3. Risk Factors
The Group’s primary business risk is in its IT business. In the area of IT business, the Group is subject to risk of
reliance on a few key vendors, with respect to their channel strategies, as well as product roadmap. The Group is
also exposed to the risks of product obsolescence with respect to the hardware carried. To mitigate such risk, the
Group has taken steps to align with the leading names in the IT arena. The Group monitors its inventories on a
quarterly basis and will make allowances where necessary.
The Group is also exposed to foreign exchange risks as we transact with our suppliers, vendors and customers in
Singapore dollar, US dollar, Chinese renminbi, Australian dollar, Thailand baht, Malaysian ringgit, Indian rupee,
Indonesian rupiah, Taiwan dollar, Hong Kong dollar, Philippines peso, and to a lesser extent, Euro, Korean won,
Japanese yen, Vietnam dong, New Zealand dollar, British Pound and Sri Lankan rupee. The Group may, from
time to time, enter into borrowing and foreign currency arrangements to reduce its foreign currency exposure. With
any volatility in the US dollar, the Group expects to be exposed to a higher foreign exchange risk against some of
the local currencies we collect from the customers.
The Group is also exposed to the political, legal and economic climates of the country in which the Group is
operating. Economic and political conditions are still key factors in determining the level of IT spending
1.5 CASH FLOW ANALYSIS
Net cash of $12.1m was generated from operating activities in 12M2022, as compared to net cash of $26.9m
generated in 12M2021. This was mainly due to lower profit before income tax and increase in inventories, trade
and other receivables owing to higher business volume, net of increase in trade and other payables, and contract
liabilities.
Net cash of $939,000 was used in investing activities in 12M2022, as compared to $896,000 used in investing
activities in 12M2021. The change was mainly due to purchase of plant and equipment of $856,000 and
purchase of club memberships of $296,000, net of proceeds from disposal of plant and equipment of $213,000 in
12M2022, as compared to purchase of plant and equipment of $737,000 and additions to right-of-use assets of
$428,000, net of proceeds from disposal of plant and equipment of $269,000 in 12M2021.
Net cash of $14.5m was used in financing activities in 12M2022, as compared to net cash of $20.1m used in
financing activities in 12M2021. This was mainly due to repayment of bank borrowings of $5.5m, payment of
dividend of $12.2m and repayment of lease liabilities of $1.3m, net of proceeds from bank borrowings of $4.9m in
12M2022, as compared to net cash outflow from acquisition of interest in a subsidiary of $15.9m, repayment of
bank borrowings of $10.5m, payment of dividend of $9.7m and repayment of lease liabilities of $1.3m, net of lift in
fixed deposits pledged of $9.9m and proceeds from bank borrowings of $7.7m in 12M2021.
Cash and cash equivalents stood at $69.5m as at end of 31 December 2022, down from $74.4m as at end of 31
December 2021
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