) the accompanying balance sheet, statement of comprehensive income, statement of

changes in equity and cash flow statement together with the notes thereto are drawn up so
as to give a true and fair view of the financial position of the Company as at 31 December
2018 and the financial performance, changes in equity and cash flow of the Company for the
year ended on that date, and

(b) at the date of this statement, there are reasonable grounds to believe that the Company will
be able to pay its debts on the basis that the holding company has given written financial
support to the Company for its debts when they due.

Director

The director of the Company in office at the date of this statement is:

Ramkripal Pandey

Arrangements to enable director to acquire shares and debentures

Neither at the end of nor at any time during the financial year was the Company a party to any
arrangement whose objects are, or one of whose object is, to enable the director of the Company to
acquire benefits by means of the acquisition of shares or debentures of the Company or any other
body corporate.

Director’s interests in shares, warrants and debentures

The following director, who held office at the end of the financial year, had, according to the register of
director’s shareholdings required to be kept under Section 164 of the Singapore Companies Act,
Cap. 50, an interest in the shares of the holding company as stated below:

Direct interest

At the beginning At the end

Name of Director of financial year of financial year

The holding company

TES-Envirocorp Pte. Ltd.
(ordinary shares)

Ramkripal Pandey 1,908 1,908

Except as disclosed in this report, no director who held office at the end of the financial year had
interests in shares, share options, warrants or debentures of the Company, or of related corporations,
either at the beginning of the financial year, or at the end of financial year.
Auditor

Ernst & Young LLP have expressed their willingness to accept reappointment as auditor.

On behalf of the director,

Ramkripal Pandey
Director

Singapore

4 April 2019
Independent auditor’s report
For the financial year ended 31 December 2018

Independent auditor’s report to the member of TES-AMM (Singapore) Pte. Ltd.

Report on the audit of the financial statements

Opinion

We have audited the financial statements of TES-AMM (Singapore) Pte. Ltd. (the “Company”), which
comprise the balance sheet as at 31 December 2018, the statement of comprehensive income,
statement of changes in equity and cash flow statement of the Company for the year then ended, and
notes to the financial statements, including a summary of 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 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 December 2018 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 information

Management is responsible for other information. The other information comprises general
information and directors’ statement set out on pages 1 to 2.

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.
Independent auditor’s report
For the financial year ended 31 December 2018

Independent auditor’s report to the member of TES-AMM (Singapore) Pte. Ltd.

Responsibilities of management and director 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:

 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.

 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.

 Evaluate the appropriateness of accounting policies used and the reasonableness of

accounting estimates and related disclosures made by management.

 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 auditor’s report. However, future
events or conditions may cause the Company to cease to continue as a going concern.
Independent auditor’s report
For the financial year ended 31 December 2018

Independent auditor’s report to the member of TES-AMM (Singapore) Pte. Ltd.

Auditor’s responsibilities for the audit of the financial statements (cont’d)

 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.

Ernst & Young LLP

Public Accountants and
Chartered Accountants
Singapore
4 April 2019
Balance sheet
As at 31 December 2018

Note 2018 2017

$ $
Non-current assets
Property, plant and equipment 4 9,361,673 9,417,436
Intangible assets 5 548,724 907,493
Investment in subsidiaries 6 5,298,699 5,298,699

15,209,096 15,623,628

Current assets
Inventories 7 2,327,189 3,353,431
Trade receivables 8 10,582,878 7,169,100
Other receivables and deposits 9 2,732,981 4,799,221
Prepaid operating expenses 405,828 233,144
Amounts due from related companies 11 6,888,772 2,068,340
Amounts due from related parties 12 2,411,853 –
Cash and cash equivalents 13 17,596,723 7,175,528

42,946,224 24,798,764

Total assets 58,155,320 40,422,392

Current liabilities
Trade payables 14 4,038,994 255,374
Other payables and accruals 15 16,235,856 10,714,992
Dividends payable 9,574,035 –
Amount due to holding company 10 7,284,136 8,564,824
Amounts due to related companies 11 12,311,537 13,799,078
Amounts due to related parties 12 2,502,519 122,454

51,947,077 33,456,722

Net current liabilities (9,000,853) (8,657,958)

Non-current liability
Deferred tax liability 16 627,560 627,560

Total liabilities 53,257,511 34,084,282

Net assets 5,580,683 6,338,110

Equity attributable to owners of the parent

Share capital 17 3,890,810 3,475,405
Other reserves 18 415,405 830,810
Retained earnings 1,274,468 2,031,895

Total equity 5,580,683 6,338,110

The accompanying accounting policies and explanatory notes form an integral part of the financial
statements.
Statement of comprehensive income
For the financial year ended 31 December 2018

Note 2018 2017

$ $

Revenue 19 66,256,646 43,526,071

Cost of sales (48,281,929) (38,018,056)

Gross profit 17,974,717 5,508,015

Other items of income

Other income 408,690 2,889,712

Finance income 19,731 1,832

Other items of expenses

General and administrative expenses (5,316,430) (5,546,541)

Selling and distribution expenses (3,408,724) (537,042)

Other expenses (51,495) (282,968)

Finance costs (801,381) (561,647)

Profit before taxation 20 8,825,108 1,471,361

Taxation (expense)/credit 21 (8,500) 2,630

Profit for the year, representing total

comprehensive income for the year 8,816,608 1,473,991

The accompanying accounting policies and explanatory notes form an integral part of the financial
statements.
Statement of changes in equity
For the financial year ended 31 December 2018

Share Other
Capital reserves Retained Total
(Note 17) (Note 18) earnings equity
$ $ $ $

Balance as at 1 January 2017 3,060,000 2,492,432 557,904 6,110,336

Profit for the year, representing

total comprehensive income for
the year – – 1,473,991 1,473,991
Issuance of shares during the year 415,405 (415,405) – –
Adjustment to the contingent
consideration shares issued for
acquisition of subsidiary – (1,246,217) – (1,246,217)

Balance as at 31 December 2017

and 1 January 2018 3,475,405 830,810 2,031,895 6,338,110

Profit for the year, representing

total comprehensive income for
the year – – 8,816,608 8,816,608
Dividends on ordinary shares – – (9,574,035) (9,574,035)
Adjustment to the contingent
consideration shares issued for
acquisition of subsidiary 415,405 (415,405) – –

Balance as at 31 December 2018 3,890,810 415,405 1,274,468 5,580,683

The accompanying accounting policies and explanatory notes form an integral part of the financial
statements.
Cash flow statement
For the financial year ended 31 December 2018

2018 2017
$ $
Cash flows from operating activities
Profit before taxation 8,825,108 1,471,361
Adjustments for:
Depreciation of property, plant and equipment 1,044,800 1,114,043
Amortisation of intangible asset 367,519 381,204
Interest income (19,731) (1,832)
Interest expense 801,381 382,492
Property, plant and equipment written off 63,795 169,743
Intangible assets written off – 36,569
(Gain)/loss on disposal of property, plant and equipment (12,300) 76,656
Currency realignment 159,250 128,181

Operating profit before working capital changes 11,229,822 3,758,417

Decrease/(increase) in inventories 1,026,240 (1,206,054)
(Increase)/decrease in trade and other receivables (1,347,537) 10,988,968
(Increase)/decrease in prepaid operating expenses (172,684) 315,526
(Increase)/decrease in net amounts due from related
companies (3,028,259) 3,680,425
Increase in amounts (due from)/due to holding company 1,419,312 1,621,845
(Increase)/decrease in net amounts due from related parties (31,789) 703,115
Increase/(decrease) in trade and other payables 9,304,483 (11,333,762)

