SEC Form 20-F filed by Primech Holdings Ltd.

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 20-F

☐ REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934

OR

☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended March 31, 2024

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

OR

☐ SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Date of event requiring this shell company report

For the transition period from                   to                

Commission file number: 001-41829

PRIMECH HOLDINGS LTD.

(Exact name of Registrant as specified in its charter)

N/A

(Translation of Registrant’s name into English)

Singapore

(Jurisdiction of incorporation or organization)

23 Ubi Crescent
Singapore 408579
+65 6286 1868

(Address of principal executive offices)

Mr. Kin Wai Ho, Chief Executive Officer

Telephone: +65 6286 1868

At the address of the Company set forth above

(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)

Securities registered or to be registered pursuant to Section 12(b) of the Act.

Securities registered or to be registered pursuant to Section 12(g) of the Act.

None

(Title of Class)

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act.

None

(Title of Class)

Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report.

An aggregate of 35,550,000 ordinary shares, no par value, as of March 31, 2024.

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes ☐ No ☒

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.

Yes ☐ No ☒

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth company. See definition of “large accelerated filer,” “accelerated filer,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D 1(b). ☐

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:  

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

TABLE OF CONTENTS

INTRODUCTION

In this annual report on Form 20-F (the “Annual Report”), unless the context otherwise requires, references to:

Other Companies, Organizations and Agencies

General

Currencies, Units and Others

The expressions “associated company”, “related corporation” and “subsidiary” shall have the respective meanings ascribed to them in the Companies Act, as the case may be.

Any discrepancies in tables included herein between the total sum of amounts listed and the totals thereof are due to rounding. Accordingly, figures shown as totals in certain tables may not be an arithmetic aggregation of the figures that precede them.

In this Annual Report, references to “our Company” or to “the Company” are to Primech Holdings Ltd. and, unless the context otherwise requires, a reference to “we”, “our”, “us” or “our Group” or their other grammatical variations is a reference to our Company and our subsidiaries taken as a whole.

Certain of our customers and suppliers are referred to in this Annual Report by their trade names. Our contracts with these customers and suppliers are typically with an entity or entities in the relevant customer or supplier’s group of companies.

Internet site addresses in this Annual Report are included for reference only and the information contained in any website, including our website, is not incorporated by reference into, and does not form part of, this Annual Report.

This annual report on Form 20-F includes our audited consolidated financial statements for the fiscal years ended March 31, 2024 and 2023. In this annual report, we refer to assets, obligations, commitments, and liabilities in our consolidated financial statements in United States dollars.

Our business is conducted by our indirect wholly-owned entities in Singapore and Malaysia, using S$ and RM, the currency of Singapore and Malaysia, respectively. Our audited consolidated financial statements are presented in United States dollars. In this annual report, we refer to assets, obligations, commitments and liabilities in our audited consolidated financial statements in United States dollars. These dollar references are based on the exchange rate of S$ and RM to United States dollars, determined as of a specific date or for a specific period. Changes in the exchange rate will affect the amount of our obligations and the value of our assets in terms of United States dollars which may result in an increase or decrease in the amount of our obligations (expressed in dollars) and the value of our assets, including accounts receivable (expressed in dollars).  

This annual report contains translations of certain S$ and RM   amounts into US$ amounts at specified rates solely for the convenience of the reader. Unless otherwise stated, the following exchange rates are used in this annual report: 

FORWARD-LOOKING STATEMENTS AND RISK FACTORS SUMMARY

This annual report on Form 20-F contains forward-looking statements that reflect our current expectations and views of future events. Known and unknown risks, uncertainties and other factors, including those listed under “Item 3. Key Information—D. Risk Factors”, may cause our actual results, performance or achievements to be materially different from those expressed or implied by the forward-looking statements.

In some cases, you can identify these forward-looking statements by words or phrases such as “may,” “will,” “expect,” “anticipate,” “aim,” “estimate,” “intend,” “plan,” “believe,” “likely to” or other similar expressions. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy and financial needs. These forward-looking statements include statements about:

These factors are not necessarily all of the important factors that could cause actual results or events to differ materially from those expressed in forward-looking statements. Other unknown or unpredictable factors could also cause actual results or events to differ materially from those expressed in the forward-looking statements. Our future results will depend upon various other risks and uncertainties, including those described in “Risk Factors.” All forward-looking statements attributable to us are qualified in their entirety by this cautionary statement. Forward-looking statements speak only as of the date hereof. We undertake no obligation to update or revise any forward-looking statements after the date on which any such statement is made, whether as a result of new information, future events or otherwise.

You should read this annual report and the documents that we refer to in this annual report and have filed as exhibits to this annual report completely and with the understanding that our actual future results may be materially different from what we expect. Other sections of this annual report discuss factors which could adversely impact our business and financial performance. Moreover, we operate in an evolving environment. New risk factors emerge from time to time and it is not possible for our management to predict all risk factors, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. We qualify all of our forward-looking statements by these cautionary statements.

You should not rely upon forward-looking statements as predictions of future events. The forward-looking statements made in this annual report relate only to events or information as of the date on which the statements are made in this annual report. Except as required by law, we undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, after the date on which the statements are made or to reflect the occurrence of unanticipated events.

Item 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS

Not Applicable.

Item 2. OFFER STATISTICS AND EXPECTED TIMETABLE

Not Applicable.

Item 3. KEY INFORMATION

A. [Reserved]

B. Capitalization and Indebtedness

Not applicable.

C. Reasons for the Offer and Use of Proceeds

Not applicable.

D. Risk Factors

Risks Relating to Our Business

We incurred a net loss in FY 2023 and FY 2024 and we may incur losses in the future.

For the years ended March 31, 2024 and 2023, the Company recorded net loss of approximately $3,223,000 and $2,547,000, respectively. We anticipate that our operating expenses, together with the increased general administrative expenses of a public company, will increase in the foreseeable future as we seek to maintain and continue to grow our business, attract potential customers and further enhance our service offering. These efforts may prove more expensive than we currently anticipate, and we may not succeed in increasing our revenue sufficiently to offset these higher expenses. As a result of the foregoing and other factors, we may incur net losses in the future and may be unable to achieve or maintain profitability on a quarterly or annual basis for the foreseeable future.

We are subject to risks associated with debt financing.

Due to our working capital requirements in support of our day-to-day operations and business expansion, we may finance all or a substantial portion of our costs through bank loans and credit facilities, in addition to Shareholders’ equity and internally generated funds. Details on our total indebtedness is set forth in the section titled “Item 5. Operating And Financial Review And Prospects - A. Operating Results” of this Annual Report.

While we believe that we have sufficient capital from our available cash resources, our cash generated from our business operations and our credit facilities to meet our current working capital and capital expenditure requirements, we may require additional debt financing to operate our business, implement our future business strategies and/or acquire complementary businesses or develop new technologies.

Our ability to obtain debt financing depends on a number of factors including our financial strength, creditworthiness and prospects, as well as other factors beyond our control, including general economic, liquidity and political conditions. There is no assurance that we will be able to secure adequate debt financing on terms acceptable to us, or at all. In the event that we are unable to secure adequate debt financing on terms acceptable to us, we may not be able to implement our business strategies and our business and prospects could be materially and adversely affected as a result.

Any disruptions, volatility or uncertainty of the credit markets could limit our ability to borrow funds or cause our borrowings to become more expensive. As such, we may be forced to pay unattractive interest rates, thereby increasing our interest expense, decreasing our profitability and reducing our financial flexibility if we take on additional debt financing. Any material increase in interest rates would also increase our cost of borrowing and debt financing costs, which may weaken our ability to obtain further future debt financing.

Further, debt financing may restrict our freedom to operate our business as it may require conditions and/or covenants that:

Any adverse material changes to the Singapore market (whether localized or resulting from global economic or other conditions) such as the occurrence of an economic recession, pandemic or widespread outbreak of an infectious disease (such as COVID-19), could have a material adverse effect on our business, results of operations and financial condition.   

During FY 2024 and FY 2023, substantially all of our revenue was derived from our operations in Singapore. Any adverse circumstances affecting the Singapore market, such as an economic recession, epidemic outbreak or natural disaster or other adverse incidents may adversely affect our business, financial condition, results of operations and prospects. Any downturn in the industry which we operate in resulting in the postponement, delay or cancellation of contracts and delay in recovery of receivables is likely to have an adverse impact on our business and profitability.

Uncertain global economic conditions have had and may continue to have an adverse impact on our business in the form of lower net sales due to weakened demand, unfavorable changes in product price/mix, or lower profit margins. For example, global economic downturns have adversely impacted some of our customers, such as Singapore Changi Airport, hotels, restaurants, retail establishments, and other entities that are particularly sensitive to business and consumer spending.

During economic downturns or recessions, there can be a heightened competition for sales and increased pressure to reduce selling prices as our customers may reduce their demand for our services. If we lose significant sales volume or reduce selling prices significantly, then there could be a negative impact on our consolidated financial condition or results of operations, profitability and cash flows.

Reduced availability of credit may also adversely affect the ability of some of our customers and suppliers to obtain funds for operations and capital expenditures. This could negatively impact our ability to obtain necessary supplies as well as our sales of materials and equipment to affected customers. This could additionally result in reduced or delayed collections of outstanding accounts receivable.

An epidemic or outbreak of communicable diseases may also adversely affect our business, financial condition, results of operations and prospects. For example, the outbreak of COVID-19 resulted in a global health crisis, causing disruptions to social and economic activities, business operations and supply chains worldwide, including in Singapore. Measures taken by the Singapore government to tackle the spread of COVID-19 have included, among others, border closures, quarantine measures and lockdown measures. The COVID-19 outbreak and related government measures had adversely affected our business in a number of ways, including:

If a substantial number of our employees are infected with and/or are suspected of having COVID-19, and our employees are required to be hospitalized, this may disrupt our ability to render services which may have a material adverse effect on our business operations and reputation of our Group.

Singapore removed most remaining COVID-19 travel restrictions as of April 26, 2022, and eased its entry requirements for travelers, in response to a decline in new daily infections. As of the date of this Annual Report, Singapore Changi Airport has fully reopened. Our contract with Changi Airport Group was renewed with effective on November 1, 2023 through October 31, 2025. Our other contract with Changi Airport Group for the airside is effective on November 1, 2023 through October 31, 2026.

Our revenue and profitability may be materially impacted if COVID-19 (or any health epidemic or virus outbreak) affects or continues to affect the overall economic and market conditions in Singapore for a prolonged period of time. Such an economic slowdown and/or negative business sentiment could potentially have an adverse impact on our business and operations. We are uncertain as to when the outbreak of COVID-19 will be fully contained, and we also cannot predict if the impact of an outbreak will be short-lived or long-lasting or when the Singapore market will be able to fully recover to pre-COVID-19 levels. If these disruptions are for a prolonged period of time, or if there are further outbreaks of infectious diseases, these may have a material adverse effect on our Group’s business, financial condition, results of operations, and prospects.

The Clean Mark Gold Award currently awarded to Primech A&P may be revoked and the class 1 licence currently awarded to Primech A&P may be revoked and/or not be renewed in May 2026.   

Primech A&P and Maint-Kleen are 2022 and 2023 recipients of the Clean Mark Gold Award,. The Clean Mark Gold Award is the highest level of accreditation under the Enhanced Clean Mark Accreditation Scheme granted to cleaning businesses. See “Item 4. Information on the Company — B. Business Overview— Awards and Accreditation.” With implementation of the revised Cleaning Business Licensing framework from 1 January 2024, NEA will cease issuance and applications of Enhanced Clean Mark Accreditation Scheme, including the Clean Mark Gold Award. Primech A&P has applied for and obtained a class 1 licence under the revised Cleaning Business Licensing framework on March 28, 2024.

As further set forth in “Item 4. Information on the Company — B. Business Overview— Legal Proceedings,” a 2019 workplace accident may result in a court conviction by A&P Maintenance. In 2020, A&P Maintenance and Primech Services & Engrg Pte. Ltd. amalgamated to form Primech A&P. Thus, a conviction (for offences under legislation administered by MOM) would have to be disclosed to NEA in connection with Primech A&P’s Clean Mark Gold Award and subsequent application for a renewal of its class 1 licence under the revised Cleaning Business Licensing framework. We have been advised by the solicitors to A&P Maintenance in connection with the 2019 workplace accident that this technicality will not in and of itself result in Primech A&P’s Clean Mark Gold Award being revoked prior to expiry, but we cannot assure you that this unfortunate accident will not cause Primech A&P’s Clean Mark Gold Award and/or class 1 license to be revoked prior to its expiry, or will not cause Primech A&P to fail in renewing its class 1 license when it expires in May 2026. Revocation of the Clean Mark Gold Award and/or the non-renewal or revocation of the class 1 licence could result in a breach of existing cleaning contracts, and/or disqualify Primech A&P from entering into or tendering for certain future cleaning contracts, which in turn could have a material adverse effect on our business and results of operations in the future.

Our Group does not have a long operating history as an integrated group.

Our Company was incorporated as a holding company on December 29, 2020; and starting in 2018 our Major Shareholder, Sapphire Universe acquired Primech Services & Engrg, A&P Maintenance, Acteef Cleaning, Maint-Kleen, and we acquired CSG and Princeston International in 2021. While our subsidiaries have been in operation between approximately two and thirty years, we do not have a long history of running an integrated group with standardized policies and procedures and on which our past performance may be judged.

There is no assurance that our future expansion and other growth plans will be successful.

As part of our future plans, we intend to expand our current facilities services into specialized services, or provide additional services such as landscaping and security services. We may expand our range of services organically, or inorganically through franchising, joint ventures, acquisitions and/or strategic alliances.

As such, we may be subject to risks related to the expansion of our Group such as, among others:

We may also enter into new geographic markets, depending on the demand for our services as well as opportunities for growth. See section titled “Item 4. Information on the Company — B. Business Overview — Our Business Strategies and Future Plans” for further details. Overseas expansion involves numerous risks, including but not limited to legal and regulatory risks and financial costs. We cannot assure you that our operations in new geographic markets will be profitable. In addition to the above, geographic expansion will require substantial management dedication and efforts which may require significant additional expenditures. The successful implementation of our growth strategies depends on a variety of factors including our ability to hire and retain key management personnel, negotiate attractive terms for such acquisitions or expansions that may command high valuations, and obtain sufficient financing for our capital expenditures. There is no assurance that we will be able to obtain the required financing or that we will continue to have sufficient cash flow to fund our Group’s expansion. The abovementioned challenges associated with our growth plans may place increased demands on our management and on our operational systems and other resources, and could also increase our exposure to unanticipated risks and liabilities.

As such, there is no assurance that our Group will be successful in implementing our future plans or that we will be able to realize the profits, growth, or synergies expected from our Group’s expansion. In the event that we are unable to effectively or successfully execute our expansion strategies, our business, financial condition, results of operations and prospects may be materially and adversely affected.

There is no assurance that our existing service contracts for facilities services will be renewed upon expiry or that we will be successful in securing new service contracts.

We derive the majority of our revenue from the provision of facilities services, which accounted for 77.2% of our revenue in FY 2024 and 80.8% of our revenue in FY 2023.   

To the extent that the demand for our facilities services, particularly in Singapore, is adversely affected for any reasons, our business, financial condition and results of operations could be materially and adversely affected.

For facilities services, our service contracts with our customers are typically for a term of two to four years and may provide for an option to renew or extend for an additional term (typically two years). There is no assurance that our existing service contracts will be renewed or extended by our customers on the exact same terms, or at all. In order to secure facilities services contracts, we typically have to participate in a tender process, or provide quotes for our services. This is a competitive process for which our customers take into account, among other things, the prior performance, financial capability, reputation, accreditations and certifications of each potential contractor before deciding which contractor to appoint. Competition for such tenders is typically high. Accordingly, there is no assurance that we will be successful in securing new facilities services contracts. To the extent we are unable to secure new facilities contracts as our existing service contracts expire, our profitability and prospects could be materially and adversely affected.

Depending on customers’ demand for our services, if less of our service is required, our customers may re-negotiate to lower the fees payable to us under their service contracts with us. Further, our facilities services contracts typically permit our customers to terminate our service without cause by providing an agreed upon prior notice. If a substantial number of our service contracts are terminated early for any reason, and we are unable to secure new service contracts in a timely manner, this could have a material adverse effect on our business, financial condition, results of operations and prospects. For example, due to the COVID-19 pandemic leading to a slowdown in the hospitality and aviation industries, most of our service contracts for stewarding services and with Singapore Changi Airport were modified to reduce the scope of our services, which led to a decrease in our revenue by $2.5 million and $3.5 million, respectively, from FY 2020 to FY 2021 and had a material adverse effect on our results of operations.

Our current strategy to expand into the installation of electric vehicle (EV) charging infrastructure is limited to participation in a pilot program and potential minority investment(s).

One of our business strategies is to expand our portfolio of services to include, among others, eco-solutions. To this end, we joined a consortium with third parties who have extensive experience in the EV charging and energy solutions sectors to submit a tender with the Singapore government to install EV charging infrastructure at various public cark parks in Singapore. The consortium was awarded the pilot tender by the government of Singapore to install EV charging infrastructure in approximately 150 public car parks in the North and North-East regions in Singapore. While we are familiar with submitting tenders to government authorities and executing government projects, we are reliant on our consortium collaborators such as Charge+ Pte. Ltd. (“Charge+”) (an EV charging solution provider in Singapore and Southeast Asia) for their experience in the EV industry. We and the other consortium members entered into agreements with the Singapore government relating to the EV project; these agreements provide that each consortium member, as a service provider, is jointly and severally responsible to the authorities for the due performance of the agreements. We subsequently entered into a Deed of Confirmation and Acknowledgement dated May 24, 2022 (the “Deed of Confirmation”) with our consortium collaborators which provides that (i) Charge+ shall at its own cost and expense, carry out and complete all works in connection with this project, (ii) Charge+ shall pay all concession and other fees payable and due to the Singapore authorities in connection with this project, (iii) we have no financial obligations to Charge+ or the other members of the consortium and (iv) Charge+ shall be entitled to all revenues received in connection with this project. Notwithstanding the Deed of Confirmation, each consortium member (including us) remains jointly and severally responsible to the authorities for the due performance of the agreements. The Singapore government is not a party to the Deed of Confirmation and the Deed of Confirmation does not extinguish the Company’s financial or operational obligations to the Singapore government. Therefore, if Charge+ was to default on its obligations under the agreements with the Singapore government relating to the EV project and Deed of Confirmation with respect to these costs, we estimate that the financial obligations to be borne by the other three consortium collaborators (including us) would not exceed US$3.3 million (SGD 4.4 million) over the next twelve years, comprised of no more than US$1.5 million (SGD 2 million) for the installation of the remaining charging stations and operating costs of no more than US$150,000 (SGD 200,000) per year for the next twelve years. See “Item 4. Information on the Company — B. Business Overview — Our Business Strategies and Future Plans” for more information.

