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DYNA-MAC HOLDINGS LTD.
2016 ANNUAL REPORT
67
Performance At A Glance
Financial Report
Corporate Governance and Transparency
Sustainable Growth
Year in Review
NOTES TO THE
FINANCIAL STATEMENTS
For the financial year ended 31 December 2016
These notes form an integral part of and should be read in conjunction with the accompanying financial statements.
1.
GENERAL INFORMATION
Dyna-Mac Holdings Ltd. (the “Company”) is listed on the Main Board of the Singapore Exchange Securities
Trading Limited (“SGX-ST”) and is incorporated and domiciled in Singapore. The address of its registered
office is at 59 Gul Road, Singapore 629354 and the principal place of business is at 45 Gul Road,
Singapore 629350.
The consolidated financial statements relate to the Company and its subsidiaries (collectively, the “Group”).
The principal activity of the Company is that of investment holding. The principal activities of the subsidiaries
are set out in Note 36 to the financial statements.
2.
SIGNIFICANT ACCOUNTING POLICIES
2.1
Basis of preparation
These financial statements have been prepared in accordance with Singapore Financial Reporting Standards
(“FRS”). The financial statements have been prepared under the historical cost convention, except as
disclosed in the accounting policies below.
The preparation of financial statements in conformity with FRS requires management to exercise judgement
in applying the Group’s accounting policies. It also requires the use of accounting estimates and assumptions.
The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates
are significant to the financial statements, are disclosed in Note 3.
Going concern assumption
The Group has recognised a net loss of S$15,665,000 for the year ended 31 December 2016 (2015: loss of
S$5,183,000). The loss was determined after recording S$11,312,000 in write-off of certain long outstanding
debts, S$5,556,000 of impairment of goodwill relating to the operations in China and S$11,128,000 of
impairment of property, plant and equipment.
The downturn in the oil and gas industry has resulted in reduced global exploration and production
expenditure by oil and gas companies. Oil field exploration projects have also had their commencement
delayed or been cancelled, and correspondingly the demand for the fabrication of topside modules by the
Group for floating production storage offloading (“FPSO”) and floating storage offloading (“FSO”) vessels
has also reduced. Management has observed that the contracts available for tender relevant to the Group,
are of lower award value and with lower margins as compared with previous years. At 31 December 2016, the
Group has a net order book of S$12,800,000 (2015: S$175,300,000). The low order books and the uncertainty
over the availability and timing of award of new contracts indicate the existence of a material uncertainty
which may cast significant doubt on the ability of the Group to generate sufficient operating cash flows and
continue as a going concern.