Cash flows generated from/(used in) from operations 18,399,589 8,528,480

Income tax (paid)/received (8,500) 2,630
Interest paid (801,381) (382,492)
Interest received 19,731 1,832

Net cash flows generated from operating activities 17,609,439 8,150,450

Cash flows from investing activities

Purchase of property, plant and equipment (1,062,482) (365,481)
Purchase of intangible assets – (3,500)
Proceeds from disposal of property, plant and equipment 13,200 20,000

Net cash flows (used in)/from investing activities (1,049,282) (348,981)

Cash flows from financing activities

Repayment of short term bank borrowings – (7,000,000)
Amounts due to related companies (3,279,712) –
Amounts due to holding companies (2,700,000) –

Net cash flow used in financing activity (5,979,712) (7,000,000)

Net increase in cash and cash equivalents 10,580,445 801,469

Effect of exchange rate changes on cash and cash equivalents (159,250) (128,181)

Cash and cash equivalents at beginning of year 7,175,528 6,502,240

Cash and cash equivalents at end of year (Note 13) 17,596,723 7,175,528

The accompanying accounting policies and explanatory notes form an integral part of the financial
statements.
1. Corporate information

TES-AMM (Singapore) Pte. Ltd. (the Company) is a private limited company incorporated
and domiciled in Singapore. The immediate and ultimate holding company is
TES-Envirocorp Pte. Ltd., a company incorporated in the Republic of Singapore.

The registered office and principal place of business of the Company is located at No. 9,
Benoi Sector, Singapore 629844.

The principal activities of the Company are those relating to recycling of metal waste and
scrap and other non-metal waste. There has been no significant change in the nature of
these activities during the year.

2. Summary of significant accounting policies

2.1 Basis of preparation

The financial statements of the Company have been prepared in accordance with Singapore
Financial Reporting Standards (“FRS”).

The financial statements have been prepared on a historical cost basis.

The financial statements are presented in Singapore Dollars (SGD or $).

Fundamental accounting concept

As at 31 December 2018 the Company’s current liabilities exceeds its current assets by
$9,000,853 (2017: $8,657,958). Excluding the dividend payable of S$9,574,035, the
Company will be in a net current asset position of S$573,182. The financial statements of the
Company have been prepared on a going concern basis because the holding company has
agreed to provide continuing financial support to the Company to meet its liabilities as and
when they fall due.

2.2 Changes in accounting policies

The accounting policies adopted are consistent with those of the previous financial year
except in the current financial year, the Company has adopted all the new and revised
Standards and Interpretations of FRS (“INT FRS”) that are effective for annual periods
beginning on or after 1 January 2018. The adoption of these standards and interpretations
did not have any effect on the financial performance or position of the Company.
2. Summary of significant accounting policies (cont’d)

2.3 Standards issued but not yet effective

The Company has not adopted the following standards that have been issued but not yet
effective:
Effective for annual
periods beginning
Description on or after

FRS 116 Leases 1 January 2019

INT FRS 123 Uncertainty over Income Tax Treatments 1 January 2019

Except for FRS 116, the directors expect that the adoption of the other standards above will
have no material impact on the financial statements in the period of initial application. The
nature of the impending changes in accounting policy on adoption of FRS 116 are described
below.

FRS 116 Leases

FRS 116 requires lessees to recognise most leases on balance sheets to reflect the rights to
use the leased assets and the associated obligations for lease payments as well as the
corresponding interest expense and depreciation charges. The standard includes two
recognition exemption for lessees – leases of ‘low value’ assets and short-term leases. The
new standard is effective for annual periods beginning on or after 1 January 2019.

The Company is currently assessing the impact of the new standard and plans to adopt the
new standard on the required effective date. The Company expects the adoption of the new
standard will result in increase in total assets and total liabilities, EBITDA and gearing ratio.

2.4 Functional and foreign currency

Functional currency

The management has determined the currency of the primary economic environment in
which the Company operates i.e. functional currency, to be Singapore dollars (“SGD”).
Revenue and major costs are primarily influenced by fluctuations in SGD.

Foreign currency

Transactions in foreign currencies are measured in the functional currency of the Company
and are recorded on initial recognition in the functional currency at exchange rates
approximating those ruling at the transaction dates. Monetary assets and liabilities
denominated in foreign currencies are translated at the rate of exchange ruling at the end of
the reporting period. Non-monetary items that are measured in terms of historical cost in a
foreign currency are translated using the exchange rates as at the dates of the initial
transactions. Non-monetary items measured at fair value in a foreign currency are translated
using the exchange rates at the date when the fair value was measured.

Exchange differences arising on the settlement of monetary items or on translating monetary

items at the end of the reporting period are recognised in profit or loss.
2. Summary of significant accounting policies (cont’d)

2.5 Subsidiaries

A subsidiary is an investee that is controlled by the Group. The Group controls an investee
when it 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.

In the Company’s separate financial statements, investments in subsidiaries are accounted

for at cost less impairment losses.

Principles of consolidation

The financial statements of the Company’s subsidiary companies, details of which are stated
in Note 6 to the financial statements are not consolidated as the Company is a wholly-owned
subsidiary company of TES-Envirocorp Pte. Ltd. (“TES”), a company incorporated in
Singapore. TES, which is located at No. 9, Benoi Sector, Singapore 629844, prepares the
consolidated financial statements, inclusive of the subsidiaries of the Company, which are
filed with the Accounting and Corporate Regulatory Authority in Singapore.

2.6 Property, plant and equipment

All items of property, plant and equipment are initially recorded at cost. Subsequent to
recognition, property, plant and equipment other than freehold land and buildings are
measured at cost less accumulated depreciation and any accumulated impairment losses.
The cost includes the cost of replacing part of the property, plant and equipment and
borrowing costs that are directly attributable to the acquisition, construction or production of a
qualifying property, plant and equipment. The cost of an item of property, plant and
equipment is recognised as an asset if, and only if, it is probable that future economic
benefits associated with the item will flow to the Company and the cost of the item can be
measured reliably.

When significant parts of property, plant and equipment are required to be replaced in
intervals, the Company recognises such parts as individual assets with specific useful lives
and depreciation, respectively. Likewise, when a major inspection is performed, its cost is
recognised in the carrying amount of the plant and equipment as a replacement if the
recognition criteria are satisfied. All other repair and maintenance costs are recognised in
profit or loss as incurred.

Depreciation is computed on a straight-line basis over the estimated useful lives of the assets
as follows:

Leasehold land and building - Over the remaining period of the lease term
Plant and machinery - 10 years
Leasehold improvements - 5 years
Furniture, fittings & equipment - 5 years
Motor vehicles - 5 years
Workshop tools - 5 years

Assets under construction included in property, plant and equipment are not depreciated as
these assets are not yet available for use.
2. Summary of significant accounting policies (cont’d)

2.6 Property, plant and equipment (cont’d)

The carrying values of property, plant and equipment are reviewed for impairment when
events or changes in circumstances indicate that the carrying value may not be recoverable.

The residual value, useful life and depreciation method are reviewed at each financial
year-end, and adjusted prospectively, if appropriate.

An item of property, plant and equipment is derecognised upon disposal or when no future
economic benefits are expected from its use or disposal. Any gain or loss on de-recognition
of the asset is included in profit or loss in the year the asset is derecognised.