We do not own or operate an EV charging function.

As we are not in the business of manufacturing or operating EV technology, our participation is limited to efforts of the types described above.

Our service contracts typically contain liquidated damages clauses, and our customers have in the past and may in the future request for liquidated damages if we fail to comply or observe certain contractual requirements.

Our service contracts with our customers typically contain liquidated damages clauses. If we fail to meet the requirements prescribed in the service contracts such as the inability to fulfil the required standard of cleanliness desired by our customers whether from shortage of personnel and/or other operational mishaps such as delays in cleaning schedules or deviations from customer instructions, our customers may require us to pay ascertained monetary damages, and/or they may deduct any such damages from our security deposit with them or any monies due or payable to us. In FY 2024 and FY 2023, we incurred an aggregate cost of approximately $0.6 million and   $1.1 million, respectively, in liquidated damages. In the event that substantial liquidated damages are imposed on us, this may have material adverse effect on our business, financial condition, results of operations and prospects.

The loss of or reduction of Singapore government grants and/or subsidies could reduce our profits.

We from time to time receive certain Singapore government grants and/or subsidies in connection with, among others, the wages of our employees (such as the Special Employment Credit and the Wage Credit Scheme) as well as the purchase of technological equipment. For FY 2024 and FY 2023, our Singapore government grants amounted to $2.8 million and $4.6 million, respectively.  

The provision of such grants and/or subsidies is at the sole discretion of the government depending on, among other things, public interest and political factors, and is not guaranteed.

There is no assurance that the Singapore government will provide such grants and/or benefits in future periods of economic uncertainty.

We have tendered bids and quoted for service contracts based on factors such as the prevailing market conditions and the availability of Singapore government grants and/or subsidies. Any further reduction in the amount of government grants and/or subsidies received may render certain of our ongoing projects unprofitable and this would have a material adverse effect on our business, financial condition, results of operations and prospects. Our increased use of technological equipment such as cleaning robots is also supported by specific Singapore government grants. We cannot predict whether we or our subsidiaries will continue to benefit from such grants and/or subsidies, and there is no guarantee that we can continue to receive Singapore government grants in the future. In the event that these Singapore government grants and/or subsidies fall away and we are unable to find alternative funding on same or similar favorable terms, our plans to expand our service capacity through capital expenditure on cleaning robots may not be successful and our financial condition and operating results may suffer. Further, it is uncertain whether we will be able to benefit from Singapore government grants, or any other grants or subsidies, in respect of any expansion of our business or any jobs performed by us outside Singapore.

We may suffer from cost overruns as our fees are typically agreed upon submission of tender or quotation.

We typically enter into service contracts whereby the contract value is fixed upon submission of a tender or quotation. A tender is proffered by us in a competitive bidding process, and a quotation is given directly by us to a potential client. We would take into consideration, among other things, the needs and expectations of the customers, the need for procurement of additional resources (such as manpower, equipment or supplies) and other logistical arrangements, the need for engaging sub-contractors, as well as prevailing Singapore government grants and/or subsidies.

The accuracy of our contract proposals is subject to our Group’s experience and expertise in assessing the tender or quotation requirements. However, the tender or quotation process may be carried out approximately one (1) to three (3) months prior to entry into the final service contract and the rendering of our services. During this period, we may face unforeseen circumstances such as changes in the cost of labor, equipment or supplies, regulatory changes, and other unforeseen circumstances which may result in cost overruns. Any increase in costs of labor, equipment or supplies, or the incurrence of additional sub-contractor fees during the term of the service contract, would be borne by us. If we are unable to control costs or manage our costs within our estimates, this may materially and adversely affect our results of operations and financial condition.

We are exposed to the credit risks of our customers and we may experience delays or defaults in collecting our receivables, and thus we face liquidity risks.

We extend our credit terms of between 30 and 90 days depending on the creditworthiness of our customers. As at March 31, 2024 and 2023, accounts receivable were approximately $18.4 million and $15.4 million, respectively, and our average accounts receivable turnover days were 85 days and 72 days, respectively. Our total amount of reserve for uncollectible amounts of trade and other receivables were approximately $448,000 and $454,000 in FY 2024 and FY 2023, respectively. 

We face uncertainties over the timeliness of our customers’ payments and their ability to pay. Our customers’ ability to pay may be affected by events or circumstances that are difficult to foresee or anticipate, such as a decline in their business or an economic downturn. Hence, there can be no assurance that we will be able to collect our trade debts fully or within a reasonable period of time.

As such, our financial condition and results of operations are dependent, to a certain extent, on the creditworthiness of our customers. If there are any unforeseen circumstances affecting our customers’ ability or willingness to pay us, we may experience payment delays or non-payment. In such events, our Group’s liquidity, cash flows and working capital may be adversely affected.

Our business involves inherent industrial risks and occupational hazards, the materialization of which may adversely affect our business operations and financial results.

Our business involves inherent industrial risks and occupational hazards, which may not be wholly eliminated or preventable through the implementation of safety measures. Our industry is labor-intensive by nature and our workers are required to perform certain tasks that present risks and dangers, such as working at a considerable height above ground, cleaning slippery floors, working in environments which may be dusty or dirty and may contain viruses or bacteria, carrying heavy objects, coming into contact with cleaning chemicals such as bleach and detergents, and operating motor vehicles and cleaning machinery.

In addition, we are liable under the WICA and under Singapore common law to compensate employees (including sub-contractors’ employees) who suffer bodily injuries or death as a result of accidents or who contract occupational diseases arising out of and in the course of their employment with us. We may also face claims from third parties from time to time including those who suffer personal injuries at premises where we provide services. Thus, we may from time to time be involved in material disputes with various parties in the ordinary course of our business. Such complaints, allegations and legal actions, regardless of their merit, may result in public scrutiny and negative publicity, thereby harming the standing and market reputation of our Group. In the event that claims are brought against us, whether with or without merit, the resulting litigation, arbitration, administrative or other legal proceedings could be time consuming and costly.

While we have implemented QEHS procedures, there is no assurance of compliance therewith by our employees at all times or that they will not be exposed to risks or dangers related to their work activities, such as illnesses from diseases or viruses, or physical injuries arising from equipment failure or industrial accidents. In the event that such risks or dangers materialize, we may be subject to inquiries and investigations by the relevant authorities, thus disrupting our business and damaging our reputation, which may also affect the validity of our relevant licenses, permits and/or approvals, business, financial condition, results of operations and prospects. Please refer to the section titled “Item 4. Information on the Company — B. Business Overview — Legal Proceedings” of this Annual Report for further details.

Our operations are also exposed to the risk of equipment failure, failure by our employees to follow procedures and protocols, as well as risks inherent in operating equipment and machinery, resulting in damage to or loss of any relevant machines, equipment or facilities or to personal injury. A major operational failure could result in substantial loss of life and/or serious injury, damage to or loss of machines, equipment or facilities, protracted legal disputes and damage to our reputation. Further, our contracts provide that our customers can suspend or refuse services in the event that their operations are affected by events of force majeure. In the event of operational or equipment failure, we may be forced to cease part of our operations and we may be subject to any penalty or incur extra costs or expenses in any dispute as a result of such operational or equipment failure. As a result, the business, financial condition and results of operations of our Group may be materially and adversely affected.

We depend on certain equipment to perform our facilities services and are subject to associated risks of maintenance and obsolescence.

We utilize cleaning robots in the provision of our facilities services. We purchase these robots from third parties, and they typically come with a manufacturer’s warranty of one year. In the event that any necessary repairs are not covered by the manufacturer’s warranty or such warranty has expired, we would be required to pay for the costs of repair, which could be a significant amount.

Further, our cleaning robots may face obsolescence due to rapid technological developments and the emergence of alternative innovations. To the extent that our equipment faces obsolescence before the end of their expected useful lives, we may be subject to impairment losses. Changes and advancements in technology may require us to replace and upgrade our equipment at an earlier stage than expected. As a result, we may incur significant additional capital expenditure.

We are exposed to legal or other proceedings or to other disputes or claims.

In the event that our customers do not make payment in a timely manner, we may seek to enforce our contractual rights and seek recourse via litigation or arbitration. These legal procedures are time-consuming and the settlement of a contract dispute may require additional financial and other resources. Failure to secure adequate payments in time or to manage past due receivables effectively could have a material and adverse effect on our business, financial condition, results of operations and prospects.

Further, disputes and claims may arise, from time to time, between our Group and our customers, suppliers or sub-contractors for various reasons such as delays, unsatisfactory service delivery and alleged breaches of service contracts. Due to the nature of our services, we have, from time to time, been the subject of workplace safety and/or negligence claims from employees and/or members of the public. These disputes, if remain unresolved or worsen, may eventually result in legal or other proceedings and therefore cause disruptions and delays to our operations, in addition to the extra costs that may be incurred in their settlement or other resolution. Our resources may also be diverted to defend the claims, thereby adversely affecting our Group’s business, financial condition, results of operations and prospects.

In the event that we are unable to resolve the aforementioned disputes or claims satisfactorily in a timely manner or at all, our Group’s business, financial condition and results of operation may be materially and adversely affected. Please refer to the section titled “Item 4. Information on the Company — B. Business Overview  — Legal Proceedings” of this Annual Report for further details.

Our insurance coverage may not cover all our damages and losses.

We maintain insurance policies to provide insurance coverage of our business operations. We expect to renew our insurance policies, such as our insurance policy for work injury compensation on an annual basis and there is no assurance that we will be able to renew all of our policies or obtain new policies on similar terms.

The nature of our business operations entails inherent risks such as risk of fire, theft and property loss at the worksites during the course of our service contracts or during the delivery of our services. Also, we do not have key man insurance to cover the loss of key personnel. While our Directors believe that we have sufficient insurance coverage for our business operations in line with industry standards and business practices in Singapore and although we may be able to increase our insurance coverage when required, there is no assurance that our existing or future insurance coverage will be sufficient to indemnify us against all potential losses.

As a public company, we expect the laws, rules and regulations governing U.S. public companies will make it more expensive for us to obtain director and officer liability insurance, and we may be required to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage.

In the event that our existing insurance coverage is insufficient to indemnify us against all or any losses, our business, financial condition, results of operations and prospects may be materially and adversely affected.

We are dependent on our ability to retain existing senior management personnel and to attract new qualified management personnel.

Our continued success is highly dependent on our ability to retain our senior management personnel, who are responsible for key aspects of our business, including but not limited to maintaining customer relationships, developing new business opportunities, finance and project management. Our Executive Officers have an average of 19   years’ experience in the facilities services industry, and their knowledge, skills and extensive experience in our industry, business relationships with our customers, and ability to manage existing and develop new customer relationships have been important to the growth of our Group. If any of our key management personnel cease to be involved with our Group in the future and we are unable to find suitable replacements in a timely manner, this may cause disruptions to our business operations and our business, financial condition, results of operations and prospects may be adversely affected.

The success and growth of our Group also depends on our ability to identify, hire, train and retain suitable, skilled and qualified key management personnel. If we are unable to hire and retain employees from different sectors apart from the facilities services industry, such as hires with technology, finance, human resources and business development capabilities, our ability to build up our key management personnel team may be limited to a certain extent.

The appeal of our services is reliant, to some extent, on maintaining and protecting the brand names and trademarks in our business.

Our business is sensitive to customer perception of the quality and safety of our services and products. In the event of any misuse of our brand and/or trademarks (which may include misuse by our sub-contractors, our employees or unrelated third parties), or in the event we fail to detect, deter and prevent trademark, related misconduct, or otherwise fail to effectively protect our brand and/or trademarks, our reputation could be damaged, resulting in our business, financial condition, results of operations and prospects being materially and adversely affected.

We are exposed to risks of infringement of our intellectual property rights and the unauthorized use of our trademarks by third parties and we may face litigation suits for intellectual property infringement.

We believe our trademarks are well recognized by our customers and in the industries we are operating in, which reflects our reliable and quality services that have contributed to our success. It is possible that our competitors or other third parties may adopt trademarks similar to ours, which may lead to brand confusion. If we fail to effectively protect our trademarks and other intellectual property, generally or against specific third party infringement, our intellectual property rights could be negatively affected and our customers may have a negative impression of our service quality which in turn may have an adverse impact on our Group’s reputation, prospects, business and financial results.

There is also no assurance that we will not be sued for any potential infringement of any intellectual property rights of third parties in the future. In the event of any claims or litigation involving infringement of the intellectual property rights of third parties, whether with or without merit, we may be required to divert a significant amount of our time and resources to defend or attend to any possible litigation or legal proceedings. As a result, our reputation, business and financial results may be adversely affected.

We could incur substantial costs as a result of data protection concerns or IT systems disruption or failure.

While we have not been the subject of any cyber-attacks or IT system failures that have had a material impact on our Group, our business may be impacted by such attacks or system failures in the future. Cybersecurity attacks, in particular, are evolving and include, but are not limited to, malicious software, attempts to gain unauthorized access to data and other electronic security breaches that could lead to disruptions in systems, unauthorized release of confidential or otherwise protected information and corruption of data. A cyberattack or system failure may result in operational downtimes and/or delays, which may have a detrimental impact on our ability to provide services to our customers. In addition, we utilize cleaning robots in the provision of our facilities services and we have established online booking platforms (web based and mobile applications) for our HomeHelpy business, and any failure of these systems could disrupt our daily operations and lead to delays of our provision of services or loss in our revenues.

We handle the personal data of customers in the ordinary course of providing cleaning services to individual customers. The collection and use of such personal data is governed by personal data protection laws in Singapore, in particular the Personal Data Protection Act 2012 (No. 26 of 2012). While we have implemented measures to protect sensitive information and confidential and personal data and comply with applicable laws, rules and regulations, our facilities and systems may be vulnerable to security breaches and other data loss, including cyber-attacks. In addition, it is not possible to predict the impact on our business of any future loss, alteration or misappropriation of information in our possession related to us, our employees, former employees, customers, suppliers or others. This could lead to negative publicity, legal claims, theft, modification or destruction of proprietary or other key information, damage to or inaccessibility of critical systems, operational downtimes and/or delays and other significant costs, which could adversely affect our business, financial condition, results of operations and prospects.

Unauthorized disclosure, destruction or modification of data, through cybersecurity breaches, computer viruses or otherwise or disruption of our services could expose us to liability, protracted and costly litigation and damage our reputation.  

Our business involves the collection, storage, processing and transmission of customers’ business data. An increasing number of organizations, including large merchants and businesses, other large technology companies, financial institutions and government institutions, have disclosed breaches of their information technology, or IT, systems, some of which have involved sophisticated and highly targeted cybersecurity attacks, including on portions of their websites or infrastructure. We may also be subjected to breaches of cybersecurity by hackers. Threats may derive from human error, fraud or malice on the part of employees or third parties, or may result from accidental technological failure. Concerns about cybersecurity are increased when we transmit information. Electronic transmissions can also be subjected to cybersecurity attacks, interception or loss. Also, computer viruses and malware can be distributed and spread rapidly over the internet and could infiltrate our systems or those of our associated participants, which can impact the confidentiality, integrity and availability of information, and the integrity and availability of our products, services and systems, among other effects. Denial of service or other cybersecurity attacks could be targeted against us for a variety of purposes, including interfering with our products and services or creating a diversion for other malicious activities. These types of actions and attacks could disrupt our delivery of products and services or make them unavailable, which could damage our reputation, force us to incur significant expenses in remediating the resulting impacts, expose us to uninsured liabilities, subject us to lawsuits, fines or sanctions, distract our management or increase our costs of doing business.

Our encryption of data and other protective measures may not prevent unauthorized access or use of sensitive data. A breach of our system or that of one of our associated participants may subject us to material losses or liability. A misuse of such data or a cybersecurity breach could harm our reputation and deter customers from using our products and services, thus reducing our revenue. In addition, any such misuse or breach could cause us to incur costs to correct the breaches or failures, expose us to uninsured liabilities, increase our risk of regulatory scrutiny, subject us to lawsuits, result in the imposition of material penalties and fines under applying laws or regulations.

We cannot assure that there are written agreements in place with every associated participant or that such written agreements will prevent the unauthorized use, modification, destruction or disclosure of data or enable us or our customers to obtain reimbursement in the event we should suffer incidents resulting in unauthorized use, modification, destruction or disclosure of data. Any unauthorized use, modification, destruction or disclosure of data could result in protracted and costly litigation, which could have a material and adverse effect on our business, financial condition and results of operations.

Cybersecurity attack incidents are increasing in frequency and evolving in nature and include, but are not limited to, installation of malicious software, unauthorized access to data and other electronic security breaches that could lead to disruptions in systems, unauthorized release of confidential or otherwise protected information and the corruption of data. Given the unpredictability of the timing, nature and scope of information technology disruptions, there can be no assurance that the procedures and controls we employ will be sufficient to prevent security breaches from occurring and we could be subject to manipulation or improper use of our systems and networks or financial losses from remedial actions, any of which could have a material and adverse effect on our business, financial condition and results of operations.

The value of our intangible assets and costs of investment may become impaired.

As a result of our past acquisitions carried out pursuant to the Restructuring Exercise in 2021, goodwill and other intangible assets represented a portion of our assets. Goodwill and other intangible assets (comprising customer contracts and customer relationships) were approximately $0.7 million and $0.8 million as at March 31, 2024 and 2023, respectively, representing approximately 1.5% and 1.8% of our total assets. During FY2023, we determined there was an impairment charge of approximately $138,000   related to the recorded goodwill relating to the acquisition of Maint-Kleen. For the year ended March 31, 2024, we determined there was no impairment of our remaining recorded goodwill. If we make additional acquisitions, it is likely that we will record additional intangible assets such as goodwill on our consolidated statement of financial position.

Other intangible assets are amortized over their estimated useful lives. In accordance with applicable accounting standards, we periodically evaluate our goodwill and other intangible assets to determine whether all or a portion of their carrying values may no longer be recoverable, in which case a charge to the profit or loss statement may be necessary. Such impairment testing is complex and requires us to make assumptions and judgments regarding the estimated recoverable amount of our cash-generating units to which the goodwill is allocated. If estimated recoverable amounts are less than the carrying values for goodwill in future annual impairment tests, we may be required to record impairment losses in future periods. Any future evaluations requiring an impairment of our goodwill could materially affect our results of operations and shareholders’ equity in the period in which the impairment occurs. A material decrease in shareholders’ equity could, in turn, potentially impact our ability to pay dividends.

Our historical financial and operating results are not a guarantee of our future performance.

Our annual and periodic financial results vary from year-to-year and from period-to-period, in response to a number of factors that we cannot predict, such as general business outlook and sentiment, economic market conditions, employment rates, inflation and interest rates and consumer confidence. As such, we believe that our annual and periodic financial results are not a guarantee of our future economic performance and undue reliance should not be placed on such results for future speculative purposes.

