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CONCENTRATIONS OF RISK | 12 Months Ended
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Dec. 31, 2022
Risks and Uncertainties [Abstract] |
CONCENTRATIONS OF RISK | NOTE－14 CONCENTRATIONS OF RISK The Company is exposed to the following concentrations of risk:
(a) | Major customers
For the financial year ended December 31, 2022, there was a single customer who accounted approximately for 20.6% of the Company’s revenues. For the financial year ended December 31, 2021, there was a single customer who accounted approximately for 28.8% of the Company’s revenues. For the financial year ended December 31, 2020, there was one single customer who accounted approximately for 7.7% of the Company’s revenues.
(a) | Major vendors
For the financial year ended December 31, 2022, 2021 and 2020, the vendor who accounted for 15.2%, 19.4% and Nil respectively, or more of the Company’s purchases and its outstanding payable balances as at year end date, is presented as follows: SCHEDULES OF COMPANY’S PURCHASES AND ITS OUTSTANDING PAYABLE BALANCES
|  | 2022 |  |  | 2021 |  |  | 2020 |
|  | Percentage of purchases |  |  | Accounts payable |  |  | Percentage of purchases |  |  | Accounts payable |  |  | Percentage of purchases |  |  | Accounts payable |
|  | % |  |  | $’000 |  |  | % |  |  | $’000 |  |  | % |  |  | $’000 |
Vendor A |  |  | 15.2 |  |  |  | - |  |  |  | 19.4 |  |  |  | 2,325 |  |  |  | - |  |  |  | - |
(b) | Credit risk
Financial instruments that potentially subject the Company to credit risk consist of cash equivalents, restricted cash, accounts and loans receivable. Cash equivalents are maintained with high credit quality institutions, the composition and maturities of which are regularly monitored by management. The Singapore Deposit Protection Board pays compensation up to a limit of S$75,000 (approximately US$55,465) if the bank with which an individual/a company hold its eligible deposit fails. As of December 31, 2022, bank and cash balances of approximately $1.0 million were maintained at financial institutions in Singapore, of which approximately $1.0 million was subject to credit risk. While management believes that these financial institutions are of high credit quality, it also continually monitors their credit worthiness. For accounts receivable, the Company determines, on a continuing basis, the probable losses and sets up an allowance for doubtful accounts based on the estimated realizable value. The Company has adopted a policy of only dealing with creditworthy counterparties. The Company performs ongoing credit evaluation of its counterparties’ financial condition and generally do not require a collateral. The Company also considers the probability of default upon initial recognition of asset and whether there has been a significant increase in credit risk on an ongoing basis throughout each reporting period. The Company has determined the default event on a financial asset to be when internal and/or external information indicates that the financial asset is unlikely to be received, which could include default of contractual payments due for more than 90 days, default of interest due for more than 365 days or there is significant difficulty of the counterparty. To minimize credit risk, the Company has developed and maintained its credit risk grading to categorize exposures according to their degree of risk of default. The credit rating information is supplied by publicly available financial information and the Company’s own trading records to rate its major customers and other debtors. The Company considers available reasonable and supportive forward-looking information which includes the following indicators:
| ● | Actual or expected significant adverse changes in business, financial or economic conditions that are expected to cause a significant change to the debtor’s ability to meet its obligations;
| ● | Internal credit rating; and
| ● | External credit rating and when necessary.
Regardless of the analysis above, a significant increase in credit risk is presumed if a debtor is more than 30 days past due in making contractual payment. As of December 31, 2022, there was no outstanding from a single customer whose account receivable balances of total consolidated amounts. As of December 31, 2021, there was no outstanding from a single customer whose account receivable balances of total consolidated amounts. As of December 31, 2020, there was no outstanding from a single customer whose account receivable balances of total consolidated amounts.
(c) | Interest rate risk
As the Company has no significant interest-bearing assets, the Company’s income and operating cash flows are substantially independent of changes in market interest rates. The Company’s interest-rate risk arises from bank borrowings. The Company manages interest rate risk by varying the issuance and maturity dates of variable rate debt, limiting the amount of variable rate debt, and continually monitoring the effects of market changes in interest rates. As of December 31, 2022, 2021 and 2020, the borrowings were at fixed interest rates.
(d) | Economic and political risk
The Company’s major operations are conducted in Singapore. Accordingly, the political, economic, and legal environments in Singapore, as well as the general state of Singapore’s economy may influence the Company’s business, financial condition, and results of operations.
(e) | Exchange rate risk
The Company cannot guarantee that the current exchange rate will remain steady, therefore there is a possibility that the Company could post the same amount of profit for two comparable periods and because of the fluctuating exchange rate actually post higher or lower profit depending on exchange rate of S$ converted to US$ on that date. The exchange rate could fluctuate depending on changes in political and economic environments without notice.
(f) | Liquidity risk
Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they become due. The Company’s policy is to ensure that it has sufficient cash to meet its liabilities when they become due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company’s reputation. A key risk in managing liquidity is the degree of uncertainty in the cash flow projections. If future cash flows are fairly uncertain, the liquidity risk increases.

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- Definition The entire disclosure for any concentrations existing at the date of the financial statements that make an entity vulnerable to a reasonably possible, near-term, severe impact. This disclosure informs financial statement users about the general nature of the risk associated with the concentration, and may indicate the percentage of concentration risk as of the balance sheet date. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 275 -URI https://asc.fasb.org/topic&trid=2134479 + Details
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