2.7 Intangible assets

Intangible assets acquired separately are measured initially at cost. Following initial
acquisition, intangible assets are carried at cost less any accumulated amortisation and any
accumulated impairment losses. Internally generated intangible assets, excluding capitalised
development costs, are not capitalised and expenditure is reflected in profit or loss in the year
in which the expenditure is incurred.

The useful lives of intangible assets are assessed as either finite or indefinite.

Intangible assets with finite useful lives are amortised over the estimated useful lives and
assessed for impairment whenever there is an indication that the intangible asset may be
impaired. The amortisation period and the amortisation method are reviewed at least at each
financial year-end. Changes in the expected useful life or the expected pattern of
consumption of future economic benefits embodied in the asset is accounted for by changing
the amortisation period or method, as appropriate, and are treated as changes in accounting
estimates.

Intangible assets with indefinite useful lives or not yet available for use are tested for
impairment annually, or more frequently if the events and circumstances indicate that the
carrying value may be impaired either individually or at the cash generating unit level. Such
intangible assets are not amortised. The useful life of an intangible asset with an indefinite
useful life is reviewed annually to determine whether the useful life assessment continues to
be supportable. If not, the change in useful life from indefinite to finite is made on a
prospective basis.

Gains or losses arising from de-recognition of an intangible asset are measured as the
difference between the net disposal proceeds and the carrying amount of the asset and are
recognised in profit or loss when the asset is derecognised.

2.8 Inventories

Inventories are stated at the lower of cost and net realisable value. Costs incurred in bringing
the inventories to their present location and condition are accounted for as follows:

From financial year 2017, the company has decided to change the policy for the valuation of
its inventory from actual cost to standard cost. Together with the implementation of a new
ERP system, applying this new accounting policy will enable unit costing to be made
available and thus provide more reliable and relevant information to aid decision-making. No
material impact on the valuation of the inventory was noted had the company continue to use
actual costing.
2. Summary of significant accounting policies (cont’d)

2.8 Inventories (cont’d)

Where necessary, allowance is provided for damaged, obsolete and slow moving items to
adjust the carrying value of inventories to the lower of cost and net realisable value.

Net realisable value is the estimated selling price in the ordinary course of business, less
estimated costs of completion and the estimated costs necessary to make the sale.

2.9 Impairment of non-financial assets

The Company assesses at each reporting date whether there is an indication that an asset
may be impaired. If any indication exists, or when an annual impairment testing for an asset
is required, the Company makes an estimate of the asset’s recoverable amount.

An asset’s recoverable amount is the higher of an asset’s or cash-generating unit’s fair value
less costs of disposal and its value in use and is determined for an individual asset, unless
the asset does not generate cash inflows that are largely independent of those from other
assets or groups of assets. Where the carrying amount of an asset or cash-generating unit
exceeds its recoverable amount, the asset is considered impaired and is written down to its
recoverable amount. In assessing value in use, the estimated future cash flows expected to
be generated by the asset 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. In determining fair value less costs of disposal, recent market transactions are
taken into account, if available. If no such transactions can be identified, an appropriate
valuation model is used.

An assessment is made at each reporting date as to whether there is any indication that
previously recognised impairment losses may no longer exist or may have decreased. If such
indication exists, the Company estimates the asset’s or cash-generating unit’s recoverable
amount. A previously recognised impairment loss 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. If that is the case, the carrying amount of the asset is increased to its
recoverable amount. That increase cannot exceed the carrying amount that would have been
determined, net of depreciation, had no impairment loss been recognised previously. Such
reversal is recognised in profit or loss unless the asset is measured at revalued amount, in
which case the reversal is treated as a revaluation increase.

2.10 Borrowing costs

Borrowing costs are capitalised as part of the cost of a qualifying asset if they are directly
attributable to the acquisition, construction or production of that asset. Capitalisation of
borrowing costs commences when the activities to prepare the asset for its intended use or
sale are in progress and the expenditures and borrowing costs are incurred. Borrowing costs
are capitalised until the assets are substantially completed for their intended use or sale. All
other borrowing costs are expensed in the period they occur. Borrowing costs consist of
interest and other costs that an entity incurs in connection with the borrowing of funds.
2. Summary of significant accounting policies (cont’d)

2.11 Financial Instruments

(a) Financial assets

Initial recognition and measurement

Financial assets are recognised when, and only when the entity becomes party to
the contractual provisions of the instruments.

At initial recognition, the Company measures a financial asset at its fair value plus, in
the case of a financial asset not at fair value through profit or loss, transaction costs
that are directly attributable to the acquisition of the financial asset. Transaction
costs of financial assets carried at fair value through profit or loss are expensed in
profit or loss.

Trade receivables are measured at the amount of consideration to which the

Company expects to be entitled in exchange for transferring promised goods or
services to a customer, excluding amounts collected on behalf of third party, if the
trade receivables do not contain a significant financing component at initial
recognition.

Subsequent measurement

Investments in debt instruments

Subsequent measurement of debt instruments depends on the Company’s business

model for managing the asset and the contractual cash flow characteristics of the
asset.

Amortised cost

Financial assets that are held for the collection of contractual cash flows where
those cash flows represent solely payments of principal and interest are measured
at amortised cost. Financial assets are measured at amortised cost using the
effective interest method, less impairment. Gains and losses are recognised in
profit or loss when the assets are derecognised or impaired, and through
amortisation process.

De-recognition

A financial asset is derecognised where the contractual right to receive cash flows
from the asset has expired. On de-recognition of a financial asset in its entirety, the
difference between the carrying amount and the sum of the consideration received
and any cumulative gain or loss that had been recognised in other comprehensive
income is recognised in profit or loss.
2. Summary of significant accounting policies (cont’d)

2.11 Financial instruments (cont'd)

(b) Financial liabilities

Initial recognition and measurement

Financial liabilities are recognised when, and only when, the Company becomes a
party to the contractual provisions of the financial instrument. The Company
determines the classification of its financial liabilities at initial recognition.

All financial liabilities are recognised initially at fair value plus in the case of financial
liabilities not at fair value through profit or loss, directly attributable transaction costs.

Subsequent measurement

After initial recognition, financial liabilities that are not carried at fair value through
profit or loss are subsequently measured at amortised cost using the effective
interest method. Gains and losses are recognised in profit or loss when the liabilities
are derecognised, and through the amortisation process.

De-recognition

A financial liability is de-recognised when the obligation under the liability is

discharged or cancelled or expires. On derecognition, the difference between the
carrying amounts and the consideration paid is recognised in profit or loss.

(c) Offsetting of financial instruments

Financial assets and financial liabilities are offset and the net amount is presented in
the balance sheets, when and only when, there is a currently enforceable legal right
to set off the recognised amounts and there is an intention to settle on a net basis, or
to realise the assets and settle the liabilities simultaneously.

2.12 Impairment of financial assets

The Company recognises an allowance for expected credit losses (ECLs) for all debt
instruments not held at fair value through profit or loss. ECLs are based on the difference
between the contractual cash flows due in accordance with the contract and all the cash
flows that the Company expects to receive, discounted at an approximation of the original
effective interest rate. The expected cash flows will include cash flows from the sale of
collateral held or other credit enhancements that are integral to the contractual terms.