We may be exposed to liabilities under applicable anti-corruption laws and any determination that we violated these laws could have a materially adverse effect on our business.

We are subject to various anti-corruption laws that prohibit companies and their agents from making improper payments or offers of payments for the purpose of obtaining or retaining business. We may conduct business in countries and regions that are generally recognized as potentially more corrupt business environments. Activities in these countries create the risk of unauthorized payments or offers of payments by one of our employees or agents that could be in violation of various anti-corruption laws, including the Prevention of Corruption Act 1960 of Singapore (the “PCA”) and the United States Foreign Corrupt Practices Act (the “FCPA”). We have implemented safeguards and policies to discourage these practices by our employees and agents but we cannot provide assurance that our internal controls and compliance systems will always protect us from acts committed by our employees or agents. If our employees or agents violate our policies or we fail to maintain adequate record keeping and internal accounting practices to accurately record our transactions, we may be subject to regulatory sanctions. Violations of the PCA or the FCPA or other anti-corruption laws, or allegations of any such acts, could damage our reputation and subject us to civil or criminal investigations in Singapore, the United States and in other jurisdictions. Those and any related shareholder lawsuits could lead to substantial civil and criminal, monetary and non-monetary penalties and cause us to incur significant legal and investigatory fees which could adversely affect our business, consolidated financial condition and results of operations.

Any inability by us to consummate and effectively integrate acquisitions into our business operations may adversely affect our results of operations.

We invest time and resources into carefully assessing opportunities for acquisitions, and we continue to evaluate potential acquisition opportunities to support, strengthen and grow our business, including potentially in the near term. For example, since 2020 we have acquired Maint-Kleen, CSG and Princeston International. Despite diligence and integration planning, acquisitions still present certain risks, including the time and economic costs of integrating an acquisition’s technology, control and financial systems, unforeseen liabilities, and difficulties in bringing together different work cultures and personnel. Although we have previously completed several acquisitions, there can be no assurance that we will be able to locate suitable acquisition candidates, acquire possible acquisition candidates, acquire such candidates on commercially reasonable terms, or integrate acquired businesses successfully in the future. Future acquisitions, including those we may consummate in the near term, may require us to incur additional debt and contingent liabilities, which may adversely affect our business, results of operations and consolidated financial condition. The process of integrating acquired businesses into our existing operations may result in operating, contractual and supply chain difficulties, such as the failure to retain customers or management personnel. Such difficulties may divert significant financial, operational and managerial resources from our existing operations, and make it more difficult to achieve our operating and strategic objectives.

We may be subject to claims against us relating to any acquisition or business combination.

There may be liabilities assumed in any acquisition or business combination that we did not discover or that we underestimated in the course of performing our due diligence. Although a seller generally will have indemnification obligations in favor of us under an acquisition or merger agreement, these obligations will usually be subject to financial limitations, such as general deductibles and maximum recovery amounts, as well as time limitations. We cannot ensure that our right to indemnification from any sellers will be enforceable, collectible or sufficient in amount, scope or duration to fully offset the amount of any undiscovered or underestimated liabilities that we may incur. Any such liabilities, individually or collectively, could have a material and adverse effect on our prospects, business and financial results.

We have since the IPO incurred, and we will continue to incur, significant expenses and devote other significant resources and management time as a result of being a public company, which may negatively impact our financial performance and could cause our results of operations and financial condition to suffer.  

We have since the IPO incurred, and we will continue to incur, significant legal, accounting, insurance and other expenses as a result of being a public company. Laws, regulations and standards relating to corporate governance and public disclosure for public companies, including the Dodd-Frank Act of 2010, the Sarbanes-Oxley Act, regulations related thereto and the rules and regulations of the SEC and Nasdaq, have, since the IPO, significantly increased our costs as well as the time that must be devoted to compliance matters. We expect that continued compliance with these laws, rules, regulations and standards will substantially increase our expenses as compared to our expenses prior to the IPO, including our legal and accounting costs, and make some of our operating activities more time-consuming and costly. These public company obligations also will require attention from our senior management and could divert their attention away from the day-to-day management of our business. We also expect these laws, rules, regulations and standards to make it more expensive for us to obtain director and officer liability insurance, and we may be required to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage. As a result, it may be more difficult for us to attract and retain qualified persons to serve on our Board of Directors or as officers. If we are unable to satisfy our obligations as a public company, we could be subject to delisting of our Shares, fines, sanctions and other regulatory actions and potential civil litigation.

If we fail to maintain an effective system of disclosure controls and internal controls over financial reporting, our ability to timely produce accurate financial statements or comply with applicable regulations could be impaired.

The Sarbanes-Oxley Act requires, among other things, that we maintain effective internal disclosure controls and procedures over our financial reporting. We are continuing to develop and refine our disclosure controls and other procedures that are designed to ensure that information required to be disclosed by us in our reports that we will file with the SEC will be recorded, processed, summarized, and reported within the time periods and as otherwise specified in SEC rules, and that information required to be disclosed in reports under the Exchange Act is accumulated and communicated to our principal Executive Officers and financial officers. We are also continuing to improve our internal controls over financial reporting.

Ensuring that we have effective disclosure controls and procedures and internal controls over financial reporting in place so that we can produce accurate financial statements on a timely basis is a costly and time-consuming effort that will need to be re-evaluated frequently. Our internal controls over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements in accordance with GAAP. Beginning with our second annual report on Form 20-F after we become a company whose securities are publicly listed in the United States, we may be required, pursuant to Section 404 of the Sarbanes-Oxley Act, to make a formal assessment of the effectiveness of our internal controls over financial reporting, and once we cease to be an emerging growth company, we will be required to include an attestation report on internal controls over financial reporting issued by our Independent Registered Public Accounting Firm. During our evaluation of our internal controls, if we identify one or more material weaknesses in our internal controls over financial reporting, we will be unable to assert that our internal controls over financial reporting are effective. We cannot assure you that there will not be material weaknesses or significant deficiencies in our internal controls over financial reporting in the future. Any failure to maintain internal controls over financial reporting could severely inhibit our ability to accurately report our financial condition, or results of operations.

We do not expect to be subject to certain Nasdaq corporate governance rules applicable to U.S. listed companies.

As a foreign private issuer, we are entitled to rely on a provision in Nasdaq’s corporate governance rules that allows us to follow Singapore corporate law with regards to certain aspects of corporate governance. This allows us to follow certain corporate governance practices that differ in significant respects from the corporate governance requirements applicable to U.S. companies listed on Nasdaq.

In addition, our Audit Committee is not subject to additional Nasdaq requirements applicable to listed U.S. companies, including an affirmative determination that all members of the audit committee are “independent,” using more stringent criteria than those applicable to the Company under relevant SEC rules. Nasdaq’s corporate governance rules require listed U.S. companies to, among other things, seek shareholder approval for the implementation of certain equity compensation plans and issuances of shares, which the Company is not required to follow as a foreign private issuer. However, we voluntarily have a majority of independent directors and our audit committee will consist of three independent directors.

Negative publicity relating to our Group or our Directors, Executive Officers or Major Shareholders may materially and adversely affect our reputation and Share price.

Negative publicity or announcements relating to our Group or any of our Directors, Executive Officers or Major Shareholders, whether with or without merit, may materially and adversely affect the reputation and goodwill of our Group in our industry, consequently affecting our relationships with our customers, suppliers and sub-contractors. In addition, such negative publicity may affect market perception of our Group and the performance of our Share price.

Negative publicity or announcements may include, among others, newspaper reports of accidents at our work sites, unsuccessful attempts in joint ventures, acquisitions or take-overs, any involvement we may have in litigation or insolvency proceedings, and unfavorable or negative articles on any of our Directors, Executive Officers or Major Shareholders. Any claims and legal actions brought forward by our customers may also have a negative impact on our brand image. If our customers, suppliers and sub-contractors subsequently lose confidence in us, this could result in the termination of business relationships or fewer referrals or invitations to tender or quote for facilities services or other contracts. To this end, our business, financial condition, results of operations and prospects may be adversely impacted.

Risks Relating To The Industry In Which We Operate

We operate in a highly regulated industry.

We are required to obtain licenses, permits, approvals and/or certifications for our business operations and there is no guarantee that such licenses, permits, approvals and or certifications can be obtained, renewed or will not be revoked in the future.

The facilities services industry in Singapore is highly regulated. In order to conduct our business operations, we are required to hold various valid licenses, permits, approvals and/or certifications. These licenses, permits, approvals and/or certifications are subject to various terms and conditions, and are renewable on a periodic basis. While we are not aware of any circumstances which might prevent us from renewing our licenses, permits, approvals and/or certifications, there is no guarantee that these will be renewed in a timely basis, or at all.

If we fail to adhere to the stipulated regulatory requirements and/or conditions of our licenses, we may be subject to fines and penalties or be required to take remedial measures; our licenses, permits, approvals and/or certificates may be revoked; and/or additional terms and conditions may be imposed on us. In particular, the Director-General of NEA has discretion to revoke, suspend or impose any other directions or restrictions on the licensee’s cleaning business license if the licensee has gone or is likely to go into compulsory or voluntary liquidation other than for the purpose of amalgamation or reconstruction, or the Director-General becomes aware of a circumstance that would have required or permitted the Director-General to refuse to grant or renew the licensee’s cleaning business license. See section titled “Item 4. Information on the Company — B. Business Overview — Regulations” for further details on material Singapore government regulations applicable to us. The loss of licenses, permits, approvals and/or certifications could disrupt our business operations thereby adversely affecting our business, financial condition, results of operations and prospects.

In Singapore, there are twelve major registration categories, and various “workheads,” administered by the Building & Construction Authority of Singapore, or BCA. The Facilities Management Workheads, also known as “FM,” are the relevant “workheads” applicable to our services. There are several FM sub-categories that affect our Company.

In order to bid for the provision of cleaning services in a public sector project of an unlimited contract size, we would have to continue to maintain a L6 grade registration in respect of the FM02 workhead for “Housekeeping, Cleansing, Desilting and Conservancy” currently held by Primech A&P and Maint-Kleen, and there is no assurance that we will be able to continue to do so. The Singapore government may also introduce new workheads from time to time. For instance, with effect from April 1, 2020, BCA introduced a new FM01 workhead for “Facilities Management” whereby a provider has to provide at least two distinct maintenance services. Such maintenance services include security services, cleaning services, landscaping services and pest control. BCA may also from time to time change the requirements for obtaining the requisite workhead. Any inability to renew or maintain our current workhead grading, or obtain any relevant new workhead grading, may reduce our business opportunities for our Group and have an adverse impact on our business, financial condition, results of operations and prospects.

The cleaning business in Singapore was only subject to license beginning in 2014, when the EPHA was amended to require the licensing of cleaning businesses. Any changes to the existing rules and regulations which govern our business operations may require us to obtain additional licenses and registrations from the relevant Singapore government authorities. To this end, our financial performance may be adversely affected if additional expenses are incurred as part of complying with license and registration requirements. We also cannot guarantee that such additional licenses and registrations will be granted to us in a timely manner, or at all. In the event that there is a delay in obtaining the relevant licenses, we are unable to obtain or renew the necessary licenses or if the necessary licenses are revoked, our business, financial condition, results of operations and prospects may be adversely affected.

We may face employee retention and labor shortage issues due to the labor-intensive nature of the facilities services industry and limited local labor force in Singapore.

At present, the facilities services industry is highly labor-intensive. Labor costs contributed approximately 85.4% and 84.2  % of our direct costs for FY 2024 and FY 2023, respectively. In particular, we are heavily reliant on foreign workers. As of March 31, 2024, approximately 69% of our employees were Singapore citizens and permanent residents, while the remaining 31% employees were foreign workers.

The MOM prescribes a dependency ratio ceiling which sets out the maximum permitted ratio of foreign workers to the total workforce that a company is allowed to hire. Since January 1, 2020, MOM reduced the dependency ratio ceiling for the services sector from 40% to 35%. In addition, we also have to pay levies and performance bonds in respect of our non-traditional source (“NTS”) employees, resulting in increased expenses for our Group.

While the employment of Singapore citizens and permanent residents is not subject to the same restrictions, the employment of such workers in the cleaning, security and landscape sectors must comply with the Progressive Wage Model (“PWM”). The PWM requirements for the cleaning sector took effect from September 1, 2014 and were revised with effect from July 1, 2018, and compliance with these PWM requirements is a licensing condition for cleaning companies. The PWM stipulates monthly minimum basic wages for cleaners performing different types of cleaning jobs (the minimum wage varies depending on the job scope of the cleaner) and provides for yearly wage increases from July 1, 2020 to June 30, 2029. In addition, there is a mandatory PWM bonus payable to cleaners who meet certain criteria. See section titled “Item 4. Information on the Company — B. Business Overview — Regulations — Progressive Wage Model” for further details. There is no assurance that we will be able to pass on any increase in labor costs onto our customers when determining our tender pricing, failing which, our business, financial condition, results and operations and profitability may be materially and adversely affected.

Further, we may also face retention issues as the facilities services industry in Singapore is fragmented with many industry players, who may be able to offer more competitive wages or benefits than us, and our employees are generally not subject to non-compete restrictions and are able to easily move between different employers in the industry. Various factors including labor laws, travel restrictions and competition from other employers may affect our ability to retain existing employees or hire new employees, or to procure additional manpower from sub-contractors when needed. In the event that we are not able to maintain or increase our workforce as needed, we may face a shortage of labor and our business, financial condition, results of operations and prospects may be materially and adversely affected.

Our supply of foreign labor may be affected by the laws, regulations and policies in the countries from which the foreign labor originates.

We are dependent on the supply of foreign labor for our business operations, which is predominantly subject to the supply conditions in foreign labor markets. Our foreign workers are mainly from Malaysia, Bangladesh, Myanmar and China. The supply of foreign labor is affected by the laws, regulations and policies of the countries from which the foreign labor originates. Such laws, regulations and policies or changes thereof or the introduction of additional requirements and/or restrictions by the authorities or governments of these countries may affect the supply of foreign labor and may cause disruptions or delays to our operations and/or increase our labor costs.

For example, we source our foreign labor from foreign labor provision agencies and the laws, regulations and policies of the countries from which the foreign labor originates may require the foreign labor provision agencies to be licensed or meet other requirements before they may arrange for the foreign labor to work abroad. Hence, if these foreign labor provision agencies breach the relevant laws, regulations and policies and have their licenses revoked, we will not be able to source foreign labor from them, and we may not be able to find an alternative foreign labor provision agency. In the event that we are not able to find a suitable supply of foreign labor to meet the requirements of our customers as a result of any of the foregoing factors, our business, financial condition, results of operations and prospects may be adversely affected.

A shortage of reliable sub-contractors may disrupt our business operations and increase our costs and we may be liable for the breaches of our sub-contractors.

In order to manage our service capacity and to complement our service offerings, we may sub-contract portions of our facilities services contracts to external service providers from time to time. For example, we outsource external façade cleaning to specialist cleaners and may from time to time outsource residential space cleaning services to sub-contractors with expertise in condominium cleaning. We also outsource pest control services, landscaping and waste management to sub-contractors with the relevant expertise. While we have oversight of our sub-contractors, we are not be able to control the day-to-day management and operations of our sub-contractors. Pursuant to the terms of the service contracts entered into with our customers, we may be liable for the negligence, omission, or default arising from our sub-contractors as well.

Notably, our engagements with sub-contractors are not exclusive and our sub-contractors are free to take up work with other companies. Where our sub-contractors decide not to work with us or where we are unable to retain them at costs favorable to us, our business, financial condition, results of operations and prospects may be materially and adversely affected.

Although we are selective in engaging sub-contractors, there is a risk that our sub-contractors may fail to meet the standards required by our customers. In the event that we are required to replace a sub-contractor, we may incur higher costs and there may be disruptions or delays to the services rendered to our customers. Consequently, there may be an adverse impact on our reputation and on our business, financial condition, results of operations and prospects.

The facilities services industry in Singapore is highly competitive.

Our success in the facilities services industry will depend on our ability to compete effectively against our competitors on factors such as pricing, quality of services, reliability, reputation and size of operations. We may face more intensive competition in the future from existing competitors and new market entrants, which may be in a better position to expand their market share due to their longer operating histories, larger customer base, ready access to sub-contractors, wider range of services offered, greater financial resources or other factors. See section titled “Item 4. Information on the Company — B. Business Overview — Competition” for further details. There is no assurance that the facilities services industry in Singapore will not see an increase in the number of contractors who possess the requisite accreditation to tender for higher-value facilities services contract, or obtain a cleaning business license, or an increase in the number of contractors who have a similar expertise and track record to us.

The facilities services industry in Singapore may be affected by new initiatives introduced by the relevant regulatory agencies. For example, the NEA introduced the Clean Mark Accreditation Scheme in 2010 as an initiative to recognize businesses that deliver high cleaning standards through the training of workers, use of equipment to improve work processes and fair employment practices, and our subsidiaries, Primech A&P and Maint-Kleen subsequently obtained Clean Mark awards. See section titled “Item 4. Information on the Company — B. Business Overview — Regulations — Enhanced Clean Mark Accreditation Scheme” for further details. If we are unable to capitalize on Singapore government-backed initiatives and adapt or compete against our competitors in the face of such changes, our business, financial condition, results of operations and prospects may be materially and adversely affected.

In order to expand service capacity, certain of our competitors in the facilities services industry have been exploring the use of new cleaning technology that will improve their business, including novel cleaning technology and product developers with specialized technical skills. If we are unable to adapt to and acquire such advances in technology (such as the use of effective green chemicals), we cannot remain competitive, and this may result in lower profit margins and a loss of market share for our Group. There is no assurance that we will be able to compete against our competitors effectively in the future and this could have a material and adverse effect on the business, financial condition, results of operations and prospects of our Group.

Industry consolidation may give our competitors advantage over us, which could result in a loss of customers and/or a reduction of our revenue.

Some of our competitors have made or may make acquisitions or enter into partnerships or other strategic relationships in order to offer more comprehensive services or achieve greater economies of scale. In addition, new entrants not currently considered competitors may enter our market through acquisitions, partnerships or strategic relationships. Many potential entrants may have competitive advantages over us, such as greater name recognition, longer operating histories, more varied services and larger marketing budgets, as well as greater financial, technical and other resources. Industry consolidation may result in practices that make it more difficult for us to compete effectively, including on the basis of price, sales and marketing programs, technology or services functionality. These pressures could result in a reduction in our revenue.

We are subject to risks in connection with the use and storage of cleaning chemicals. In addition, any perceived use of cleaning supplies and/or chemicals that are not environmentally friendly or safe may adversely affect our brand name and the contracts we can successfully bid for.

