SCC Holdings Berhad Annual Report 2019

8 SCC Holdings Berhad | Annual Report 2019 OVERVIEW OF BUSINESS AND OPERATIONS SCC Holdings Berhad (“SCC”) and its subsidiary companies is involved in the business of distribution, sales and services of well-known industrial-grade foodservice equipment and food supplies to the F&B markets which are widely used in restaurants, cafes, quick service restaurants, food kiosks, cinemas and hypermarkets among others. We also supply animal health products to feed mills and livestock industries while our food manufacturing division produces food premixes for related industries. WORKING CAPITAL, LIQUIDITY The Group continues to maintain a healthy cash flows position in FYE2019 with near zero gearing which places it in a favourable financial position to capture any future opportunity and stayedone step aheadof the competition. DIVIDEND POLICY The Company does not have a formal dividend policy but the Management envisages a dividend payout ratio of approximately 35% of the company's profit after tax to shareholders in each financial year. Since its inception, the company has consistently payout dividend of more than 35% of the company’s profit after tax to shareholders (please refer to page 3 ) FINANCIAL PERFORMANCE REVIEW Review on Statement of Comprehensive Income During the year under review, the Group recorded total revenue of RM65.17m and profit after taxation of RM5.43m. This represent a 1.49% reduction compared with last year’s revenue and a 24.09% reduce in profit after tax. The slight decrease in revenue was due to the huge price differences of amino acid that is 17.25% lower than average prices in 2018. The big reduction of profit after tax for the year are due to some bad debts written off, additional expenses for our newly setup overseas subsidiary and the impact of adopting the new MFRS 16, that made up of majority of the increased operating expenses. Review on Statement of Financial Position Non-current assets increased by 11.02% mainly due to the adoption and implementation of the new MFRS 16 accounting standard which included the right of use assets as part of the non-current assets during the year under review. The decrease in Trade Receivables by 12.01% is primarily due to improved collection during the financial year. Inventories have increasedmainly due to higher purchases towards end of the financial year in preparation of early festival season in 2020. Group Revenue by Business Segment (‘000) SCCFM RM69 SCCFM RM209 FSED RM34,402 FSED RM33,585 AHPD RM30,702 AHPD RM32,365 2018 2019 management discussion and analysis