ECLs are recognised in two stages. For credit exposures for which there has not been a
significant increase in credit risk since initial recognition, ECLs are provided for credit losses
that result from default events that are possible within the next 12-months (a 12-month ECL).
For those credit exposures for which there has been a significant increase in credit risk since
initial recognition, a loss allowance is recognised for credit losses expected over the
remaining life of the exposure, irrespective of timing of the default (a lifetime ECL).
2. Summary of significant accounting policies (cont’d)

2.12 Impairment of financial assets (cont'd)

For trade receivables, the Company applies a simplified approach in calculating ECLs.
Therefore, the company does not track changes in credit risk, but instead recognises a loss
allowance based on lifetime ECLs at each reporting date. The Company has established a
provision matrix that is based on its historical credit loss experience, adjusted for
forward-looking factors specific to the debtors and the economic environment.

The Company consider a financial asset to be in default when internal or external information
indicates that the Company is unlikely to receive the outstanding contractual amounts in full
before taking into account any credit enhancements held by the Company. A financial asset
is written off when there is no reasonable expectation of recovering the contractual cash
flows.

2.13 Cash and cash equivalents

Cash and cash equivalents comprise cash at bank and on hand, demand deposits and
short-term, highly liquid investments that are readily convertible to known amount of cash
and which are subject to an insignificant risk of changes in value.

2.14 Provisions

Provisions are recognised when the Company has 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 the amount of the obligation can be
estimated reliably.

Provisions are reviewed at the end of each reporting period and adjusted to reflect the current
best estimate. If it is no longer probable that an outflow of economic resources will be
required to settle the obligation, the provision is reversed. If the effect of the time value of
money is material, provisions are discounted using a current pre-tax rate that reflects, where
appropriate, the risks specific to the liability. When discounting is used, the increase in the
provision due to the passage of time is recognised as a finance cost.

2.15 Leases

The determination of whether an arrangement is, or contains a lease is based on the

substance of the arrangement at inception date: whether fulfilment of the arrangement is
dependent on the use of a specific asset or assets and the arrangement conveys a right to
use the asset, even if that right is not explicitly specified in an arrangement.

For arrangements entered into prior to 1 January 2005, the date of inception is deemed to be
1 January 2005 in accordance with the transitional requirements of INT FRS 104.

As lessee

Operating lease payments are recognised as an expense in the 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.
2. Summary of significant accounting policies (cont’d)

2.16 Revenue

Revenue is measured based on the consideration to which the Company expects to be

entitled in exchange for transferring promised goods or services to a customer, excluding
amounts collected on behalf of third parties.

Revenue is recognised when the Company satisfies a performance obligation by transferring

a promised good or service to the customer, which is when the customer obtains control of
the good or service. A performance obligation may be satisfied at a point in time or over time.
The amount of revenue recognised is the amount allocated to the satisfied performance
obligation.

(a) Sales of goods

Revenue is recognised when the goods are delivered to the customer and all criteria for
acceptance have been satisfied.

The amount of revenue recognised is based on the transaction price, which comprises the
contractual price, net of the discounts. Based on the Company’s experience with
similar types of contracts, there are no significant variable considerations.

(b) Rendering of services

Revenue from processing fee is recognised when the services are rendered.

(c) Interest income

Interest income is recognised using the effective interest method.

2.17 Employee benefits

(a) Defined contribution plans

The Company participates in the national pension schemes as defined by the laws of
the countries in which it has operations. In particular, the Company makes
contributions to the Central Provident Fund scheme in Singapore, a defined
contribution pension scheme. Contributions to defined contribution pension
schemes are recognised as an expense in the period in which the related service is
performed.

(b) Employee leave entitlement

Employee entitlements to annual leave are recognised when they accrue to

employees. A provision is made for the estimated liability for annual leave as a result
of services rendered by employees up to the balance sheet date.
.
2. Summary of significant accounting policies (cont’d)

2.18 Taxes

(a) Current income tax

Current income tax assets and liabilities for the current and prior periods are
measured at the amount expected to be recovered from or paid to the taxation
authorities. The tax rates and tax laws used to compute the amount are those that
are enacted or substantively enacted at the end of the reporting period.

Current income taxes are recognised in profit or loss except to the extent that the tax
relates to items recognised outside profit or loss, either in other comprehensive
income or directly in equity. Management periodically evaluates positions taken in
the tax returns with respect to situations in which applicable tax regulations are
subject to interpretation and establishes provisions where appropriate.

(b) Deferred tax

Deferred tax is provided using the liability method on temporary differences at the
end of the reporting period between the tax bases of assets and liabilities and their
carrying amounts for financial reporting purposes.

Deferred tax liabilities are recognised for all temporary differences, except:

 Where the deferred tax liability arises from the initial recognition of goodwill or
of an asset or liability in a transaction that is not a business combination and,
at the time of the transaction, affects neither the accounting profit nor taxable
profit or loss; and

 In respect of taxable temporary differences associated with investments in

subsidiaries, associates and interests in joint ventures, where the timing of the
reversal of the temporary differences can be controlled and it is probable that
the temporary differences will not reverse in the foreseeable future.

Deferred tax assets are recognised for all deductible temporary differences, carry
forward of unused tax credits and unused tax losses, to the extent that it is probable
that taxable profit will be available against which the deductible temporary
differences, and the carry forward of unused tax credits and unused tax losses can
be utilised except:

 Where the deferred tax asset relating to the deductible temporary difference
arises from the initial recognition of an asset or liability in a transaction that is
not a business combination and, at the time of the transaction, affects neither
the accounting profit nor taxable profit or loss; and

 In respect of deductible temporary differences associated with investments in

subsidiaries, associates and interests in joint ventures, deferred tax assets are
recognised only to the extent that it is probable that the temporary differences
will reverse in the foreseeable future and taxable profit will be available against
which the temporary differences can be utilised.
2. Summary of significant accounting policies (cont’d)

2.18 Taxes (cont’d)

(b) Deferred tax (cont’d)

The carrying amount of deferred tax assets is reviewed at the end of each reporting
period and reduced to the extent that it is no longer probable that sufficient taxable
profit will be available to allow all or part of the deferred tax asset to be utilised.
Unrecognised deferred tax assets are reassessed at the end of each reporting
period and are recognised to the extent that it has become probable that future
taxable profit will allow the deferred tax asset to be recovered.

Deferred tax assets and liabilities are measured at the tax rates that are expected to
apply in the year when the asset is realised or the liability is settled, based on tax
rates (and tax laws) that have been enacted or substantively enacted at the end of
each reporting period.

Deferred tax relating to items recognised outside profit or loss is recognised outside
profit or loss. Deferred tax items are recognised in correlation to the underlying
transaction either in other comprehensive income or directly in equity and deferred
tax arising from a business combination is adjusted against goodwill on acquisition.

Deferred tax assets and deferred tax liabilities are off setted, if a legally enforceable
right exists to set off current income tax assets against current income tax liabilities
and the deferred taxes relate to the same taxable entity and the same taxation
authority.

Tax benefits acquired as part of a business combination, but not satisfying the
criteria for separate recognition at that date, would be recognised subsequently if
new information about facts and circumstances changed. The adjustment would
either be treated as a reduction to goodwill (as long as it does not exceed goodwill) if
it is incurred during the measurement period or in profit or loss.

(c) Sales tax

Revenues, expenses and assets are recognised excluding of sales tax except:

 Where the sales tax incurred on a purchase of assets or services is not

recoverable from the taxation authority, in which case the sales tax is
recognised as part of the cost of acquisition of the asset or as part of the
expense item as applicable; and

 Receivables and payables that are stated with the amount of sales tax
included.