Certain of the cleaning solutions and chemicals we use in our cleaning and pest control operations are considered “hazardous substances” under the Environmental Protection and Management Act 1999 of Singapore (“EPMA”) and are subject to regulatory control. In particular, we are required under the EPMA and the regulations thereunder to hold a permit to store and use such hazardous substances and comply with certain conditions of storage and disposal. Non-compliance with the relevant laws and regulations may result in fines or imprisonment, and could also reduce our chances of successfully tendering for public contracts, in view of the Singapore government’s preference for environmentally friendly cleaning chemicals. Our inability to successfully tender for public contracts could adversely affect our business, financial position, and results of operations and future prospects.

In the event that the public deems our cleaning solutions and chemicals to be not environmentally friendly or safe, or to be harmful to humans or animals, the demand for our services may reduce. This might happen regardless of whether such claims are justified or not. This in turn can damage our branding and have an adverse impact upon our business, financial position, results of operations and prospects.

New and stricter legislation and regulations may affect our business, financial condition and results of operations.

Our business requires compliance with many laws and regulations. Increased legislative and regulatory activity and burden, particularly in the areas of licensing requirements and immigration and employment regulation, and a more stringent manner in which any of them are applied could significantly impact our business. Failure to comply with these laws and regulations could subject us to lawsuits and other proceedings, and could also lead to damage awards, fines and penalties. We may become involved in a number of legal proceedings and audits, including Singapore government and agency investigations, and consumer, employment, tort and other litigation. The outcome of some of these legal proceedings, audits, and other contingencies could require us to take, or refrain from taking, actions that could harm our operations or require us to pay substantial amounts of money, harming our financial condition. Additionally, defending against these lawsuits and proceedings may be necessary, which could result in substantial costs and diversion of our senior management’s attention and resources, harming our financial condition. There can be no assurance that any pending or future legal or regulatory proceedings and audits will not harm our business, financial condition and results of operations.

Furthermore, the regulatory environment in which we operate is still developing, and the potential exists for future legislation and regulations to be adopted. These developments may adversely affect the customers to whom, and the markets into which, we sell our products, increase our costs, require additional expenditures to ensure continued regulatory compliance and otherwise negatively affect our business, consolidated financial condition or results of operations, including in ways that cannot yet be foreseen.

Risks Relating To Investments In Singapore Companies

We are incorporated in Singapore, and our Shareholders may have more difficulty in protecting their interests than they would as shareholders of a corporation incorporated in the United States.

Our corporate affairs are governed by our Constitution and by the laws governing companies incorporated in Singapore. The rights of our Shareholders and the responsibilities of the members of our board of directors under Singapore law may be different from those applicable to a corporation incorporated in the United States. Therefore, our public Shareholders may have more difficulty in protecting their interests in connection with actions taken by us, our management, members of our board of directors or our Major Shareholders than they would as shareholders of a corporation incorporated in the United States. For example, controlling shareholders in corporations incorporated in Delaware are subject to fiduciary duties while controlling shareholders in Singapore companies are not subject to such duties.

In addition, only persons who are registered as Shareholders in our register of members are recognized under Singapore law as our Shareholders. Only registered Shareholders have legal standing to institute Shareholder actions against us or otherwise seek to enforce their rights as Shareholders. Investors in our Shares who are not specifically registered as Shareholders in our register of members (for example, where such Shareholders hold Shares indirectly through the Depository Trust Company “DTC”) are required to be registered as Shareholders in our register of members in order to institute or enforce any legal proceedings or claims against us, our directors or our executive officers relating to shareholder rights. The administrative process of becoming a registered Shareholder could result in delays prejudicial to any such legal proceeding or enforcement action. See section titled “Item 10. Additional Information — B. Constitution” for a discussion of certain differences between Singapore and Delaware corporation law.

It may be difficult for you to enforce any judgment obtained in the United States against us, our Directors, Executive Officers or our affiliates.

All of our Directors and Executive Officers reside outside the United States. In addition, all of our assets are located outside the United States. As a result, it may be difficult to enforce in the United States any judgment obtained in the United States against us or any of these persons, including judgments based upon the civil liability provisions of the U.S. securities laws. In addition, in original actions brought in courts in jurisdictions located outside the United States, it may be difficult for investors to enforce liabilities based upon U.S. securities laws.

There is no treaty between the United States and Singapore providing for the reciprocal recognition and enforcement of judgments in civil and commercial matters and a final judgment for the payment of money rendered by any federal or state court in the United States based on civil liability, whether or not predicated solely upon the federal securities laws, would, therefore, not be automatically enforceable in Singapore. It is not clear whether a Singapore court may impose civil liability on us or our directors and officers who reside in Singapore in an action brought in the Singapore courts against us or such persons with respect to a violation solely of the federal securities laws of the United States.

In addition, holders of book-entry interests in the Shares (for example, where such Shareholders hold Shares indirectly through the DTC) will be required to be registered Shareholders as reflected in our register of members in order to have standing to bring a Shareholder action and, if successful, to enforce a foreign judgment against us, our Directors or our Executive Officers in the Singapore courts. Any such enforcement action would be subject to applicable Singapore laws. The administrative process of becoming a registered Shareholder could result in delays that could be prejudicial to any legal proceeding or enforcement action. In making a determination as to enforceability of a judgment of a state court or a federal court of the United States, the Singapore courts would have regard to, among other factors, whether the judgment was final and conclusive, given by a court of law of competent jurisdiction, expressed to be for a fixed sum of money, whether it was procured by fraud, or in breach of principles of natural justice, or whether the enforcement thereof would be contrary to public policy.

Accordingly, there can be no assurance that the Singapore courts would enforce against us, our Directors or our Executive Officers, judgments obtained in the United States which are predicated upon the civil liability provisions of the federal securities laws of the United States.

Subject to the general authority to allot and issue new Shares provided by our Shareholders, the Companies Act and our Constitution, our directors may allot and issue new Shares on terms and conditions and for such purposes as may be determined by our Board of Directors in its sole discretion. Any issuance of new Shares would dilute the percentage ownership of existing Shareholders and could adversely impact the market price of our Shares.

Under Singapore law, we may only allot and issue new Shares with the prior approval of our Shareholders at a general meeting. Subject to the general authority to allot and issue new Shares provided by our Shareholders, the provisions of the Companies Act, and our Constitution, we may allot and issue new Shares, to the number of the existing Shares to which such Shareholders are entitled on such terms and conditions as our Directors may think fit to impose. Such terms and conditions may be adverse to the rights of holders of our Shares.

Because new issuances of Shares are subject to Shareholder approval, if a sufficient number of Shares have not been approved for issuance in any given year, we may be delayed in raising capital through equity offerings or delayed or prevented from consummating an acquisition using our Shares. Assuming Shareholders have approved the issuance of Shares, we may seek to raise capital in the future, including to fund acquisitions, future investments and other growth opportunities. We may, for these and other purposes, issue additional Shares or securities convertible into Shares. Any additional issuances of new Shares could dilute the percentage ownership of our existing Shareholders and may also adversely impact the market price of our Shares.

We are subject to the laws of Singapore, which differ in certain material respects from the laws of the United States.

As a Singapore-incorporated company, we are required to comply with the laws of Singapore, certain of which are capable of extra-territorial application, as well as our Constitution. In particular, we are required to comply with certain provisions of the Securities and Futures Act 2001 of Singapore (the “SFA”), which prohibit certain forms of market conduct and information disclosures, and impose criminal and civil penalties on corporations, directors and officers in respect of any breach of such provisions. In addition, the Singapore Code on Take-Overs and Mergers, or “Singapore Take-over Code”, which specifies, among other things, certain circumstances in which a general offer is to be made upon a change in control of a Singapore-incorporated public company, and further specifies the manner and price at which voluntary and mandatory general offers are to be made.

The laws of Singapore and of the United States differ in certain significant respects. The rights of our Shareholders and the obligations of our Directors and Executive Officers under Singapore law may be different from those applicable to U.S. corporations, including those incorporated in Delaware, in material respects, and our Shareholders may have more difficulty and less clarity in protecting their interests in connection with actions taken by our management, members of our Board of Directors or our Major Shareholders than would otherwise apply to U.S. corporations, including those incorporated in Delaware. See section titled “Item 10. Additional Information — B. Constitution” for a discussion of certain differences between Singapore and Delaware corporation law.

In addition, the application of Singapore law, in particular, the Companies Act may, in certain circumstances, impose more restrictions on us, our Shareholders, Directors and officers than would otherwise be applicable to U.S. corporations, including those incorporated in Delaware. For example, the Companies Act requires a director to act with reasonable degree of diligence in the discharge of the duties of his or her office and, in certain circumstances, imposes criminal liability for specified contraventions of particular statutory requirements or prohibitions. In addition, pursuant to the provisions of the Companies Act, shareholders holding 10% or more of the total number of paid-up shares as at the date of the deposit carrying the right of voting at general meetings (disregarding paid-up shares held as treasury shares) may by depositing a requisition, require our Directors to convene an extraordinary general meeting. If our directors do not within 21 days after the date of deposit of the requisition proceed to convene a meeting, the requisitioning shareholders, or any of them representing more than 50% of the total voting rights represented of all of them, may themselves, proceed to convene such meeting, and we will be liable for the reasonable expenses incurred by such requisitioning shareholders. We are also required by the Companies Act to deduct corresponding amounts from fees or other remuneration payable by us to such of the directors as are in default.

Singapore take-over laws contain provisions that may vary from those in other jurisdictions.

The Singapore Take-over Code applies to, among others, corporations with a primary listing of their equity securities in Singapore. While the Singapore Take-over Code is drafted with, among others, listed public companies in mind, unlisted public companies with more than 50 (fifty) shareholders and net tangible assets of approximately $3.75 million (S$5.0 million) or more, must also observe the letter and spirit of the general principles and rules of the Singapore Take-Over Code, wherever this is possible and appropriate. Public companies with a primary listing overseas may apply to Securities Industry Council (“SIC”) to waive the application of the Singapore Take-over Code. As at the date of this Annual Report, no application has been made to SIC to waive the application of the Singapore Take-over Code in relation to us.

In this regard, the Singapore Take-Over Code contains certain provisions that may possibly delay, deter or prevent a future take-over or change in control of us. Under the Singapore Take-Over Code, except with the consent of SIC, any person acquiring an interest, whether by a series of transactions over a period of time or not, either on his own or together with parties acting in concert with him, in 30% or more of our voting shares is required to extend a take-over offer for all remaining voting shares in accordance with the procedural and other requirements under the Singapore Take-Over Code.

Except with the consent of SIC, such a take-over offer is also required to be made if a person holding between 30% and 50% (both inclusive) of our voting shares, either on his own or together with parties acting in concert with him, acquires additional voting shares representing more than 1% of our voting shares in any six-month period. While the Singapore Take-Over Code seeks to ensure an equality of treatment among shareholders in take-over or merger situations, its provisions could substantially impede the ability of the shareholders to benefit from a change of control and, as a result, may adversely affect the market price of the Shares and the ability to realize any benefit from a potential change of control.

Risks Relating To An Investment In Our Shares

An active trading market for our Ordinary Shares may not continue and the trading price for our Ordinary Shares may fluctuate significantly.

We cannot assure you that a liquid public market for our Ordinary Shares will develop or continue. If an active public market for our Ordinary Shares does not continue following the completion of our IPO, the market price and liquidity of our Ordinary Shares may be materially and adversely affected. The public offering price for our Ordinary Shares in our IPO (the “Offer Price”) was determined by negotiation between us and the Placement Agent based upon several factors, and we can provide no assurance that the trading price of our Ordinary Shares after the IPO will not decline below the public offering price. As a result, investors may experience a significant decrease in the value of their Ordinary Shares.

Our share price has been, and could continue to be, volatile. You may lose all or part of your investment, and litigation may be brought against us.

There has been significant volatility in the market price and trading volume of equity securities, which may be unrelated to the financial performance of the companies issuing the securities. These broad market fluctuations could negatively affect the market price of our stock. The market price and volume of our ordinary shares could fluctuate, and in the past has fluctuated, more dramatically than the stock market in general. Since our IPO, the market price of our ordinary shares has ranged from a high of $4.18 per share to a low of $0.5173 per share. There is no assurance that the market price for our Shares will not decline below the Offer Price. The Offer Price was determined after consultation between our Company and the Placement Agent, after taking into consideration, among others, market conditions and estimated market demand for our Shares. The Offer Price may not necessarily be indicative of the market price for our Shares after the completion of our IPO. Investors may not be able to sell their Shares at or above the Offer Price. The prices at which our Shares will trade after our IPO may fluctuate significantly and rapidly as a result of, among others, the following factors, some of which are beyond our control:

There is no guarantee that our Shares will appreciate in value after our IPO or even maintain the price at which you purchased the Shares. You may not realize a return on your investment in our Shares and you may even lose your entire investment in our Shares.

In addition, the stock markets have from time to time experienced significant price and volume fluctuations that have affected the market prices of securities. These fluctuations often have been unrelated or disproportionate to the operating performance of publicly-traded companies. In the past, following periods of volatility in the market price of a particular company’s securities, an investor may lose all or part of his or her investment, and litigation has sometimes been brought against that company. If similar litigation is instituted against us, it could result in substantial costs and divert our senior management’s attention and resources from our core business.

Furthermore, since our IPO is being conducted on a “best-efforts” basis and the actual public offering price per Ordinary Share will be determined by and among the Placement Agent, the investors, and us at the time of pricing and, as is typical, may be at a discount to the then-current, per-share market price of our Ordinary Shares, these factors may also negatively affect the market price of our Ordinary Shares.

Our Ordinary Shares may be subject to extreme volatility that is seemingly unrelated to the underlying performance of our business. Recently, companies with comparable public floats have experienced instances of extreme stock price run-ups followed by rapid price declines, and such stock price volatility was seemingly unrelated to the respective company’s underlying performance. Although the specific cause of such volatility is unclear, our anticipated public float may amplify the impact the actions taken by a few shareholders have on the price of our Ordinary Shares, which may cause our share price to deviate, potentially significantly, from a price that better reflects the underlying performance of our business. Should our Ordinary Shares experience run-ups and declines that are seemingly unrelated to our actual or expected operating performance and financial condition or prospects, prospective investors may have difficulty assessing the rapidly changing value of our Ordinary Shares. In addition, investors of our Ordinary Shares may experience losses, which may be material, if the price of our Ordinary Shares declines after our IPO or if such investors purchase shares of our Ordinary Shares prior to any price decline.

Holders of our Ordinary Shares may also not be able to readily liquidate their investment or may be forced to sell at depressed prices due to low volume trading. Broad market fluctuations and general economic and political conditions may also adversely affect the market price of our Ordinary Shares. As a result of this volatility, investors may experience losses on their investment in our Ordinary Shares. Furthermore, the potential extreme volatility may confuse the public investors of the value of our stock, distort the market perception of our stock price and our Company’s financial performance and public image and negatively affect the long-term liquidity of our Ordinary Shares, regardless of our actual or expected operating performance. If we encounter such volatility, including any rapid stock price increases and declines seemingly unrelated to our actual or expected operating performance and financial condition or prospects, it will likely make it difficult and confusing for prospective investors to assess the rapidly changing value of our Ordinary Shares and understand the value thereof.

We are a “controlled company” within the meaning of the Nasdaq Listing Rules and, as a result, may rely on exemptions from certain corporate governance requirements that provide protection to shareholders of other companies.

Upon the completion of the IPO we were, and upon completion of our IPO we will continue to be, a “controlled company” as defined under the Nasdaq Listing Rules because Sapphire Universe will own more than 50% of our total voting power. For so long as we remain a controlled company under that definition, we are permitted to elect to rely, and may rely, on certain exemptions from corporate governance rules, including an exemption from the rule that a majority of our Board of Directors must be independent directors or that we have to establish a nominating committee and a compensation committee composed entirely of independent directors. As a result, you will not have the same protection afforded to shareholders of companies that are subject to these corporate governance requirements. However, we voluntarily have a majority of independent directors and our audit committee will consist of three independent directors.

Our Shares may trade under $5.00 per share and thus would be known as “penny stock”. Trading in penny stocks has certain restrictions and these restrictions could negatively affect the price and liquidity of our Shares.

Our Shares may trade below $5.00 per share. As a result, our Shares would be known as “penny stock”, which is subject to various regulations involving disclosures to be given to you prior to the purchase of any penny stock. The SEC has adopted regulations which generally define a “penny stock” to be any equity security that has a market price of less than $5.00 per share, subject to certain exceptions. Depending on market fluctuations, our Shares could be considered to be “penny stock”. A penny stock is subject to rules that impose additional sales practice requirements on broker/dealers who sell these securities to persons other than accredited investors. For transactions covered by these rules, the broker/dealer must make a special suitability determination for the purchase of these securities. In addition, a broker/dealer must receive the purchaser’s written consent to the transaction prior to the purchase and must also provide certain written disclosures to the purchaser. Consequently, the “penny stock” rules may restrict the ability of broker/dealers to sell our Shares, and may negatively affect the ability of holders of our Shares to resell them. These disclosures require you to acknowledge that you understand the risks associated with buying penny stocks and that you can absorb the loss of your entire investment. Penny stocks generally do not have a very high trading volume. Consequently, the price of the shares is often volatile and you may not be able to buy or sell your shares when you want to.

The trading price of our Shares following the IPO may be subject to rapid and substantial price volatility that may be unrelated to our actual or expected operating performance and financial condition or prospects, making it difficult for prospective investors to assess the rapidly changing value of our ordinary shares.

The trading price of our Ordinary Shares following the IPO may be subject to rapid and substantial price volatility that may be unrelated to our actual or expected operating performance and financial condition or prospects, making it difficult for prospective investors to assess the rapidly changing value of our Ordinary Shares. Our Ordinary Shares may trade at prices higher or lower than the offering price. There have been recent instances of extreme share price run-ups followed by rapid price declines following initial public offerings, with share price volatility seemingly unrelated to company performance, particularly among companies with relatively smaller public floats, and we expect that such instances may continue and/or increase in the future. Contributing to this risk of volatility are a number of factors. We anticipate our Ordinary Shares will initially be held by a relatively limited number of shareholders and thus, are likely to be more sporadically and thinly traded than those of larger, more established companies. As a consequence of this lack of liquidity, the trading of relatively small quantities of Shares by our shareholders may disproportionately influence the price of those Shares in either direction. The price of our Ordinary Shares could, for example, decline precipitously in the event that a large number of our Shares are sold on the market without commensurate demand as compared to a seasoned issuer that could better absorb those sales without adverse impact on its share price. As a consequence of this enhanced risk, more risk-adverse investors may, under the fear of losing all or most of their investment in the event of negative news or lack of progress, be more inclined to sell their Shares on the market more quickly and at greater discounts than would be the case with the shares of a larger, more established company that has a relatively large public float.

Many of these factors are beyond our control and may decrease the market price of our Ordinary Shares. Such volatility, including any stock run-ups, may be unrelated or disproportionate to our actual or expected operating performance and financial condition or prospects, making it difficult for prospective investors to assess the rapidly changing value of our Ordinary Shares. Accordingly, you could lose all or part of your investment.

There may be circumstances in which the interests of our Major Shareholder(s) could be in conflict with your interests as a Shareholder.

As at the date of this Annual report Sapphire Universe owns 82.23% of our Shares and voting power. Mr. Kin Wai Ho, our Chairman, currently beneficially owns 39.88% of our Shares through his equity ownership in Sapphire Universe. Messrs. Jin Ngee Vernon Kwek and Cyrus Jun Ming Wen currently beneficially own 12.75% and 29.60%,   of our Shares, respectively, through their equity ownership in Sapphire Universe. As a result of this ownership, Messrs. Ho, Kwek and Wen will have significant control and influence over our affairs and their voting power will constitute a quorum of our Shareholders voting on any matter requiring the approval of our Shareholders. Messrs. Ho, Kwek and Wen will continue to have significant influence over our affairs for the foreseeable future, including with respect to the nomination and election of Directors, the issuance of additional Shares or payment of dividends, the consummation of significant corporate transactions, such as the adoption of amendments to our Constitution and organizational regulations and approval of mergers or sales of substantially all of our assets.

In certain circumstances, the interests of Sapphire Universe as a Major Shareholder, and of each of Messrs. Ho, Kwek and Wen as significant indirect Shareholders, may conflict with the interests of our other Shareholders. Accordingly, this concentration of ownership may harm the market price of our Shares by, among other things:

Any of Sapphire Universe, Mr. Ho, Mr. Kwek and Mr. Wen may also cause corporate actions to be taken that conflict with the interests of our other Shareholders.

Future issuance of Shares by us and sale of Shares by our existing Shareholders may adversely affect the price of our Shares.

There will be no restriction on the ability of our Shareholders to sell their Shares. In the event we issue, or our Shareholders sell, substantial amounts of our Shares in the public market following the IPO, the price of our Shares may be adversely affected. Any resulting downward pressure on the price of our Shares may also make it difficult for us to issue new Shares and raise the necessary funds in the future at a time and price we deem appropriate. In addition, the price of our Shares may be adversely affected if our Shareholders subject to moratorium sell their Shares upon the expiry of the relevant moratorium periods.

We may require additional funding in the form of equity or debt for our future growth which will cause dilution in Shareholders’ equity interest.

We may pursue opportunities to grow our business through joint ventures, strategic alliance, acquisitions or investment opportunities. However, there can be no assurance that we will be able to obtain additional funding on terms that are acceptable to us or at all. If we are unable to do so, our future plans and growth may be adversely affected.

An issue of Shares or other securities to raise funds will dilute Shareholders’ equity interests and may, in the case of a rights issue, require additional investments by Shareholders. Further, an issue of Shares below the then prevailing market price will also affect the value of Shares then held by investors.

Dilution in Shareholders’ equity interests may occur even if the issue of shares is at a premium to the market price. In addition, any additional debt funding may restrict our freedom to operate our business as it may have conditions that:

The current disruptions, volatility or uncertainty of the credit markets could limit our ability to borrow funds or cause our borrowings to be more expensive in the future. As such, we may be forced to pay unattractive interest rates, thereby increasing our interest expense, decreasing our profitability and reducing our financial flexibility if we take on additional debt financing.

Investors may not be able to participate in future issues or certain other equity issues of our Shares.

In the event that we issue new Shares, we may be under an obligation to offer those Shares to our existing Shareholders at the time of issue unless the approval of our Shareholders is obtained at a general meeting. If we elect to conduct a rights issue or certain other equity issues, we will have the discretion and may also be subject to certain regulations as to the procedures to be followed in making such rights available to Shareholders or in disposing of such rights for the benefit of such Shareholders and making the net proceeds available to them. In addition, we may not offer such rights to our existing Shareholders having an address in jurisdictions outside of Singapore.

Accordingly, certain Shareholders may be unable to participate in future equity offerings by us and may experience dilution in their shareholdings as a result.

We may not be able to pay dividends in the future.

Subject to the Companies Act and our Constitution, our Board of Directors has complete discretion as to whether to declare and distribute dividends. Our ability to declare dividends to our Shareholders in the future will be contingent on multiple factors, including our future financial performance, distributable reserves of our Company, current and anticipated cash needs, capital requirements, our ability to implement our future plans, contractual, legal and tax restrictions, regulatory, competitive, technical and other factors such as general economic conditions, demand for and selling prices of our products and services, the ability of our subsidiaries to distribute funds to us, and other factors exclusive to the facilities services industry. Our existing and future loan arrangements with any financial institutions may also limit when and how much dividends we can declare and pay out. Any of these factors could have a material adverse effect on our business, financial position and results of operations, and hence there is no assurance that we will be able to pay dividends to our Shareholders.

If we fail to meet applicable listing requirements, Nasdaq may delist our Shares from trading, in which case the liquidity and market price of our Shares could decline.

We cannot assure you that we will continue to be able to meet the continued listing standards of Nasdaq in the future. If we fail to comply with the applicable listing standards and Nasdaq delists our Shares, we and our Shareholders could face significant material adverse consequences, including:

The National Securities Markets Improvement Act of 1996, which is a federal statute, prevents or pre-empts the states from regulating the sale of certain securities, which are referred to as “covered securities.” Because we expect that our Shares will be listed on Nasdaq, such securities will be covered securities. Although the states are pre-empted from regulating the sale of our securities, the federal statute does allow the states to investigate companies if there is a suspicion of fraud, and, if there is a finding of fraudulent activity, then the states can regulate or bar the sale of covered securities in a particular case. Further, if we were no longer listed on Nasdaq, our securities would not be covered securities and we would be subject to regulations in each state in which we offer our securities.

We are an emerging growth company within the meaning of the Securities Act and may take advantage of certain reduced reporting requirements.

We are an “emerging growth company,” as defined in the JOBS Act, and we may take advantage of certain exemptions from requirements applicable to other public companies that are not emerging growth companies, including, most significantly, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act for so long as we remain an emerging growth company. As a result, if we elect not to comply with such auditor attestation requirements, our investors may not have access to certain information they may deem important.

The JOBS Act also provides that an emerging growth company does not need to comply with any new or revised financial accounting standards until such date that a private company is otherwise required to comply with such new or revised accounting standards. We do not plan to “opt out” of such exemptions afforded to an emerging growth company. As a result of this election, our financial statements may not be comparable to those of companies that comply with public company effective dates.

We qualify as a foreign private issuer and, as a result, we will not be subject to U.S. proxy rules and will be subject to Exchange Act reporting obligations that permit less detailed and less frequent reporting than that of a U.S. domestic public company.

Upon the closing of the IPO, we have been reporting under the Exchange Act as a non-U.S. company with foreign private issuer status. Because we qualify as a foreign private issuer under the Exchange Act, we are exempt from certain provisions of the Exchange Act that are applicable to U.S. domestic public companies, including (i) the sections of the Exchange Act regulating the solicitation of proxies, consents or authorizations in respect of a security registered under the Exchange Act; (ii) the sections of the Exchange Act requiring insiders to file public reports of their stock ownership and trading activities and liability for insiders who profit from trades made in a short period of time; and (iii) the rules under the Exchange Act requiring the filing with the SEC of quarterly reports on Form 10-Q containing unaudited financial and other specified information, or current reports on Form 8-K upon the occurrence of specified significant events. In addition, our officers, Directors and principal Shareholders are exempt from the reporting and “short-swing” profit recovery provisions of Section 16 of the Exchange Act and the rules thereunder. Therefore, our Shareholders may not know on a timely basis when our officers, directors and principal Shareholders purchase or sell our Shares. In addition, foreign private issuers are not required to file their annual report on Form 20-F until one hundred twenty (120) days after the end of each fiscal year, while U.S. domestic issuers that are accelerated filers are required to file their annual report on Form 10-K within seventy-five (75) days after the end of each fiscal year. Foreign private issuers also are exempt from Regulation Fair Disclosure, aimed at preventing issuers from making selective disclosures of material information. As a result of the above, you may not have the same protections afforded to shareholders of companies that are not foreign private issuers.

If we lose our status as a foreign private issuer, we would be required to comply with the Exchange Act reporting and other requirements applicable to U.S. domestic issuers, which are more detailed and extensive than the requirements for foreign private issuers. We may also be required to make changes in our corporate governance practices in accordance with various SEC and Nasdaq rules. The regulatory and compliance costs to us under U.S. securities laws if we are required to comply with the reporting requirements applicable to a U.S. domestic issuer may be significantly higher than the cost we would incur as a foreign private issuer. As a result, we expect that a loss of foreign private issuer status would increase our legal and financial compliance costs and would make some activities highly time consuming and costly. We also expect that if we were required to comply with the rules and regulations applicable to U.S. domestic issuers, it would make it more difficult and expensive for us to obtain and maintain directors and officers liability insurance, and we may be required to accept reduced coverage or incur substantially higher costs to obtain coverage. These rules and regulations could also make it more difficult for us to attract and retain qualified members of our Board of Directors.

We may lose our foreign private issuer status in the future, which could result in significant additional costs and expenses.

As discussed above, we are a foreign private issuer, and therefore, we are not required to comply with all of the periodic disclosure and current reporting requirements of the Exchange Act. The determination of foreign private issuer status is made annually on the last business day of an issuer’s most recently completed second fiscal quarter. We would lose our foreign private issuer status if, for example, more than 50% of our Shares are directly or indirectly held by residents of the United States and we fail to meet additional requirements necessary to maintain our foreign private issuer status. If we lose our foreign private issuer status on this date, we will be required to file with the SEC periodic reports and registration statements on U.S. domestic issuer forms, which are more detailed and extensive than the forms available to a foreign private issuer. We will also have to mandatorily comply with U.S. federal proxy requirements, and our officers, Directors and Major Shareholders will become subject to the short-swing profit disclosure and recovery provisions of Section 16 of the Exchange Act. In addition, we will lose our ability to rely upon exemptions from certain corporate governance requirements under the Nasdaq rules. As a U.S. listed public company that is not a foreign private issuer, we will incur significant additional legal, accounting and other expenses that we will not incur as a foreign private issuer, and accounting, reporting and other expenses in order to maintain a listing on a U.S. securities exchange.

There can be no assurance that we will not be a passive foreign investment company, or PFIC, for U.S. federal income tax purposes for any taxable year, which could result in adverse U.S. federal income tax consequences to U.S. holders of our Shares.

A non-U.S. corporation will be a PFIC for any taxable year if either (i) at least 75% of its gross income for such year consists of certain types of “passive” income; or (ii) at least 50% of the value of its assets (based on an average of the quarterly values of the assets, and looking through certain 25% or more-owned subsidiaries) during such year is attributable to assets that produce passive income or are held for the production of passive income, or the asset test. Based on our current and expected income and assets (taking into account the expected cash proceeds and our anticipated market capitalization), we do not presently expect to be a PFIC for the current taxable year or the foreseeable future. However, no assurance can be given in this regard because the determination of whether we are or will become a PFIC is a fact-intensive inquiry made on an annual basis that depends, in part, upon the composition of our income and assets. In addition, there can be no assurance that the Internal Revenue Service, or IRS, will agree with our conclusion or that the IRS would not successfully challenge our position. Fluctuations in the market price of our Shares may cause us to become a PFIC for the current or subsequent taxable years because the value of our assets for the purpose of the asset test may be determined by reference to the market price of our Shares. The composition of our income and assets may also be affected by how, and how quickly, we use our liquid assets and the cash raised in the IPO. If we were to be or become a PFIC for any taxable year during which a U.S. Holder holds our Shares, certain adverse U.S. federal income tax consequences could apply to such U.S. Holder. See section titled “Item 10. Additional Information — Taxation — United States Federal Income Tax Considerations” of this Annual Report.

Securities analysts may not publish favorable research or reports about our business or may publish no information at all, which could cause our stock price or trading volume to decline.

If a trading market for our securities develops, the trading market will be influenced to some extent by the research and reports that industry or financial analysts publish about us and our business. We do not control these analysts. As a newly public company, we may be slow to attract research coverage and the analysts who publish information about our securities will have had relatively little experience with us or our industry, which could affect their ability to accurately forecast our results and could make it more likely that we fail to meet their estimates. In the event we obtain securities or industry analyst coverage, if any of the analysts who cover us provide inaccurate or unfavorable research or issue an adverse opinion regarding our stock price, our stock price could decline. If one or more of these analysts cease coverage of us or fail to publish reports covering us regularly, we could lose visibility in the market, which in turn could cause our stock price or trading volume to decline and result in the loss of all or a part of your investment in us.

Item 4. INFORMATION ON THE COMPANY

A. History and Development of the Company

Corporate Structure

The structure of our Group as at the date of this Annual Report is as follows:

Corporate History

Our Company was incorporated on December 29, 2020 as a private company limited by shares under the name “Primech Holdings Pte. Ltd.”. On May 11, 2023, we changed our corporate name from “Primech Holdings Pte. Ltd.” to “Primech Holdings Ltd.”

In 2018, Sapphire Universe, one of our Major Shareholders, acquired Primech Services & Engrg Pte Ltd, A&P Maintenance and Acteef Cleaning, in three separate transactions. Each of these companies had, prior to their acquisition, already been operating for approximately 30 years or more. Historically, Primech Services & Engrg was focused on providing cleaning services to Singapore Changi Airport and educational institutions, while A&P Maintenance and Acteef Cleaning were focused on providing cleaning services to offices. In 2020, Sapphire Universe also acquired Maint-Kleen which was focused on providing conservancy services. The acquisitions by Sapphire Universe of Primech Services & Engrg, A&P Maintenance, Acteef Cleaning and Maint-Kleen have enabled our Group to provide a wide spectrum of cleaning services.

In the last three years, we have expanded our range of cleaning services to include cleaning of healthcare facilities, and we have also expanded into the provision of stewarding services. Through our customer service business, we provide customer service officers and F&B service crew to venues such as healthcare facilities, hotels and restaurants. We also launched our “HomeHelpy” application, an online portal which allows individual customers to book our cleaning services in homes and offices.

In 2020, A&P Maintenance and Primech Services & Engrg amalgamated to form Primech A&P, thereby consolidating financial resources and service capacity, and enabling us to tender and quote for larger projects.

On December 29, 2020, Sapphire Universe incorporated our Company to serve as the holding company for our Group.

In April 2021, our Company acquired a 80% stake in CSG, which is in the business of manufacturing chemical supplies, and a 100% stake in Princeston International, which is in the business of wholesale trading of cleaning supplies, ad hoc cleaning services and disinfection products. This further expanded our business to include the manufacture of certain cleaning supplies, both for our own use and for sale to third parties.

On November 22, 2021, our Company completed the acquisitions of our subsidiaries from Sapphire Universe as part of the Restructuring Exercise, pursuant to a restructuring agreement entered by and among the Company, our subsidiaries, and Sapphire Universe on November 11, 2021.

On November 22, 2021, Sapphire Universe, which previously held 100% of our Company’s capital stock, entered into an agreement to sell 1,212,500 shares, or 3.73% equity stake in the Company, to two unrelated investors.

Some key milestones of our Group are set out below:

For details of our principal shareholders’ ownership, please refer to the beneficial ownership table in “Item 6. Directors, Senior Management and Employees—E. Share Ownership.”

Corporate Information

Our principal executive office is located at 23 Ubi Crescent, Singapore 408579. Our phone number is +65 6286 1868.  

Investors should submit any inquiries to the address and telephone number of our principal executive offices. We maintain a corporate website at https://www.primechholdings.com. The information contained in, or accessible from, our website or any other website does not constitute a part of this annual report. Our agent for service of process in the United States is Cogency Global Inc., 122 East 42nd Street, 18th Floor, New York, NY 10168.

The SEC maintains a website at www.sec.gov that contains reports, proxy, and information statements, and other information regarding issuers that file electronically with the SEC using its EDGAR system.

B. Business Overview

OVERVIEW 

We are an established technology-driven facilities services provider in the public and private sectors operating mainly in Singapore. Our mission is to support businesses by improving lives and strengthening communities through our business practices and ethics. We operate primarily in Singapore which operations contributed approximately $72.0 million or 99.3%   of our total revenue in FY 2024, approximately $68.3 million or 98.9% of our total revenue in FY 2023, with the remainder from our operations in Malaysia and sales of products.

We provide the following services:

As a testament to the quality of our service, in 2022 and 2023  our subsidiaries Primech A&P and Maint-Kleen were awarded the Clean Mark Gold Award by the National Environment Agency of Singapore under its Clean Mark Accreditation Scheme. This scheme recognizes businesses that deliver high cleaning standards through the training of workers, the use of equipment to improve work processes, and fair employment practices.

Further details of our awards and accreditations are set out in the section titled “Item 4. Information on the Company — B. Business Overview— Awards and Accreditation” below. Our notable projects include the provision of services to Singapore Changi Airport Terminal 2, a Singapore multinational bank, Temasek Polytechnic, and Nanyang Technological University of Singapore.

As of June 30, 2024, our Group employed 2,744 employees. We believe it is crucial to maintain sufficient manpower to reduce the amount of services which are sub-contracted thus enabling us to standardize our service delivery and better manage operational risks. While we sub-contract certain services such as external façade cleaning, the majority of our services provided to customers are performed by our Group’s employees. Our sub-contractor costs amounted to approximately $2.7 million or 4.5% and   approximately $3.0 million or 5.1% of our total direct costs and expenses for FY 2024 and FY 2023, respectively.

Our name, “Primech”, was formed through a contraction of “Prime” and “Mechanization”. We believe that we are at the forefront of using technology to supplement and bolster our services.

OUR COMPETITIVE STRENGTHS

We believe our main competitive strengths are as follows:

We have a long and established track record and have achieved a high level of accreditation in the facilities services sector.

The environmental services industry in Singapore is highly fragmented. According to NEA’s List of Licensed Cleaning Businesses, there are over 1,500 cleaning companies licensed by the NEA as of April 1, 2024. We believe that we have been able to distinguish ourselves through, among other things, the long and established track record of our subsidiaries and the accreditations we have received.

Primech A&P was amalgamated from A&P Maintenance and Primech Services & Engrg, which have been operating for approximately 30 years or more. Primech A&P and Maint-Kleen thus have been able to secure long-term business relationships with their customers. See sections titled “Item 4. Information on the Company — B. Business Overview — Our Contracts and Portfolio” and “Item 4. Information on the Company — B. Business Overview— Awards and Accreditation” of this Annual Report for further details.