The net amount of sales tax recoverable from, or payable to, the taxation authority is
included as part of receivables or payables in the balance sheet.

2.19 Share capital and share issuance expenses

Proceeds from issuance of ordinary shares are recognised as share capital in equity.
Incremental costs directly attributable to the issuance of ordinary shares are deducted
against share capital.
2. Summary of significant accounting policies (cont’d)

2.20 Contingencies

A contingent liability is:

(a) a possible obligation that arises from past events and whose existence will be
confirmed only by the occurrence or non-occurrence of one or more uncertain future
events not wholly within the control of the Company; or

(b) a present obligation that arises from past events but is not recognised because:

(i) It is not probable that an outflow of resources embodying economic benefits

will be required to settle the obligation; or

(ii) The amount of the obligation cannot be measured with sufficient reliability.

A contingent asset is a possible asset that arises from past events and whose existence will
be confirmed only by the occurrence or non-occurrence of one or more uncertain future
events not wholly within the control of the Company.

Contingent liabilities and assets are not recognised on the balance sheet of the Company,
except for contingent liabilities assumed in a business combination that are present
obligations and which the fair values can be reliably determined.

3. Significant accounting judgements and estimates

The preparation of the Company’s financial statements requires management to make

judgments, estimates and assumptions that affect the reported amounts of revenues,
expenses, assets and liabilities, and the disclosure of contingent liabilities at the end of each
reporting period. Uncertainty about these assumptions and estimates could result in
outcomes that could require a material adjustment to the carrying amount of the asset or
liability affected in the future periods.

3.1 Key sources of estimation uncertainty

The key assumptions concerning the future and other key sources of estimation uncertainty
at the end of the reporting period are discussed below. The Company based its assumptions
and estimates on parameters available when the financial statements was prepared. Existing
circumstances and assumptions about future developments, however, may change due to
market changes or circumstances arising beyond the control of the Company. Such changes
are reflected in the assumptions when they occur.

Income taxes

Significant judgement is involved in determining the Company provision for income taxes.
There are certain transactions and computations for which the ultimate tax determination is
uncertain during the ordinary course of business. The Company recognises liabilities for
expected tax issues based on estimates of whether additional taxes will be due. Where the
final tax outcome of these matters is different from the amounts that were initially recognised,
such differences will impact the income tax and deferred tax provisions in the period in which
such determination is made.

The carrying amount of the deferred tax liability as at 31 December 2018 is $627,560 (2017:
$627,560).
4. Property, plant and equipment
Leasehold Furniture,
land & Plant & Leasehold fittings & Motor Workshop Construction
building machinery improvements equipment vehicles tools in progress Total
$ $ $ $ $ $ $ $
Cost
Balance at 1 January 2017 11,031,519 5,544,516 1,049,391 1,508,457 383,500 473,624 67,058 20,058,065
Additions during the year – 149,017 54,389 30,537 6,800 1,200 123,538 365,481
Reclassification – 70,930 1,200 – – – (72,130) –
Written off – (69,874) (166,244) (29,977) – (22,300) – (288,395)
Transfer to profit and loss – – – – – (30,598) (30,598)
Disposal – (48,871) (61,502) (6,851) – – – (117,224)

Balance as at 31 December 2017

and 1 January 2018 11,031,519 5,645,718 877,234 1,502,166 390,300 452,524 87,868 19,987,329
Additions – 320,367 262,292 69,158 6,800 17,210 377,905 1,053,732
Reclassification – 129,592 97,246 – – – (226,838) –
Written off – (732,325) (73,590) – – (3,410) – (809,325)
Disposal – (100,000) – – (35,700) – – (135,700)

Balance as at 31 December 2018 11,031,519 5,263,352 1,163,182 1,571,324 361,400 466,324 238,935 20,096,036

Accumulated depreciation
Balance at 1 January 2017 3,351,122 4,479,068 282,795 787,886 351,534 342,665 – 9,595,070
Charge for the year 366,858 314,444 179,790 198,957 14,713 39,281 – 1,114,043
Written off – (54,217) (28,232) (26,540) – (9,663) – (118,652)
Disposal – (4,073) (13,754) (2,741) – – – (20,568)

Balance as at 31 December 2017

and 1 January 2018 3,717,980 4,735,222 420,599 957,562 366,247 372,283 – 10,569,893
Charge for the year 366,858 234,076 195,203 197,482 15,553 35,628 – 1,044,800
Written off – (732,325) (9,795) – – (3,410) – (745,530)
Disposal – (100,000) – – (34,800) – – (134,800)

Balance as at 31 December 2018 4,084,838 4,136,973 606,007 1,155,044 347,000 404,501 – 10,734,363

Net carrying value

At 31 December 2018 6,946,681 1,126,379 557,175 416,280 14,400 61,823 238,935 9,361,673

At 31 December 2017 7,313,539 910,496 456,635 544,604 24,053 80,241 87,868 9,417,436
4. Property, plant and equipment (cont’d)

Assets pledged as security

Leasehold land and building with a net carrying amount of $6,814,687 (2017: $7,534,461)
are subject to charges to secure the holding company’s bank loans.

Depreciation

The depreciation for the year of $1,044,800 (2017: $1,114,043) consists of $518,940 (2017:
$595,753) charged to “cost of sales” and $525,860 (2017: $518,290) charged to “general and
administrative expenses” in the statement of comprehensive income.

5. Intangible asset

Software

Cost
Balance as at 1 January 2017 1,966,270
Additions during the year 3,500
Written off (55,608)
Transfer to profit and loss (81,695)

Balance as at 31 December 2017 and 1 January 2018 1,832,467

Additions during the year 8,750

Balance as at 31 December 2018 1,841,217

Accumulated depreciation

Balance as at 1 January 2017 606,380

Charge for the year 381,204
Written off (19,039)
Transfer to profit and loss (43,571)

Balance as at 31 December 2017 and 1 January 2018 924,974

Charge for the year 367,519

Balance as at 31 December 2018 1,292,493

Net carrying value

As at 31 December 2018 548,724

As at 31 December 2017 907,493

Amortisation expenses

The amortisation of software is included in the “general and administrative expenses” line
item in the statement of comprehensive income.
6. Investment In subsidiaries
2018 2017
$ $

Investment in subsidiaries 5,298,699 5,298,699

Country of Proportion (%)

incorporati of ownership
Name on Principal activities interest
2018 2017
Held by the company

TES-AMM EUROPE United Investment holding company 100 100

HOLDINGS LTD 1 Kingdom
(F.K.A DATASERV GROUP
HOLDING LIMITED)

Held through subsidiary

DATASERV GROUP United Investment holding company – 100

LIMITED 1* Kingdom

DATASERV OMNICO United Investment holding company – 100

HOLDINGS LIMITED 1* Kingdom

AWARDPRAISE United Property investment – 100

LIMITED 2* Kingdom

COMPUTER EQUIPMENT United Investment holding company – 100

BROKERS LIMITED 1* Kingdom

TES-AMM UK LTD 1 United Computer disposal services 100 100

(F.K.A DATASERV LIMITED) Kingdom

DATASERV RECYCLING United Electronic equipment 100 100

LIMITED 2 Kingdom recycling services

DATASERV COMPLIANCE United Waste electrical and 100 100

SERVICES LIMITED 1 Kingdom electronic equipment
producer compliance
services

PORTABLE I.T. United Computer retail sales 100 100

LIMITED 3 Kingdom

TES-AMM DATASERV GMBH Germany Banking equipment recycling 100 100

(F.K.A RHENUS DATASERV services
GMBH) 1

OMNICO SYSTEMS & Germany Banking equipment recycling 100 100

SOLUTIONS GMBH services

TES-AMM SAS 1 France Computer disposal services 100 100

(F.K.A DATASERV SAS)
6. Investment in subsidiaries (cont’d)

Country of Proportion (%)

incorporatio of ownership
Name n Principal activities interest

Held through subsidiary (cont'd)

2018 2017
TES TOTAL Sweden Computer disposal 100 100
ENVIRONMENTAL services
SOLUTION AB 4
(F.K.A. DATASERV AB)

TEM-AMM ESPANA ASSET Spain Computer disposal 100 100

RECOVERY AND services
RECYCLING S.L. 5
(F.K.A. DATASERV ESPANA
ASSET RECOVERY AND
RECYCLING S.L.)