In relation to the FM02 workhead in respect of “Housekeeping, Cleansing, Desilting and Conservancy Services”, Primech A&P and Maint-Kleen holds an L6 grade registration (which is the highest possible grade), which qualifies it to tender for public projects of an unlimited value, and which we believe has placed us in a good position to undertake sizable contracts in the public sector. Our private sector customers may also take our workhead grading into consideration when evaluating our quotations. As a testament to the quality of our services, Primech A&P and Maint-Kleen have been awarded the Clean Mark Gold Award, which is the highest level of accreditation under the Enhanced Clean Mark Accreditation Scheme granted to cleaning businesses. The scheme recognizes businesses that deliver high cleaning standards through the training of workers, use of equipment to improve work processes, and fair employment practices. As of April 1, 2024, only 53 of the 1,541 NEA-licensed cleaning businesses in Singapore, including Primech A&P and Maint-Kleen, have a Clean Mark Gold Award status. See the section titled “Item 4. Information on the Company — B. Business Overview — Regulations” of this Annual Report for further details.

With our strong track record and high levels of accreditation, we believe that we are one of the top facilities services providers in Singapore. We believe that we are strongly positioned to maintain our market position through our adoption of technology and wide network of industry contacts, including sub-contractors.

We are able to provide a bundle of services to a wide spectrum of customers

We provide a broad spectrum of cleaning services both in the public and private sectors to a variety of customers including, Singapore Changi Airport, conservancy areas, hotels, common areas, educational institutions, integrated public areas, residential spaces, office facilities, industrial areas, retail stores and healthcare facilities. Our diversified customer mix ensures that we do not rely on any single customer for our revenue and enables us to better manage our business risks. For instance, when the spread of COVID-19 in 2020 led to a decrease in demand for our services at Singapore Changi Airport and in the hospitality industry, we pivoted to provide our services to healthcare facilities as well as increased disinfection services.

In addition to the provision of cleaning services, we have diversified into waste management and pest control services as well as customer services. Providing a bundle of services provides an additional convenience to our customers as they would liaise with a centralized service provider rather than multiple contractors. Further, the new FM01 workhead for “Facilities Management” requires contractors to provide at least two distinct maintenance services (for which we are able to provide cleaning and pest control services in-house), thus ensuring that we are able to continue tendering for public projects. Selected CRS registrations held by Primech A&P include the following:

We believe that our emphasis on having a trained workforce makes us more competitive in our industry

We believe that the training and development of our employees enables us to maintain and enhance our quality of solutions and services for the growth of our businesses and operations. In particular, we have been hiring a variety of employees from different sectors apart from the environment services industry such as the hires from the technological, finance, human resources and business development sectors in order to build up our key management personnel team.

Further, through our emphasis on the self-delivery of service, we seek to minimize outsourcing our services to sub-contractors, thus better controlling the level of our service, and complying with laws and regulations. As of March 31, 2024, our Group employed 2,934 employees. We provide various training and development programs for our employees according to their job requirements and functions to equip them with the relevant skills and knowledge. For example, 75% of our cleaners, team leaders and supervisors are trained in any two modules under the Environmental Cleaning Workforce Skills Qualification training framework. We also provide certain cleaners with in-house training through the HomeHelpy Training Center. See the section titled “Item 4. Information on the Company — B. Business Overview — Staff Training” for further details.

We have an experienced and stable management team

We have an experienced management team, led by Mr. Kin Wai Ho, our Chairman. A majority of our senior management team have been employed our subsidiaries for more than 17 years. We view their collective industry knowledge and extensive project management experience as valuable in establishing stable relationships with our customers as well as facilitating the submission of competitive tenders and believe that this has assisted us in securing numerous tenders over the years. We also believe that the experience of our management team has assisted us in our cost estimation for contracts during the tendering process which enables us to reduce situations of cost overruns.

OUR BUSINESS STRATEGIES AND FUTURE PLANS

Our business strategies and future plans are as follows:

Improve efficiency, expand service capacity, establish smart IoT service, and reduce environmental footprint through the use of technology

We actively explore opportunities to use technology to improve our day-to-day operating efficiency and expand our service capacity in the long run. This runs in line with the Singapore government’s vision for the environmental services industry as outlined in its Environmental Services Industry Transformation Map launched in December 2017, which has allowed us to benefit from various governmental grants and subsidies aimed at raising the operational efficiency and productivity of the environmental services industry in Singapore through technology adoption.

Our technology initiatives to date include the use of autonomous floor scrubbing robots equipped with real-time monitoring and self-docking capabilities to perform cleaning services. In addition, we introduced our “HomeHelpy” website and mobile application to allow individual customers to book our cleaning services, which has enabled us to expand into the B2C segment (from our primary B2B business), and we believe that there is opportunity to convert such ad hoc services into long-term service contracts in the future. Our “HomeHelpy” platform has more than 1,500 registered members as of March 2024, and has served more than 670 users since its inception.

In 2021, we collaborated with three companies to form a consortium to submit a tender bid to install EV charging infrastructure at various car parks in Singapore. The consortium was awarded the pilot tender by the government of Singapore to install EV charging stations in approximately 150 public car parks in the North and North-East regions in Singapore. In consideration, the consortium has to pay concession fees for the right to install and operate the EV charging points (at S$0.15/kwh) to the relevant government authorities. All EV charging stations have been installed as of March 31, 2024.

The consortium agreement documents provide that the Company and Charge+ are responsible for, among other things, the payment of all fees to the authorities, obtaining necessary government approvals, engaging local stakeholders, carrying out and completing the project, and providing the use of the charging infrastructure to the public. The Company shall also provide lead demand from our fleet of electric vehicles. Although we and our consortium collaborators are jointly and severally responsible to the relevant authorities for the due performance of the project, the consortium collaborators have executed the Deed of Confirmation pursuant to which Charge+ has agreed, at its own cost and expense, to carry out and complete all works in connection with this project, and pay all concession and other fees payable and due to the Singapore government in connection with this project. In exchange, Charge+ shall be entitled to all revenues received in connection with this project, and will have general day-to-day authority over the project’s operations. The Singapore government is not a party to the Deed of Confirmation and the Deed of Confirmation does not extinguish the Company’s obligations to the Singapore government. Therefore, if Charge+ was to default on its obligations with respect to these costs, we estimate that the financial obligations to be borne by the other three consortium collaborators (including us) would not exceed US$3.3 million (SGD 4.4 million) over the next twelve years, comprised of no more than US$1.5 million (SGD 2 million) for the installation of the remaining charging stations and operating costs of no more than US$150,000 (SGD 200,000) per year for the next twelve years.

In addition, we deployed 18 EV as of March 2024, and we hope to convert more or all of our fleet of cleaning machines to EV over time. We also have started to offer, on a limited basis, an EV charging function to our customers as a package in our services, which will be provided by a sub-contracted third party. We do not own or operate an EV charging function. We believe that eco-solutions will become increasingly important in the future in the face of climate change, and integrating eco-solutions into our portfolio will not only expand our service capabilities, but also will transition our business towards a more innovative model, and will ultimately help our business to keep pace with future technological advances.

Going forward, we intend to continue to seek out opportunities for collaboration with technology companies to develop innovations in the areas of cleaning services and facilities management. For example, we plan to explore the use of removable batteries in our cleaning robots to reduce downtime. We do not intend, however, to enter the EV conversion or EV charging businesses as a new service offering.

Over the next three years, we plan to replace and convert a portion of our existing fleet of cleaning machines with and to EVs and develop “green” chemicals that are more eco-friendly for use in our cleaning services. We believe that by integrating environmental sustainability into our business practices, we will be able to attract more customers and employees, and ultimately reap the benefits of more sustainable growth.

We have developed a baseline IoT-enabled cleaning management platform to support data-driven and on-demand cleaning operations since August 2023. This platform is undergoing continuous enhancement and has been deployed to a few cleaning projects. This system integrated commercial off-the-shelf IoT devices such as cameras and sensors to be deployed in a facility and/or on robots, which will evaluate and respond to various events to perform data driven functions or actions to assist our facility services with lower cost and more efficiency. We also intend to develop an autonomous toilet cleaning robots to alleviate the tedious manual toilet cleaning tasks. However, as the IoT service is a new area for us, our plan to build our own IoT system may not be successful or, even successful, may not be able to generate revenues for a period of time.

Expand our range of facilities services both organically and through suitable acquisitions

Historically, we have been able to quickly gain a foothold in certain customer markets (for example, conservancy areas and offices) through the acquisition of companies with an established track record in those markets. We intend to continue to pursue suitable opportunities for acquisitions, joint ventures and strategic alliances to expand our range of facilities services. Such opportunities could include areas that complement our business, such as waste management, gardening and landscaping, and pest management. We believe that building up a comprehensive suite of facilities services will enable us to maintain our competitive edge.

We also intend to grow our facilities services business organically by expanding our coverage to include segments of the market where we currently do not have a presence or only have a small presence, such as hospitals, industrial centers, data centers and cleanrooms.

We are also looking to expand our facilities services into the landscaping sector in order to meet the Singapore government’s demand to supply more parks and other spaces in Singapore in the future. The landscaping services we intend to carry out will cover horticultural maintenance, which comprises services such as weeding, fertilizing, mowing and irrigation works. This would also enable us to provide an additional maintenance service under the FM01 workhead prescribed by BCA.

In connection with the expansion of customer services, we may also provide security services to condominiums.

Explore business opportunities in the Southeast Asian region

We intend to establish ourselves as a regional player in the environmental services industry. While our operations are currently almost exclusively based in Singapore, we may expand our business to other countries in Southeast Asia. We believe that our corporate image, which could be enhanced upon attainment of the Listing, would attract other service providers in the regional environmental services industry to consider a collaboration with us, through which we can leverage on our corporate image and their local knowledge to establish a greater foothold in Southeast Asia.

OUR SERVICES

Facilities Services

Facilities services is our primary business segment, accounting for approximately $56.0 million or 77.2%    and approximately $55.8 million or 80.8% of our total revenue in FY 2024 and FY 2023, respectively. Our main customers in this segment include conservancy areas, educational institutions and Singapore Changi Airport. The range of facilities services we offer includes the following:

Stewarding Services

Stewarding services accounted for approximately $10.2 million or 14.0%   and approximately $7.6 million or 11.0% and of our total revenue in FY 2023 and FY 2024, respectively. Stewarding services comprise the provision of kitchen cleaning services and the supply of customer service officers and F&B service crew. Our main customers in this segment are healthcare facilities, hotels and other hospitality venues, and restaurants. The tasks we perform include:

Cleaning Services to Offices

In addition to our core facilities services, we provide cleaning services to offices. The provision of office cleaning services accounted for approximately $5.9 million or 8.1%   and approximately $4.9 million or 7.1%of our revenue in FY 2024 and FY 2023, respectively.

Technology

“HomeHelpy” website and mobile application for home and office cleaning services

In order to facilitate outreach to more customers, we have created a mobile application for our customers through “HomeHelpy” as well as a website at https://www.homehelpy.com which is a home, office and specialized cleaning services portal that allows customers to create bookings for cleaning services on-demand. Our “HomeHelpy” mobile application and website accounted for less than 1.0% of our total revenue in each of FY 2024 and FY 2023. Our “HomeHelpy” platform has more than 1,500 registered members as of March 2024, and has served more than 670 users since its inception.

Upon downloading our “HomeHelpy” mobile application or visiting our HomeHelpy website, customers are able to select their preferred service from a variety of home cleaning, office cleaning and specialized cleaning services (such as marble polishing, upholstery cleaning, carpet cleaning, and disinfection). We also offer customizable add-on services such as clothes ironing, refrigerator cleaning, bedsheet changing, microwave cleaning, cooker hood cleaning, oven cleaning, and air purification.

Under our home cleaning services, we offer two types of packages: classic (where customers are to prepare the cleaning tools and consumable materials to be used during the cleaning session) and premium (a more expensive package, where customers only have to prepare the cleaning tools).

Advance payment is required to confirm a booking, and we charge a cancellation fee of 50% of the booking price if the customer cancels the booking 12 to 24 hours before the service commences. There is no refund for bookings cancelled less than 12 hours before the service. Customers are able to reschedule their booking through our mobile application or website provided that it is at least 24 hours before the service commences.

Our HomeHelpy services can be engaged on a one-time basis, or on a recurring basis, such as weekly or fortnightly. Upcoming and past appointments can be monitored both by our customer as well as us through the relevant online portal. This provides our customers with the flexibility to manage their appointments, and enables us to better understand the demands of our customers.

Our employees, or HomeHelpers, undergo a training program, which they must pass before they may be deployed to provide cleaning services for our customers. Through our training program, we are able to ensure that our HomeHelpers possess the required hard and soft skills for the job and that cleaning procedures are standardized, thus enabling us to maintain high service and quality standards.

In the near future, we intend to upgrade our mobile application to include additional functions such as the option to purchase cleaning products from us through the application. In addition, we intend to expand our services offered through HomeHelpy to include services such as disinfection and air conditioner servicing.

Cleaning robots

In order to supplement and bolster our provision of facilities services, we utilize a fleet of cleaning robots, which we purchase from third parties. The following summarizes the types of our cleaning robots as of March 31, 2024:

Description		Illustration
Robotic scrubber cleaners robots (large)
Robotic scrubber cleaners (small)

Robotic scrubber cleaners can be remotely controlled to schedule cleaning at specific times, and can also be programmed to self-dock at designated recharge locations. These robots are also equipped with real-time monitoring and also collect reporting data on the state of the cleaning sites, which allows us to monitor and make adjustments to cleaning schedules so as to optimize our resources.

Other Technology Initiatives

Our cleaners also input their daily cleaning records through mobile applications which alert them as to their required daily jobs, as well as urgent ad-hoc tasks. These mobile applications also provide management with daily updates as to our operations.

We also implement technological aids at certain of our key customers. For instance, at Temasek Polytechnic, we have installed in-toilets motion sensors which detect traffic flow. An alert is sent out to the relevant cleaner if more than 20 individuals have entered the premises in a given period of time. There are also ammonia sensors which trigger the air fresheners and hand soap, as well as toilet paper sensors which alert our cleaners as and when such supplies have to be refilled.

Through the use of such technology, we are able to more effectively utilize our cleaning staff and provide a higher and more consistent level of cleanliness to our customers.

Sale of Cleaning Supplies

We acquired CSG, a manufacturer of cleaning supplies, and Princeston International, a company engaged in the wholesale trading of cleaning supplies, in 2021. The sale of cleaning supplies accounted for less than 1.0% of our total revenue in FY 2024 and FY 2023.  

Through CSG, we manufacture a variety of cleaning supplies such as hand soaps, hand soap dispensers, and cleaning fluids used for general, floor, carpet, restroom or kitchen purposes, as well as treatment products used in the marine industry. We sell our cleaning supplies, primarily marketed under the brand “D’Bond”, to business customers in Singapore, such as other facilities services providers.

Through Princeston International, we sell floor mats and cleaning supplies such as hand soap and garbage bags.

Our cleaning supplies production facility is located on leasehold land at 50 Tuas Avenue 11, Singapore 639170. The use of the property is industrial.

OUR CONTRACTS AND PORTFOLIO

We typically enter into service contracts for a term of two to four years. Certain service contracts contain a provision giving the customer an option to renew for an additional term of typically two years. Our service contracts may be in respect of solely cleaning services or a mixture of cleaning, waste management and pest control services. Depending on the customer’s requirements, we may charge our customers based on input (i.e. an agreed number of employees to the delivery of the given service at a set cost price plus a margin) or based on output (i.e. achieving the level of performance required by the customer).

We believe our strong track record and high levels of accreditation have allowed us to secure notable projects. Our customers include but not limited to the following: Singapore Changi Airport, Nanyang Technological University and, Temasek Polytechnic.

Singapore removed most remaining COVID-19 travel restrictions as of April 26, 2022 and eased its entry requirements for travelers, in response to a decline in new daily infections. Singapore Changi Airport Terminal 2 has fully reponed as of November 2023 and our service for Changi Airport Terminal 2 arrival hall has resumed to the same scope to the period prior COVID-19 and the upgrading works. This contract was subsequently extended for a period of two (2) years from November 1, 2023 to October 31, 2025.

We were subsequently awarded another term contract for cleaning services at the airside general compound in Singapore Changi Airport for November 1, 2023 through October 31, 2026, with an option to renew for a further two (two) years. We undertake a comprehensive array of tasks, encompassing routine cleaning of airside facilities such as bin centers, sanitary disposal centers, fire stations, and ancillary buildings. Outdoors, our team conducts mechanical sweeping, refuse collection, and bay scrubbing across 200 parking stands and remote bays. We are also able to promptly address any hydraulic oil spillages, ensuring thorough cleaning of affected areas.

OUR BUSINESS OPERATIONS

The workflow of our business operations generally involves four stages, as summarized below:

In order to participate in public sector projects, we have to bid in open tenders through platforms such as GeBIZ (the Singapore government’s online procurement portal) and SESAMi (an electronic transaction hub in Asia). We may also receive requests for quotation in respect of private sector projects. These may be new projects, or calls for tenders and/or quotations upon the expiry of existing service contracts.

Upon receiving an invitation to tender or a request for quotation, we would first make a preliminary assessment of the requirements of the tender or quotation, taking into account (among other things) our available resources and whether there is a need to engage sub-contractors. We may conduct a site visit in order to gather more information on the details of the invitation to tender or request for quote. Based on this assessment, we would prepare a project dossier, and consider whether to submit a tender bid or provide a quotation.

Depending on the materiality of the tender and/or quote, a submission could be reviewed and endorsed by our Executive Officers before being submitted to the customer for consideration.

Once we have received the letter of award or an equivalent confirmation indicating that our tender or quotation has been accepted, a joint taskforce project start-up team will be formed comprising, among others, a project manager who has experience in managing projects of a similar risk profile as the tender/quotation in question, a representative from each of the administrative and human resources departments (who will arrange for contract insurance and performance bonds (if any) to be prepared prior to the commencement of the service contract, and for recruitment and/or training), a business development professional (who will check the service contract documentation and set up a new file with customer details), and an operations department professional (who will plan budgeting and procurement requirements and meet with the customer in order to clarify outstanding queries or issues relating to the site or venue).

Depending on the materiality of the tender and/or quote, the project manager may also submit a startup form to our executive officers for review.

Upon finalization of the foregoing, we will submit a master cleaning schedule to our customer for its reference.

We may allocate fixed cleaners at each project, depending on the size and complexity of the cleaning site. Typically 10 to 15 employees report to a supervisor, and 40 to 50 employees report to a manager based on our current master cleaning schedule.

Throughout the project lifecycle, our operations department will provide high-level supervision of the ongoing performance of our employees, our customers, the cleaning services rendered, and the disposal of waste.