TES-AMM ITALIA SRL 5 Italy Electronic equipment 100 100

(F.K.A. DATASERV ITALIA recycling services
S.R.L)

VSL SUPPORT LIMITED 5** United Repairs of other equipment, –

Kingdom other information technology 100
services activities

EGR HOLDINGS LIMITED 5** United Investment holding company 100 –

Kingdom

EGR GMBH 5** Germany Investment holding company 100 –

EGR BETEILIGUNGSGES- Germany Investment holding company 100 –

ELLSCHAFT GMBH 5**

WEEE RETURN GMBH 5** Germany Banking equipment recycling 50 –

services

TES USA. INC 5 USA Computer disposal services 100 100

(F.K.A. DATASERV USA. INC)

1 Audited by BDO LLP

2 Audited by Watson & Co
3 Audited by Clifford Fry & Co
4 Audited by Vätterstadens Revisionsbyra
5 Not required to be audited by the law of its country of incorporation
* Completed their strike off process on 9 January 2018
** Newly acquired indirect subsidiaries
7. Inventories
2018 2017
$ $

Balance sheet
At lower of cost and realisable value:
Scrap materials 2,327,189 3,353,431

Statement of comprehensive income

Inventories recognised as an expense in cost of sales 31,678,172 20,497,653

8. Trade receivables

Trade receivables are non-interest bearing and are generally on 30 days’ terms. They are
recognised at their original invoice amounts which represent their fair values on initial
recognition.

Trade receivables denominated in foreign currency at 31 December are as follows:

2018 2017
$ $

United States Dollar 9,039,680 4,718,921

Receivables that are past due but not impaired

The Company has the following trade receivables that are past due at the balance sheet date
but not impaired. These receivables are unsecured and the analysis of their aging at the end
of the reporting period is as follows:

2018 2017
$ $

Trade receivables past due but not impaired:

Lesser than 30 days 3,092,082 3,484,348
30 – 60 days 684,756 352,029
61 – 90 days 880,466 480,592
More than 90 days 566,409 469,087

5,223,713 4,786,056

There are no trade receivables that are individually impaired as at 31 December 2018 and
2017. No credit risk loss recognised as amount is immaterial.
9. Other receivables and deposits
2018 2017
$ $

Expenses recoverable from suppliers 1,026,909 1,004,098

Goods and services tax recoverable 744,957 3,022,934
Deposits 164,345 59,215
Accrued sales (contract asset) 66,386 208,635
Advance payment to suppliers 715,961 194,138
Other receivables 14,423 310,201

2,732,981 4,799,221

Other receivables and deposits are denominated in Singapore Dollar, non-interest bearing
and generally on 30 days’ terms.

Accrued sales or contract assets pertains to goods already delivered but not billed.

10. Amount due to holding company

Amount due to holding company are non-trade in nature, unsecured, interest-free, repayable
on demand and are to be settled in cash.

11. Amounts due from/(to) related companies

2018 2017
$ $

Amounts due from related companies comprise:

- Trade 2,392,621 903,691
- Non-trade 4,496,151 1,164,649

6,888,772 2,068,340

Amounts due to related companies comprise:

- Trade (12,179,640) (13,776,513)
- Non-trade (131,897) (22,565)

(12,311,537) (13,799,078)

Amounts due from/(to) related companies are unsecured, non-interest bearing, repayable
upon demand and are to be settled in cash.
11. Amounts due from/(to) related companies (cont’d)

Amounts due from/(to) related companies denominated in foreign currencies at

31 December are as follows:

2018 2017
$ $
Due from:
United States Dollar 2,436,006 905,673
Japanese Yen 1,216,438 1,064,401
United Kingdom Dollar – 6,883
Euro 3,279,713 –

Due to:
Renminbi (846,094) (840,463)
United Kingdom Dollar (1,008,521) (1,041,087)
United States Dollar (5,941,866) (7,834,944)
Hong Kong Dollar (453,050) (395,842)
New Zealand Dollar (136,649) (127,743)
United Arab Emirates Dirham (33,480) (32,802)
Australian Dollar (3,317,100) (2,886,610)

12. Amounts due from/(to) related parties

2018 2017
$ $

Amounts due from related parties - non-trade 2,411,853 –

Amounts due to related parties - trade (2,502,519) (122,454)

Amounts due from/(to) related parties are unsecured, non-interest bearing, repayable upon
demand and are to be settled in cash.

Amounts due from/(to) related parties denominated in foreign currencies at 31 December are
as follows:
2018 2017
$ $
Due from:
Thai Baht 2,411,853 –

Due to:
United States Dollar (169,132) (106,909)
Thai Baht (2,333,387) (15,545)
13. Cash and cash equivalents

2018 2017
$ $

Cash at banks and on hand 16,430,871 6,020,700

Short-term deposits 1,165,852 1,154,828

Cash and short-term deposits 17,596,723 7,175,528

Cash at banks earns interest at floating rates based on daily bank deposit rates. Short-term
deposits are made for period of one month and earn interest at the rate of 1.14% (2017:
1.14%) per annum.

Cash and cash equivalents denominated in foreign currencies at 31 December are as

follows:

2018 2017
$ $

United States Dollar 14,100,619 1,280,186

Euro – 811,325
British Pound 778,455 –

14. Trade payables

Trade payables are non-interest bearing and normally settled on 30-day terms.

Trade payables denominated in foreign currencies as at 31 December are as follows:

2018 2017
$ $

United States Dollar 3,635,045 20,074

15. Other payables and accruals

2018 2017
$ $

Accruals 9,499,756 4,300,442

Payroll related accruals 517,984 532,164
Other payables 6,218,116 5,882,386

16,235,856 10,714,992

Other payables are non-interest-bearing and are normally settled on 30-day terms.

Other payables include accrual amounting to $4,096,122 (2017: $4,013,915) for services
associated with a customer project cost.
 15. Other payables and accruals (cont’d)

Other payables denominated in foreign currency as at 31 December are as follows:

2018 2017
$ $

United States Dollar 4,096,122 4,013,915

16. Deferred tax liability

2018 2017
$ $

Accelerated tax depreciation 627,560 627,560

Unrecognised tax losses

At the balance sheet date, the Company has tax losses of approximately $3,835,781 (2017:
$13,335,000) that are available for offset against future taxable profits of the Company in
which the losses arose, for which no deferred tax asset is recognised due to uncertainty of its
recoverability. The use of these tax losses is subject to the agreement of the tax authorities
and compliance with certain provisions of the tax legislation of the country in which the
Company operate.

17. Share capital

No. of $
shares

Balance at 1 January 2017 2,045,584 3,060,000

Issuance of shares during the year 17,864 415,405

Balance at 31 December 2017 and 1 January 2018 2,063,448 3,475,405

Issuance of shares during the year 17,864 415,405

Balance at 31 December 2018 2,081,312 3,890,810

The holder of ordinary shares are entitled to receive dividends as and when declared by the
Company. All shares carry one vote per share without restrictions. The ordinary shares have
no par value.

In connection with the acquisition of Dataserv, the Company had issued 17,864 ordinary
share with a fair value of $415,405 (i.e $23.25 per share)
18. Other Reserves

Pertains to the contingent consideration shares issued as part of the acquisition of Dataserv.

2018 2017
$ $

Balance at 1 January 830,810 2,492,432

Write back of contingent consideration issued (415,405) (1,661,622)

Balance at 31 December 415,405 830,810

19. Revenue

This pertains to the sale of goods and rendering of services.

(a) Disaggregation of revenue

2018 2017
$ $

Sale of goods
Recycling of electronic parts 37,690,877 28,344,435
Information technology asset disposal 7,818,418 4,025,647

Total sale of goods recognised at a point in time 45,509,295 32,370,082

Sale of services
Recycling of electronic parts 18,955,174 9,777,677
Information technology asset disposal 1,792,177 1,378,312

Total sale of services overtime 20,747,351 11,155,989

Total sale of goods and services 66,256,646 43,526,071

The Company is in a business of sale of recycled electronic parts and provision of recycling
services.

The Company has minimal contract assets or goods already delivered but not billed and no
contract liability or advances received from customers for sale of goods or services.
20. Profit before taxation

Profit before taxation has been determined after charging/(crediting) the following items:

2018 2017
$ $

Exchange gain, net (211,205) (662,010)

Write-back of provision no longer required – (1,649,356)
Staff costs:
Central Provident Fund 882,909 820,179
Other staff costs 14,140,116 13,184,789
Depreciation of property, plant and equipment 1,044,800 1,114,043
Amortisation of intangible asset 367,519 381,204
Director’s remuneration 298,780 280,520
Leasehold land and building, equipment, office and factory
rental under operating leases 843,445 1,676,828
Interest expense 801,381 561,647
Written off property, plant and equipment 63,795 169,743
Written off intangible assets – 36,569
(Gain)/loss on disposal of property, plant and equipment (12,300) 76,656

21. Taxation (credit)/expense

Major components of income tax expense

The major components of income tax credit for the years ended 31 December 2018 and 2017
are:
2018 2017
$ $

Current income tax:

- Under/(over) provision in respect of prior years 8,500 (2,630)

8,500 (2,630)
21. Taxation (credit)/ expense (cont’d)

Relationship between tax expense and accounting profit/(loss)

The reconciliation between income tax expense and the product of accounting profit/(loss)
multiplied by the applicable corporate tax rate for the years ended 31 December 2018 and
2017 are as follows:

2018 2017
$ $

Profit before taxation 8,825,108 1,471,361

Income tax expense/(credit) at statutory rate of 17%

(2017: 17%) 1,500,268 250,131
Add/(less):
Income not subject to taxation 72,113 (125,566)
Exempt income (25,925) (25,925)
Non-deductible expenses 38,167 201,901
Benefits from previously unrecognised deferred tax assets (1,584,623) (300,541)
Over/(under)provision in respect of previous years 8,500 (2,630)

Total income tax expense (credit) at effective rate 8,500 (2,630)

22. Commitments

Operating lease commitments – as lessee

The Company entered into leases for its leasehold land and the use of equipment as lessee.
These leases have an average life of between 1 and 30 years with no renewal option or
escalation clauses included in the contracts. There are no restrictions placed upon the
Company by entering into these leases. Operating lease payments recognised in the
statement of comprehensive income during the year amount to $843,445
(2017: $1,676,828).

Future minimum lease payments payable under non-cancellable operating leases as at

31 December are as follows:
2018 2017
$ $

Not later than one year 452,414 744,542

Later than one year but not later than five years 1,277,296 1,126,136
Later than 5 years 3,918,014 4,481,082

5,647,724 6,351,760
23. Contingent liabilities

As at the balance sheet date, the Company has an outstanding banker's guarantee
amounting to $200,000 issued in favour of National Environmental Agency to cover
contingent liabilities under the regulation of the Hazardous Waste Act and its Regulations
and the 1989 Basel Convention on the Control of Transboundary Movement of Hazardous
Waste and their Disposal.

24. Significant related party transactions

Sale and purchase of goods and services and payment on behalf

In addition to those related party information disclosed elsewhere in the financial statement,
the following significant transactions are entered into by the Company with its holding
company and related companies during the year at terms agreed between the parties during
the financial year:
2018 2017
$ $
Sale of goods
Related companies 1,652,919 1,156,379
An associated company of the holding company 18,410 88,517
Purchase -
Related companies 7,849,504 10,456,026
Associated companies of holding company 2,851,497 2,948,948
Rendering of service by related companies 1,839,284 3,812,161
Rendering of service by associated companies of
holding company 225,802 261,530
Payment on behalf by related companies 1,063,815 1,672,989
Payment on behalf by associated companies of holding
company 91,606 63,414

Related companies

These are subsidiaries and associates of TES-Envirocorp Pte Ltd.

Remuneration of Director who is also the key management personnel total $298,780
(2017: $280,520).
25. Financial risk management objective and policies

The Company is exposed to financial risks arising from its operations and the use of financial
instruments. The key financial risks include interest rate risk, credit risk, liquidity risk and
foreign currency risk. The Director reviews and agrees to policies and procedures for the
management of these risks. The Company does not apply hedge accounting.

The following sections provide details regarding the Company’s exposure to the
above-mentioned financial risks and the objectives, policies and processes for the
management of these risks.

There has been no change to the Company’s exposure to these financial risks or the manner
in which it manages and measures the risks.

(a) Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of the Company’s
financial instruments will fluctuate because of changes in market interest rates. The
Company’s policy is to obtain the most favourable interest rates available. The
Company exposure to interest rate risk arises primarily from the loans and
borrowings to the bank, through it holding company.

Sensitivity analysis for interest rate risk

At the end of the reporting period, if SGD interest rates had been 75 (2017: 75) basis
points lower/higher with all other variables held constant, the Company’s profit net of
tax would have been $137,600 (2017: $137,600) higher/lower, arising mainly as a
result of lower/higher interest expense on floating rate loans and borrowings.

(b) Credit risk

Credit risk is the risk of loss that may arise on outstanding financial instruments
should a counterparty default on its obligations. The Company’s exposure to credit
risk arises primarily from trade and other receivables. For other financial assets
(including cash and cash equivalents), the Company minimise credit risk by dealing
exclusively with high credit rating counterparties.

The Company’s objective is to seek continual revenue growth while minimising

losses incurred due to increased credit risk exposure. The Company trades only with
recognised and creditworthy third parties. It is the Company’s policy that all
customers who wish to trade on credit terms are subject to credit verification
procedures. In addition, receivable balances are monitored on an ongoing basis with
the result that the Company’s exposure to bad debts is not significant.

The Company considers the probability of default upon initial recognition of asset
and whether there has been a significant increase in credit risk on an ongoing basis
throughout each reporting period.