Within the first three months of an executed project, the project may be subjected to an internal assessment to ensure that the implementation of operations has conformed to the project plan.

Apart from the internal assessment, the project will also be subjected to routine QEHS inspections and audits. In order to ensure compliance and that the project budget is kept to, the project manager and accounts manager for the project will closely monitor the performance of the project. Invoices are also submitted to the customer on a regular basis.

The performance of the project will be periodically reviewed by the project manager and the senior management team. Critical intervention in the project may take place as and when needed to ensure that the project is operating within the acceptable and previously set out parameters. As part of making continual improvements to the project, the audit findings will also be discussed by the project manager and other relevant stakeholders.

As the project approaches the end of its life-cycle, the project manager and the senior management team will also conduct a comprehensive project review. This project review will form the basis for any decisions to take up any offer to re-tender or requote for the same project, if our Company is provided the opportunity.

MARKETING AND BUSINESS DEVELOPMENT

Our Group is primarily engaged in business-to-business (“B2B”) customer dealings. Our marketing and corporate development activities are led by Mr. Khazid bin Omar, our Senior Vice President, Corporate Services, and Mr. Yew Jin Sng, our Senior Vice President of Business Development. The business development team supports our Group’s sales and marketing efforts by approaching new customers, fostering long-term and strong relationships with existing customers, and generating and concluding new sales and service contracts.

We market our services actively through both traditional media (for example, print and radio advertisements) and new media (for example, search engine optimization and targeted advertising). We also participate in tradeshows and networking events, and we organize public relations activities with the media.

In terms of business development, we target large-scale projects (for example, involving conservancy areas or educational institutions) to boost our portfolio and our profile in the industry. We are registered on various tender platforms (in respect of public projects) such as GeBIZ and SESAMi. We monitor these portals for suitable tenders put up by the respective Singapore government agencies, and we also monitor newspaper advertisements for both public and private tenders.

Our “HomeHelpy” website and mobile application also enables us to market our cleaning services to individual customers. Through this business-to-customer (B2C) platform, we are able to expand our scope of coverage to include individual homes and offices.

OUR MAJOR CUSTOMERS

Our major customers which accounted for 5.0% or more of our Group’s total revenue for FY 2024 and/or FY 2023 are as follows: 

Except as disclosed above, our Directors are of the view that, as of March 31, 2024, our business and profitability are not materially dependent on any of our customers. To the best of our Directors’ knowledge, we are not aware of any information or arrangement which would lead to a cessation or termination of our current relationship with any of our major customers.

As at the date of this Annual Report, none of the Directors or Major Shareholders of our Company or their respective associates has any interest, direct or indirect, in any of our customers.

OUR MAJOR SUPPLIERS

Direct cost of revenue for FY 2024 and FY 2023 amounted to approximately $59.9 million and $58.4 million, respectively. Approximately $5.5 million and $5.6 million of supplies purchases and sub-contractor costs were included in direct cost of revenue in FY 2024 and FY 2023, respectively. Our major suppliers (including sub-contractors) which accounted for 5.0% or more of our Group’s total supplies purchases and sub-contractor costs for FY 2024 and/or FY 2023 are as follows:

Except as disclosed above, our Directors are of the view that, as of March 31, 2024,   our business and profitability are not materially dependent on any of our suppliers. To the best of our Directors’ knowledge, we are not aware of any information or arrangement which would lead to a cessation or termination of our current relationship with any of our major suppliers.

As of the date of this Annual Report, none of our Directors or Major Shareholders or their respective associates has any interest, direct or indirect, in any of our major suppliers.

INSURANCE

As at the date of this Annual Report, certain of our subsidiaries have taken out group hospital and surgical policies, foreign worker medical policies, and performance bond insurances, in respect of our employees, as well as insurance in accordance with WICA. We may be required to take up additional insurance policies in compliance with specific customer requirements as well. Such additional insurance include public liability insurance.

The above insurance policies are reviewed annually to ensure that our Group has sufficient insurance coverage. Our Directors believe that we have adequate insurance coverage for the purposes of our business operations and we will procure the necessary additional insurance coverage for our business operations, properties and assets as and when the need arises.

INTELLECTUAL PROPERTY

Our Group’s intellectual property rights are important to our business and as of the date of this Annual Report, the Group has registered the following trademarks:

Trademark		Jurisdiction		Class		Trade Mark Number		Expiry Date
		Singapore		03(1)		40202103768S		February 17, 2031
		Hong Kong		03(2)		305537043		February 17, 2031
		Japan		03(3)		6414416		July 8, 2031
		Thailand		37(4)		200102313		January 19, 2030
		Singapore		37(5)		40202000868W		January 13, 2030
		European Union		37(6)		018179388		January 10, 2030

Notes:

Save as disclosed above, our Group does not own or use any trademark, patent or other license which is material to our business or profitability.

LEGAL PROCEEDINGS

From time to time, we are a party to claims and legal proceedings arising in the ordinary course of business. Our management evaluates our exposure to these claims and proceedings individually and in the aggregate and provides for potential losses on such litigation if the amount of the loss is estimable and the loss is probable.

Except as disclosed below, to our knowledge, we believe that there are no material litigation matters at the current time (including any pending or known to be contemplated) which may have a material adverse effect on our business, financial condition or results of operations.

MOM Investigation in Relation to a Fatal Accident at Our Work Site

In 2019, A&P Maintenance was under contract to provide, among others, external façade cleaning services for an office tower. We appointed a sub-contractor, which in turn appointed its own sub-contractor, to carry out the façade cleaning works. The façade cleaning works were performed using a gondola. When not in use, the gondola was stored in a pit underneath floor slabs. When required for use, the floor slabs would be removed and the gondola would be elevated from the pit.

The façade cleaning works began in May 2019 and were expected to be completed by June 2019. In late May 2019, the works were halted due to an obstruction of the gondola tracks. During this time, the gondola was kept in the pit, however, part of the floor opening, around the gondola switch, was not covered.

The gondola pit was located in a rooftop area, where an independently owned bar was also located. In the early hours of June 9, 2019, a security officer working at the bar fell into the uncovered area of the gondola pit. The security officer died from the fall. The circumstances surrounding the fall were as follows: the security officer had been assigned to ensure that patrons of the bar did not enter a barricaded area (which included the area with the gondola pit). Two guests had pushed aside the barricades and entered the restricted area. Upon seeing the guests enter the restricted area, the security officer ran towards them. During this, the security officer accidentally fell into the uncovered area of the gondola pit.

Following the accident, the MOM commenced an investigation, which included interviews with certain of our management and employees. As a result of the said incident, two charges were brought against A&P Maintenance under Sections 20 read with Sections 14(3) and 14A(1)(b) of the WSHA, and one charge was brought against an employee of A&P Maintenance under Section 15(3A) of the WSHA. As of March 2, 2023, MOM has formally withdrawn its charge against the employee of A&P Maintenance. On 5 July 2023, A&P Maintenance pleaded guilty to the two charges. On August 18, 2023, a fine of $184,000 (S$245,000) was imposed on A&P Maintenance for the contraventions of the WSHA which has since been paid in full.

Other Legal Matters

In April 2024, the administrator and personal representative of a deceased person who had a fatal fall, brought a negligence claim against Jurong-Clementi Town Council, C&W Services Township Pte Ltd and Primech A&P. This claim which includes various heads of damage including but not limited to various expenses, loss of income and loss of dependency, is being handled by Primech A&P’s insurer, which has appointed an adjuster.

LICENSES

We are required under the relevant laws and regulations of Singapore and Malaysia to hold certain licenses in order to conduct our business operations.

As of the date of this Annual Report, our Group holds the following licenses:

Save as disclosed herein, we do not require any other material licenses, registrations, permits or approvals in respect of our operations apart from those pertaining to general business registration requirements. See section titled “Item 4. Information on the Company—B. Business Overview — Regulations” for further details on the licensing requirements applicable to us under relevant laws and regulations. We regularly apply on a timely basis for extensions on all our licenses listed below. See section titled “Item 4. Information on the Company—B. Business Overview — Regulations.”

PROPERTIES AND FIXED ASSETS

As at the date of this Annual Report, (a) Primech A&P holds a sixty (60) year leasehold interest in 23 Ubi Crescent Singapore 408579 (expiring July 2057) with an area of 420.6 sq. m. and a sixty (60) year leasehold interest in 25 Ubi Crescent Singapore 408580 (expiring July 2057) with an area of 420.7 sq. m., and (b) CSG Industries holds a thirty (30) years interest (expiring in February 2038) in 50 Tuas Avenue 11 #01-22 Tuas Lot Singapore 639107. We have leased additional small offices in other Singapore and Malaysia cities.

On April 27, 2021, Primech A&P completed the acquisition of leasehold interest in 23 and 25 Ubi Crescent Singapore for approximately $6.7 million. The purchase price consisted of cash consideration of approximately $1.7 million and a loan obtained from the Lender of approximately $5.0 million.

To the best of our Directors’ knowledge and belief, there are no regulatory requirements or environmental issues that may materially affect our Group’s utilization of tangible fixed assets.

Pursuant to the terms of the leases entered into by our Company and/or relevant subsidiary, the lessor is entitled to unilaterally terminate the relevant lease in the event of, unpaid rent after a prescribed period, any breach of conditions, covenants or stipulations in such lease, or in the event of liquidation of the tenant. Our Directors are of the view that any unilateral termination by any lessor is unlikely to have a material impact on our Group’s business or operations as we believe that we will be able to secure leases for alternative premises in the event of such termination.

STAFF TRAINING

From time to time, we may send our employees who require specialized training to industry related courses and have sponsored our employees in their pursuit of higher education and development. We conduct specific training to equip our employees in our finance, administration and human resources departments with the relevant skills and knowledge to meet their job requirements. Such training includes in-house training conducted by our senior employees as well as training conducted by external speakers or consultants. Depending on the job requirements, we will also support our employees in these departments when they register for external courses.

The Singapore Workforce Skills Qualifications (“WSQ”) is a national credential system that trains, develops, assesses and certifies skills and competencies for the workforce. In particular, the Environmental Cleaning WSQ training framework caters to the training of cleaning crew, stewards and supervisors in the commercial and private residential cleaning, and public cleaning subsectors. In particular, as a requirement of our Clean Mark Awards, as of March 31, 2024:  

In 2019, Primech A&P also signed a memorandum of undertaking with BATU (the Building Construction and Timber Industries Employee’s Union), e2i (the Employment and Employability Institute) and NTUC LearningHub (an affiliate of NTUC, the National Trades Union Congress in Singapore) to form a Company Training Committee which seeks to train our employees to have better job prospects by being ready for new technology and business models.

We also have a HomeHelpy Training Center for our employees working under “HomeHelpy”. The training center replicates an average home, with the necessary furnishings such as beds, stove, kitchenware etc. enabling our employees to hone their skills before they render services. In the future, we also intend to use this center to provide training in connection with specialized cleaning services such as cleaning of healthcare facilities, cleanrooms and data centers, as well as customer services. We also train employees to function as internal assessors and inspectors to ensure quality control of our cleaning services.

AWARDS AND ACCREDITATIONS

The following is a description of the material accreditations we have received: 

Set out below is a list of the awards and accreditations our Group has received:

QUALITY CONTROL AND ASSURANCE

Our subsidiaries have obtained various ISO accreditations in relation to our quality management and OH&S systems, as described under the section titled “Item 4. Information on the Company—B. Business Overview — Awards and Accreditations”.

On a day-to-day management basis, our site supervisors and foremen are responsible for checking that our employees have complied with our procedures and guidelines regarding workplace safety and quality control during the course of the work on site. In the event that there are complaints from our customers, our site supervisors and foremen will typically rectify any such issues on site immediately. Given that our services involve a large workforce and that a substantial part of our services are provided in connection with public areas, our Directors believe that complaints from customers or members of the public are not uncommon in our industry. In the event that a written complaint is received, we will record the complaint and detail any remedial/corrective steps taken and forward the same to the responsible operations manager. Depending on the nature of the complaint — whether it related to quality of services or other environmental, health or safety issues, the operations manager shall decide on the appropriate responses or follow-up measures to take, oversee their implementation and follow up with the customer accordingly.

ENVIRONMENTAL MATTERS

Our Group’s environmental impacts are managed by our Environmental, Occupational Health & Safety (EHS) team, under Human Resource department which administers our ISO 14001:2015 certified environmental management system and ensures that our Group is compliant with all applicable environmental laws and regulations. We employ the following measures to ensure compliance and mitigate the environmental impact across our business services:

Primech A&P is also currently a member of the Environmental Management Association of Singapore (“EMAS”). EMAS was established by service providers from contract cleaning, waste management and pest control industries, with an aim to provide a cohesive platform for companies in the environmental industry to raise the professionalism of the industry and to address the common concerns of environmental and hygienic services.

RESEARCH AND DEVELOPMENT

Our research and development expenses were not significant in FY 2024 and FY 2023.  

We are currently exploring the potential of applying EV charging technology, in particular the use of lithium-ion batteries, to our cleaning robots. Our cleaning robots are currently powered by lead acid batteries, which have long charge times and are less efficient than the lithium-ion batteries designed to be used in EVs. To this end, we are collaborating with Oyika Pte. Ltd., a company that builds battery swap and charging infrastructure for EVs, to develop swappable lithium-ion batteries for use in our cleaning robots, which will allow them to operate for a longer period of time (e.g., by way of replacing batteries) as compared to our current robots, which have to be charged during the day. At the same time, we intend to incorporate smart sensors to track performance and efficiency. We do not own or operate an EV charging function.

ESTIMATED REVENUES UNDER CONTRACT

As of March 31, 2024, our contracted revenues for future fulfilment by our Group were approximately $144.4 million (S$194.5 million). The following table sets forth a breakdown of the value of our contracted revenues which we estimate to fulfil in FY 2025, FY 2026 and FY 2027 onwards, subject to cancellations or other contractual changes which are not presently foreseeable: 

Our order book as at any particular date is not indicative of our revenue for succeeding periods as secured contracts are subject to cancellations, deferral or early termination by our customers.

CORPORATE SOCIAL RESPONSIBILITY

We seek to improve lives and strengthen communities by fostering civic engagements through service and volunteerism. To this end, we have undertaken several corporate social responsibility initiatives, such as:

As part of our sustainability policy, we also, among others, practice recycling, avoid using paper products where unnecessary, and we use products with a lower environmental impact (e.g. ecolabels) in providing our cleaning services.

Our Directors intend to establish a corporate social responsibility policy which will formally address our Group’s impact on the local community.

COMPETITION

We operate in a competitive environment and face competition from new and existing competitors based in Singapore and elsewhere. In particular, the cleaning industry we operate in is highly fragmented with low barriers to entry. As of April 1, 2024, there were over 1,500 cleaning companies licensed by the NEA in Singapore. We believe that our primary competitors are large environmental services companies with an established presence in Singapore, such as the ISS Group, 800 Super Holdings, Weishen Industrial Services, Chye Thiam Maintenance Pte Ltd, Hygieia Group Limited and Ramky Cleantech Services Pte Ltd.

We believe that our competitive edge comes from our positioning as an innovative company and the quality of our services, which have allowed us not only to secure contracts with large organizations such as Singapore Changi Airport, educational institutions and large commercial banks, but also to maintain long-term relationships with these customers.

EMPLOYEES 

As of June 30, 2024, our Group had a workforce of 2,744, comprising employees who are all located within our offices in Singapore and Malaysia.

There were no material changes to the number of employees hired by our Group in the last three financial years, save that the number of employees increased from 2,400 as of March 31, 2021 to 2,744 as of June 30, 2024, primarily due to increase in projects serviced by our Group which result in increase in number of personnel to perform these services. As of March 31, 2024, none of our employees are related to our Directors and Major Shareholders. Any new employment of related employees and the proposed terms of their employment will be subject to the review and approval of our Compensation Committee. In the event that a member of our Compensation Committee is related to the employee under review, he will abstain from the review.

We do not employ a significant number of temporary employees. A certain number of our employees are members of the Building Construction And Timber Industries Employees Union. The rest of our employees are not unionized. The relationship and co-operation between the management and staff have been good and are expected to continue and remain as such in the future. There has not been any incidence of work stoppages or labor disputes which affected our operations.

RECENT DEVELOPMENTS

We incorporated new subsidiaries, Primech AI Holdings Limited (“PAHL”) and Primech AI Investments Limited   on March 28, 2024. PAHL entered into a memorandum of understanding with an independent third party on April 16, 2024, which we will jointly introduce an eco-friendly and fully automatic artificial intelligent-powered toilet cleaning robot. On May 29, 2024, Primech AI Pte. Ltd. was set up, Primech Holdings Ltd. hold 51% interest in the Primech AI Pte. Ltd.

REGULATIONS 

We are subject to all relevant laws and regulations of Singapore and Malaysia and may be affected by policies which may be introduced by their respective governments from time to time. We have identified the main laws and regulations (apart from those pertaining to general business requirements) that materially affect our operations, including the licenses, permits and approvals typically required for the conduct of our business, and the relevant regulatory bodies, below.

As of the date of this Annual Report, our Directors believe that we are not in breach of any laws or regulations applicable to our business operations that would materially affect our business operations, and our Group is in compliance with all the applicable laws and regulations that are material to our business operations. The Group may be subject to certain fines/penalties arising from its ordinary course of business from time to time.

Singapore

Environmental Public Health Act 1987 of Singapore (the “EPHA”) and the Environmental Public Health (General Cleaning Industry) Regulations 2014 (the “EPH Regulations”)

In order to regulate and upgrade the cleaning standards and productivity in the cleaning industry in Singapore, the EPHA was amended to require the licensing of cleaning businesses, in particular, requiring the training of cleaners and the payment of progressive wages to cleaners to ensure a more engaged cleaning workforce and the retention of a core of resident cleaners.

Pursuant to Section 80D of the EPHA, no person shall carry on a cleaning business in Singapore, except under and in accordance with a cleaning business license that is in force. A “cleaning business” means a business, whether or not the business is carried on for profit, (a) in which a person carries out cleaning work for other persons through the services of cleaners engaged or employed by that person; or (b) of supplying cleaners to other persons. “Cleaning work” means work carried out in Singapore that has, as its main or only component, the bringing of premises or any public place into, or keeping of premises or any public place in, a clean condition, and includes supervising the carrying out of such work but excludes any work that the Minister declares, by notification in the Gazette, not to be cleaning work.

Any person who contravenes Section 80D(1) of the EPHA shall be guilty of an offence and shall be liable on conviction to a fine not exceeding S$10,000 or to imprisonment for a term not exceeding 12 months or to both and, in the case of a continuing offence, to a further fine not exceeding S$1,000 for every day or part thereof during which the offence continues after conviction.

Pursuant to Section 80G of the EPHA read with the EPH Regulations, the applicant shall be eligible for a cleaning business license if:

Where an applicant applies for a grant or renewal of a class 1 cleaning business license, the EPH Regulations has prescribed requirements which include, amongst other requirements, that the applicant holds a bizSAFE Certification of level 3 or a higher level.

Such other requirements that have been prescribed under the EPH Regulations include that as at the date of the application for a class 2 or class 3 cleaning business licence, the applicant must have at least one (1) officer or employee who:

Every progressive wage model in respect of a cleaning business of a licensee or an applicant for a cleaning business license (“Progressive Wage Model”) must:

See section titled “Item 4. Information on the Company—B. Business Overview — Regulations — Progressive Wage Model” for further details.

From 1 January 2024 onwards, a cleaning business license is valid for two years and renewable every two years (with the exception of class 3 cleaning business licenses). As of March 31, 2024, the details of the cleaning business licenses held by our Group were as follows:

Pursuant to Section 80H of the EPHA, read with the EPH Regulations, every cleaning business licence is subject to prescribed conditions which are, among others:

specified by order by the Commissioner for Labour under Section 80H(2) for the class of cleaners that the resident cleaner belongs to;

If the conditions of the cleaning business license are not met, the Director-General may revoke any such cleaning business license, suspend the cleaning business license for such period of time (not exceeding six months) as the Director-General thinks fit; or impose such other directions or restrictions as the Director-General considers appropriate on the licensee’s cleaning business in Singapore, including imposing different conditions for different classes of cleaning business licences or cleaning business licensees under different circumstances.

Environmental Protection and Management Act 1999 of Singapore and the Environmental Protection and Management (Hazardous Substances) Regulations

The Environmental Protection and Management Act, or the EPMA, and the regulations thereunder govern environmental pollution control and the protection and management of the environment and resource conservation in Singapore.

Certain of the cleaning solutions and chemicals we use in our cleaning and pest control operations are considered “hazardous substances” under the EPMA and are subject to regulatory control. In particular, pursuant to Regulation 17 of the Environmental Protection and Management (Hazardous Substances) Regulations, a person shall not use, keep or have in his possession or under his control any of the specified hazardous substances under the regulations, unless he is authorized to store and use such hazardous substances. In addition, the storage and use of the hazardous substance must be effected in accordance with the provisions of the permit and any condition specified therein.

Non-compliance with the relevant requirements under the Environmental Protection and Management (Hazardous Substances) Regulations constitutes an offence and may result in fines or imprisonment.

As of March 31, 2024, our Group holds a permit to store and use hazardous substances under Regulation 17 of the Environmental Protection and Management (Hazardous Substances) Regulations, as follows:

Further, CSG also holds a Factory Notification Confirmation issued by MOM enabling it to carry out production, packaging and storage of detergents and cleaners, and a license for explosive precursors issued by the Singapore Police Force for the period between August 30, 2023 to August 29, 2025.

CSG also has the right to use the Singapore Green label for the D’Bond brand in respect of multi-purpose cleaners for the period between February 28, 2020 to February 27, 2026. CSG also has the right to use the Singapore Green label for the D’Bond brand in respect of hand soap between April 29, 2022 to April 28, 2026.

Enhanced Clean Mark Accreditation Scheme

The cleaning business license sets the entry-level standards for cleaning businesses, while accreditation under the Enhanced Clean Mark Accreditation Scheme aims to differentiate the quality of services provided by cleaning businesses. With the implementation of a revised Cleaning Business Licensing framework from 1 January 2024, the National Environment Agency of Singapore has indicated that it will cease the issuance and applications of Enhanced Clean Mark Accreditation Scheme.

There are two levels of award under the scheme; namely the Clean Mark Silver Award and the Clean Mark Gold Award. As of March 31, 2024, the details of the Clean Mark awards held by our Group were as follows:

The accreditation criteria for the Clean Mark Gold Award includes, among others:

Progressive Wage Model (“PWM”)

Cleaning companies must satisfy the PWM wages and training requirements for cleaners who are Singapore citizen and permanent resident cleaners. These were minimum basic wages imposed by Ministry of Manpower which will increase from July 1, 2020 to June 30, 2029. A mandatory PWM bonus is payable to certain cleaners as well. The cleaning business must pay the PWM bonus at least once but no more than twice in a calendar year.

The remuneration of our Singapore citizen and permanent resident cleaners are in compliance with the Progressive Wage Model.

Environmental Public Health (General Waste Collection) Regulations

Pursuant to the Environmental Public Health (General Waste Collection) Regulations, any person who wishes to carry on the business of (a) collecting or transporting general waste for payment or other remuneration (whether monetary or otherwise) or (b) collecting or transporting from any food establishment used cooking oil, may apply for a general waste collector’s license.

There are various classes of licenses. In particular, Class A general waste collection licenses relate to the collection of inorganic waste (e.g. construction and renovation debris, tree trunks and branches, furniture disposal, electrical appliances, wooden crates, pallets and other bulky items for disposal) and recyclable waste (excluding food waste).

A general waste collection license is valid for one year and renewable on a yearly basis. As of March 31, 2024, the details of the general waste collection licenses held by our Group were as follows:

Pursuant to Regulation 7AA of the Environmental Public Health (General Waste Collection) Regulations read with Section 99(15) of the EPHA, where a licensee (a) is in breach of any restriction or condition subject to which the licence was granted or (b) has contravened any provision of the EPHA, the Director-General may suspend or cancel the licence; and in the case of (a), the Director-General may in lieu of or in addition to suspending or cancelling the licence, impose a financial penalty of any amount, not exceeding $5,000, unless the breach in (a) is an offence under the EPHA.

Any person who contravenes or fails to comply with any of the provisions of the Environmental Public Health (General Waste Collection) Regulations shall be guilty of an offence and shall be liable on conviction to a fine not exceeding S$10,000 and, in the case of a continuing offence, to a further fine not exceeding S$500 for every day during which the offence continues after conviction.

Control of Vectors and Pesticides Act 1998 of Singapore (the “CVPA”)

Under Section 2 of the CVPA, a vector control operator refers to a person who, in the course of any trade or business, undertakes or engages any work carried out for the purpose of the destruction, or prevention of the propagation or harboring, of any insect, including its egg, larva and pupa, and any rodent, including its young, carrying or causing, or capable of carrying or causing any disease to human beings. Under Section 24 of the CVPA, no person shall in the course of any trade or business, undertake or engage in vector control work or advertise or otherwise hold himself out as a vector control operator unless he is registered as a vector control operator under the CVPA.

Under Section 30(1) of the CVPA, the registration of a vector control operator, vector control technician’s license and vector control worker’s certificate are each valid for three years from its date of grant. As of March 31, 2024, the details of the cleaning business licenses held by our Group were as follows:

Any person who undertakes any trade or business, or engages in vector control work without registration shall be guilty of an offence and shall be liable on conviction to a fine not exceeding S$20,000 or to imprisonment for a term not exceeding three (3) months or to both and, in the case of a second or subsequent conviction, to a fine not exceeding S$50,000 or to imprisonment for a term not exceeding six (6) months or to both.

Contractors Registration System

The BCA administers the “CRS” which serves the procurement needs of Singapore government departments, statutory bodies and other public sector organizations including first level sub-contractors involved in Singapore government projects. Registration of a contractor with the BCA and the grade assigned to it is dependent on the contractor fulfilling the requisite grade requirements relating to, among others, track record, financial capacity, management certifications, and personnel qualifications.

In particular, a contractor may be registered under the following facilities management workheads with BCA:

The following table sets out the current registrations of our subsidiaries in the CRS as of March 31, 2024.

The tendering limit for projects in the public sector is determined by one’s qualified grade under the CRS.

The tendering limits under the FM01 are as follows:

The tendering limits under the FM02 to FM04 Workheads are as follows:

In order to apply for, maintain and renew the registrations under the CRS, there are different requirements to be complied with for different grades, including but not limited to, requirements relating to minimum paid up capital and net worth, employment of certain personnel with prescribed qualifications, and track record of past and current projects.

Workplace Safety and Health Act 2006 of Singapore (the “WSHA”)

The WSHA provides that every employer has the duty to take, so far as is reasonably practicable, such measures as are necessary to ensure the safety and health of (a) his employees at work and (b) persons (not being his employees) who may be affected by any undertaking carried on by him in the workplace. These measures include, but are not limited to: (i) providing and maintaining for such persons a work environment which is safe, without risk to health, and adequate as regards to facilities and arrangements for their welfare at work; (ii) ensuring that adequate safety measures are taken in respect of any machinery, equipment, plant, article or process used by such persons; (iii) ensuring that such persons are not exposed to hazards arising out of the arrangement, disposal, manipulation, organization, processing, storage, transport, working or use of things in their workplace or near their workplace and under the control of the employer; (iv) developing and implementing procedures for dealing with emergencies that may arise while such persons are at work; and (v) ensuring that such persons at work have adequate instruction, information, training and supervision as is necessary for them to perform their work.

Under the WSHA, the Commissioner for Workplace Safety and Health (“Commissioner”) may serve a remedial or a stop-work order in respect of a workplace, for contravention or omission of any WSHA-specified condition.

Workplace Safety and Health (Incident Reporting) Regulations (the “WSHIR”)

Under Regulation 4 of the WSHIR, where any accident at a workplace occurs which leads to the death of any employee, the employer shall, as soon as is reasonably practicable but no later than 10 days after the accident, submit a report to the Commissioner.

Under Regulation 6 of the WSHIR, where an employee meets with an accident at a workplace on or after September 1, 2020, and the employee is certified by a registered medical practitioner or registered dentist to be unfit for work, or to require hospitalization or to be placed on light duties, on account of the accident, the employer shall submit a report to the Commissioner of the accident within 10 days after the date the employer first has notice of the accident.

Work Injury Compensation Act 2019 of Singapore (“WICA”)

WICA provides that if any personal injury is caused to an employee by accident arising out of and in the course of the employee’s employment with an employer, the employer shall be liable to pay compensation in accordance with the provisions of WICA. Any employer who fails to insure himself in accordance with WICA shall be guilty of an offence and shall be liable to, on conviction, a fine not exceeding S$10,000 or to imprisonment for a term not exceeding 12 months or to both, or if the employer is a repeat offender, to a fine not exceeding S$20,000 or to imprisonment for a term not exceeding 12 months or to both.

In this regard, certain of our subsidiaries have obtained a contract for insurance in accordance with WICA, with the current term for most subsidiaries covering up until November 3, 2024.

Employment Act 1968 of Singapore (the “Employment Act”)

The rights of all employees employed under a contract of service with our subsidiaries are governed under the Employment Act in particular, their rights to annual leave, sick leave and maternity leave, amongst others. In respect of (a) workmen who receive salaries not exceeding S$4,500 a month and (b) employees (other than workmen or persons employed in a managerial or an executive position) who receive salaries not exceeding S$2,600 a month, the Employment Act governs additional aspects of their conditions of service such as hours of work, overtime and rest day, amongst others.

Employment of Foreign Manpower Act 1990 of Singapore (the “EFMA”)

The employment of foreign workers in Singapore is governed by the EFMA and regulated by MOM. In Singapore, under Section 5(1) of the EFMA, no person shall employ a foreign worker unless he has obtained in respect of the foreign worker a valid work pass. The foreign worker has to be employed and carry out duties in accordance with the conditions of his or her work pass. Any person who fails to comply with or contravenes Section 5(1) of the EFMA shall be guilty of an offence and shall:

There are various employment passes available for foreign workers, namely, “Work Permits”, “S Passes” and “Employment Passes”. While there is no minimum qualifying salary for Work Permit holders, the minimum qualifying salary for S Pass holders (who are not in the financial services sector) is currently S$3,000 and for Employment Pass holders (who are not in the financial services sector) it is currently S$5,000.

The number of Work Permit and S Pass holders a company can hire in Singapore is limited by a quota (or dependency ratio ceiling) and subject to limitations, including conditions for source countries or regions, age when applying and maximum period of employment. The dependency ratio ceiling for foreign workers (whether Work Permit holders or S Pass holders) hired by a company within the services sector in Singapore is currently 35% of our total workforce.

The employment of foreign workers is also subject to the payment of levies. Companies which hire close to the maximum quota are required to pay higher levies. Currently the Group pays levies between S$300 to S$800 per month for each Work Permit holder, and S$330 per month for each S Pass holder.

Employment of Foreign Workers in the Services Sector

A company that wishes to employ foreign employees from NTS countries for conservancy cleaning services would have to first submit a completed prior approval form to the Work Pass Division of the MOM, and such prior approval form has to be endorsed by the supporting town council. Once the prior approval has been issued, the cleaning company may then proceed to submit a new work permit application for each NTS foreign employee. As of March 31, 2024, we employed 286 workers from Bangladesh across 13 projects under such approval.

An employer is also required to place a $5,000 security bond for each non-Malaysian work permit holder it wishes to employ. The bond is in the form of a banker’s or insurance guarantee to support the security bond. It is used to ensure that both the employer and the foreign employee comply with the conditions of the work permit. The employer is not permitted to ask the foreign employee to pay for the bond, and the bond must be purchased before the foreign employee arrives in Singapore.

Regulations on Anti-Money Laundering and Prevention of Terrorism Financing

The primary anti-money laundering legislation in Singapore is the Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act 1992, or CDSA, provides for the confiscation of benefits derived from, and to combat, corruption, drug dealing and other serious crimes. Generally, the CDSA criminalizes the concealment or transfer of the benefits of criminal conduct as well as the knowing assistance of the concealment, transfer or retention of such benefits.

The Terrorism (Suppression of Financing) Act 2002, or TSOFA, is the primary legislation for the combating of terrorism financing. It was enacted to give effect to the International Convention for the Suppression of the Financing of Terrorism. Besides criminalizing the laundering of proceeds derived from drug dealing and other serious crimes and terrorism financing, the TSOFA also requires any person in Singapore and any citizen of Singapore outside of Singapore who has information about any transaction in respect of any property belonging to any terrorist to immediately inform the Commissioner of Police of that fact or information. If any person fails to lodge the requisite reports under the CDSA and the TSOFA, it may be subject to criminal liability.

Malaysia

Laws and Regulations in Malaysia In Relation to the Cleaning Business

MDTCL Approval for Unregulated Services

Under the Guidelines on Foreign Participation in the Distributive Trade Services (“Guidelines”), all foreign business operators engaged in the business of distribution and trade services in Malaysia are required to obtain approval from the Ministry of Domestic Trade and Cost of Living (“MDTCL”) in order to be able to apply for expatriate work permits and sometimes, to obtain or renew business premise licenses.

Under the Guidelines, “foreign participation” means any interests, associated group of interests or parties acting in concert which comprises of (i) individual who is not a Malaysia citizen; (ii) foreign company or institution; or (iii) local company whereby parties stated in (i) and (ii) herein hold more than 50 percent of the voting rights in the company.

As My All Services is currently wholly owned by Primech A & P Pte. Ltd. (a foreign company), which is ultimately owned by Mr. Kin Wai Ho, Mr. Jin Ngee Vernon Kwek and Mr. Cyrus Jun Ming Wen, who are foreigners under the Guidelines, My All Services is considered to be a company with foreign participation pursuant to the Guidelines.

Further, “distributive trade” is defined to comprise all linkage activities that channel goods and services from the supply chains to intermediaries for the purpose of resale or to the final buyers. Because My All Services supplies cleaning services as a business to the general public, it would be considered as engaging in distributive trade services under the Guidelines.

The services provided by My All Services would fall within the category of “various other distribution formats” and which is defined in the Guidelines as other type of distributive formats and unregulated sector not otherwise expressed in the Guidelines. In this regard, the MDTCL has issued a list of certain services under “unregulated” sub sectors and the following services are set out to be unregulated services under the purview of MDTCL:

Services provided by My All Services would therefore fall within the category of unregulated services and would subject My All Services to the approval and requirements imposed under the Guidelines by MDTCL. Accordingly, while the guidelines refer to “unregulated” services, such services are in fact regulated.

In addition to an approval from the MDTCL, a foreign owned entity carrying on unregulated services is recommended to comply with the Guidelines. The Guidelines do not have force of law and are merely reflective of government policy. While there are no legal sanctions or penalties for non-compliance with the Guidelines, compliance with the Guidelines is enforced administratively. For example, the Malaysian Immigration Department generally refuses to process work permit applications if the applicant company does not have the distributive trade approval.

As of the date of this Annual Report, My All Services does not have and has not applied for the MDTCL approval under the Guidelines to supply cleaning services in Malaysia. Without the MDTCL approval, My All Services may not be able to apply for or renew any work permits for any foreign employees, or apply for or renew its business premise and signage license.

As of the date of this Annual Report, My All Services has not employed any foreign employees in Malaysia and does not currently require a business premise and signage license from any local authorities under the LGA as it does not operate its cleaning service business from any business premises.

Laws and Regulations in Malaysia in relation to Workplace Safety and Health

Occupational Safety and Health Act

The Occupational Safety and Health Act 1994 (“OSHA”) and its regulations apply throughout Malaysia to certain industries specified in the First Schedule to the OSHA, including the sanitary services industry. OSHA imposes general duties upon employers and employees to ensure workplace health and safety. Along with the regulations promulgated under OSHA, OSHA requires, among others, the establishment of workplace safety and health committees (where there are more than 40 persons employed at the place of work), the introduction of a policy statement regarding occupation safety and health and sets forth strict compliance requirements in relation to workplace accident notification. Contravention of the OSHA will render a person liable to a fine up to MYR50,000 and/or imprisonment for a term up to 2 years.

Laws and Regulations in Malaysia Relating to Employment

Employment Laws

In Malaysia, the legal rules governing the employment relationship include legislation that sets minimum employment standards; that governs trade unions; that establishes and regulates a national statutory pension fund; that provides social security protections; that sets minimum wages and minimum ages for retirement; and that establishes protections for laid off employees.

Employee’s Personal Data Protection

The Personal Data Protection Act 2010 (“PDPA”) regulates the processing of personal data in Malaysia. Briefly, the PDPA imposes legal obligations on employers (as data users) who process the personal data of its employees (as data subjects). Employers, as data users, are required to comply with the personal data protection principles prescribed under the PDPA which include the requirement to, among others, obtain an employee’s consent prior to processing his/her personal data, inform the employee that his/her personal data is being processed via written notice, specify reasons for the collection of the personal data, imposes responsibility for the protection of such personal data, ensure the accuracy of the personal data and requires permission to be given to employees to access the collected personal data. Contravention of such principles will render a person liable to a fine not exceeding MYR300,000 and/or imprisonment for a term not exceeding 2 years.

C. Organizational Structure

See “—A. History and Development of the Company.”

D. Property, Plants and Equipment

See “—B. Business Overview—Facilities.”

Item 4A. UNRESOLVED STAFF COMMENTS

Not applicable.