The Company determined that its financial assets are credit-impaired when:

 There is significant difficulty of the issuer or the borrower

 A breach of contract, such as a default or past due event
 It is becoming probable that the borrower will enter bankruptcy or other financial
reorganisation
 There is a disappearance of an active market for that financial asset because of
financial difficulty
25. Financial risk management objective and policies

(b) Credit risk (cont'd)

Financial assets are written off when there is no reasonable expectation of recovery,
such as a debtor failing to engage in a repayment plan with the Company. Where
loans and receivables have been written off, the company continues to engage
enforcement activity to attempt to recover the receivable due. Where recoveries are
made, these are recognised in profit or loss.

Exposure to credit risk

At the balance sheet date, the Company’s maximum exposure to credit risk is
represented by the carrying amount of each class of financial assets recognised in
the balance sheet.

Credit risk concentration profile

The Company determines concentrations of credit risk by monitoring the country

profile of its trade receivables on an ongoing basis. The credit risk concentration
profile of the Company’s trade receivables at the balance sheet date is as follows:

2018 2017
$ % of total $ % of total

By country:
Singapore 3,077,704 29 2,901,208 40
Other countries 7,505,174 71 4,267,892 60

10,582,878 100 7,169,100 100

At the balance sheet date, approximately 59% (2017: 34%) of the Company’s trade
receivables were due from 1 major customer.

Financial assets that are neither past due nor impaired

Trade receivables that are neither past due nor impaired are creditworthy debtors
with good payment record with the Company. Cash and short-term deposits are
placed with or entered into with reputable financial institutions.

Financial assets that are either past due or impaired

Information regarding financial assets that are either past due or impaired is
disclosed in trade receivables (Note 8).
25. Financial risk management objective and policies (cont’d)

(c) Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting financial
obligations due to shortage of funds. The Company’s exposure to liquidity risk arises
primarily from mismatches of the maturities of financial assets and liabilities. The
Company’s objective is to maintain a balance between continuity of funding and
flexibility through the use of stand-by credit facilities.

To manage liquidity risk, the Company monitors its net operating cash flows,
maintains a level of cash and cash equivalents and secured trading facilities from
financial institutions. Short-term funding is obtained through bank overdrafts and
short-term facilities.

The table below summarises the maturity profile of the Company’s financial
assets/liabilities at the balance sheet date based on contractual undiscounted
repayment obligations.

2018 2017
One year One year
or less or less
$ $
Financial assets:
Trade receivables 10,582,878 7,169,100
Other receivables and deposits 2,732,981 4,799,221
Amounts due from related companies 6,888,772 2,068,340
Amounts due from related parties 2,411,853 –
Cash and cash equivalents 17,596,723 7,175,528

Total undiscounted financial assets 40,213,207 21,212,189

Financial liabilities:
Trade payables 4,038,994 255,374
Other payables and accruals 16,235,856 10,714,992
Dividends payable 9,574,035 –
Amounts due to related companies 12,311,537 13,799,078
Amounts due to related parties 2,502,519 122,454
Amount due to holding company 7,284,136 8,564,824

Total undiscounted financial liabilities 51,947,077 33,456,722

Total net undiscounted financial liabilities (11,733,870) (12,244,533)

25. Financial risk management objective and policies (cont’d)

(d) Foreign currency risk

The Company has transactional currency exposures which arise from sales or
purchases that are denominated in currencies other than its functional currency. The
foreign currencies in which these transactions are denominated are mainly United
States Dollar (USD). Such exposures are kept to an acceptable level by using
natural hedges arising from matching assets and liabilities, or sale and purchase in
the same currencies, and monitoring to ensure the exposure is minimised.

Sensitivity analysis for foreign currency risk

If the USD, Hong Kong Dollars (“HKD”), Pound Sterling (“GBP”), Australian Dollar
(“AUD”) and Japanese Yen (“JPY”) change against the functional currency of the
Company as at 31 December 2018 by 5% with all other variables including tax rate
being held constant, the effects on profit after tax and equity would be

2018 2017
Increase/(Decrease)
Profit after tax Profit after tax
$ $

USD against SGD

- strengthened 772,100 (229,151)
- weakened (772,100) 229,151

HKD against SGD

- strengthened (21,324) (18,400)
- weakened 21,324 18,400

GBP against SGD

- strengthened (11,503) (52,398)
- weakened 11,503 52,398

AUD against SGD

- strengthened (64,865) (141,727)
- weakened 64,865 141,727

JPY against SGD

- strengthened 63,387 56,733
- weakened (63,387) (56,733)
26. Fair value of financial instruments

(a) Fair value of financial instruments that are carried at fair value

Fair value hierarchy

The Company categorises fair value measurement using a fair value hierarchy that
is dependent on valuation inputs used as follows:

 Level 1 – Quoted prices (unadjusted) in active markets for identical assets or

liabilities that the Company ran access at the measurement date,

 Level 2 – Inputs other than quoted prices included within Level 1 that are
observable for the asset or liability, either directly or indirectly, and

 Level 3 – Unobservable inputs for the asset or liability.

There have been no transfers between fair value measurement levels during the
financial years ended 31 December 2018 and 2017.

Determination of fair value

At the end of the reporting period, the Company does not have any financial
instruments carried at fair value.

(b) Fair value of financial instruments by classes that are not carried at fair value
and whose carrying amounts are reasonable approximation of fair value

Trade receivables, other receivables, amounts due from/(to) holding company,

amounts due from/(to) related companies, amount due from/(to) related parties,
trade payables, other payables and accruals.

The carrying amounts of these financial assets and liabilities are reasonable
approximation of fair values due to their short-term nature.

(c) Fair value of financial instruments by classes that are not carried at fair value
and whose carrying amounts are not reasonable approximation of fair value

At the end of the reporting period, the Company does not have any financial
instruments that are not carried at fair value and whose carrying amounts are not
reasonable approximation of fair value.
27. Categories of financial assets and liabilities

(b) Financial assets measured at amortised cost

2018 2017
$ $

Trade receivables 10,582,878 7,169,100

Other receivables and deposits 1,272,063 1,582,149
Amounts due from related companies 6,888,772 2,068,340
Amounts due from related parties 2,411,853 –
Cash and cash equivalents 17,596,723 7,175,528

Total financial assets measured at amortised

cost 38,752,289 17,995,117

Other receivables and deposits exclude GST receivables and advance payment to
suppliers.

(b) Financial liabilities measured at amortised cost

2018 2017
$ $

Trade payables 4,038,994 255,374

Other payables and accruals 16,235,856 10,714,992
Dividends payable 9,574,035 –
Amount due to holding company 7,284,136 8,564,824
Amount due to related companies 12,311,537 13,799,078
Amount due to related parties 2,502,519 122,454

Total financial liabilities measured at

amortised cost 51,947,077 33,456,722

28. Capital management

The primary objective of the Company’s capital management is to ensure that it maintains a
strong credit rating and healthy capital ratios in order to support its business and maximise
shareholder value.

The Company manages its capital structure and makes adjustments to it, in light of changes
in economic conditions. To maintain or adjust the capital structure, the Company may adjust
the dividend payment to shareholders, return capital to shareholders or issue new shares. No
changes were made in the objectives, policies or processes during the years ended 31
December 2018 and 2017.
29. Events occurring after the reporting period

On 1 March 2019, the subsidiary company, TES-AMM Europe Holdings Ltd acquired 60%
share of Technology Supplies International Ltd and 60% share of Stock Must Go Limited.

30. Authorisation of financial statements of issue

The financial statements for the year ended 31 December 2018 were authorised for issue in
accordance with a resolution of the director on 4 April 2019.